The independent Tax Review released today raises some radical ideas, many of which the public will not be ready to accept, Alliance MP and Revenue Under-Secretary John Wright said today.

"The main proposal would introduce a tax on theoretical income from owning a house on the basis that the equity in the house could alternatively be invested in government bonds.

"The Alliance will reject that suggestion, because we believe home ownership is good, and we do not want to encourage home owners to make a home in government bonds.

"The fundamental issue in the tax system is that the Government needs enough revenue to pay for the social services and infrastructure New Zealanders need, such as schools, hospitals, roads and police.

"That revenue has to be raised in the fairest possible way. Or to put it another way, taxation is like plucking a live goose – the object is to extract the maximum number of feathers for the least amount of hissing.

"The fairest tax system is based on the ability to pay, which requires the wealthy to pay a greater share -- especially when many low income earners are struggling to get by.

"I'm encouraged that the review accepted in principle that a financial transactions tax is workable, although it didn't examine the Alliance's FTT proposal.

"The Alliance will continue to develop more work on this area, along with eco-taxes, which were identified as valuable in certain circumstances.

"I'm amazed that the effects of taxation on e-commerce were not considered in the review, when that is a vital and growing new area of the economy," John Wright said.

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