Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Lack of tax on capital gains fuels growing inequality

7 December 2011

Lack of tax on capital gains fuels growing inequality

Closing the single largest remaining tax loophole by introducing a capital gains tax (excluding the family home) would help close the growing gap between rich and poor, the Green Party said today.

A recent OECD report entitled Divided We Stand: Why Inequality Keeps Rising highlights how inequality grew particularly fast in New Zealand from the mid-1980s to late 2000s.

“Bill English has failed to close the single largest remaining loophole in our income tax system. A comprehensive tax on capital gains (excluding the family home) is hugely progressive and would help close the growing gap between rich and poor,” said Green Party Co-leader Dr Russel Norman.

“Treasury advice to Bill English in 2009 made it clear to him that capital assets are owned disproportionately by higher income families. The advice said not taxing this income is regressive. That’s Treasury’s way of saying that a capital gains tax is incredibly fair.

“Both John Key and Bill English have consistently defended the tax loophole, however, preferring to ignore growing inequality in our society.”

The OECD report found that capital income in New Zealand for those in the top quintile grew 9.4 percent over this period yet declined 3.9 percent for those in the lowest quintile — the second-largest widening of the capital income gap in the OECD.

“The largest proportion of capital gains is earned by those at the upper end of the income spectrum. This income currently remains untaxed,” said Dr Norman.

“This tax loop-hole for those that can afford to own multiple properties needs to be closed.

“By refusing to implement a tax on capital gains, the National Government is not protecting the interests of wage and salary earners.

“A capital gains tax is a fair, progressive tax — one that treats every dollar earned the same.”

Link to OECD’s report Divided We Stand: Why Inequality Keeps Rising: http://www.oecd.org/document/51/0,3746,en_2649_33933_49147827_1_1_1_1,00.html

Link to the Treasury & Inland Revenue’s background paper on capital gains tax: http://www.victoria.acnz/sacl/cagtr/twg/Publications/3-taxation-of-capital-gains-ird_treasury.pdf

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

The Gili Islands: A Community Earthquake Recovery Effort

Joseph Cederwall travelled to the Gili Islands in October 2018 to talk to locals about their experiences of the event and witness the impact and the rebuild efforts on this unique ecotourism destination.

2018 was a difficult year for the Indonesian archipelago. This chain of fragile and largely low-lying islands is situated on a particularly unstable segment of the Pacific rim of fire. Last year the islands were hit by a series of devastating natural events including a series of Lombok, Sulawesi and Java based earthquakes and resultant tsunamis.More>>

 
 

DHBs "Prepared": Junior Doctors Strike Tuesday, Wednesday

The needs of acute patients will be met during tomorrow's junior doctor strike, a DHB spokesperson says... Almost 3000 junior doctors are expected to walk off the job, which will affect all DHBs apart from West Coast District Health Board. More>>

ALSO:

Gordon Campbell: On MBIE’s Social Media Scam

Given the ambit of MBIE’s work, almost any form of social activity could qualify as being part of MBIE’s brief, so the privacy threats posed by this training programme are extensive. The current oversight safeguards seem threadbare to non-existent. More>>

ALSO:

JusTrade: New Campaign For A 21th Century Trade Agenda

‘Critique is no longer enough. If anything is to really change, we need to step away from the existing framework and take a first-principles approach to rethinking what will work for the 21st century.’ More>>

Earlier:

Gordon Campbell: Thompson + Clark Are The Tip Of The Iceberg

How can we tell where and how any lines are being drawn? Oversight is not exactly robust. If it were, Thompson + Clark would have been out of contention for state security work ten years ago. More>>

Trainers: Taratahi Institute of Agriculture In Interim Liquidation

Taratahi employ 250 staff and this year has provided education to over 2500 students. Taratahi owns and manages 8 farms throughout the country. More>>

ALSO:

IPCA Report: Complaints About Deputy Commissioner Wallace Haumaha

The Authority has found that DC Haumaha acted improperly by approaching staff and others to provide information to support him to refute the allegations about his 2016 conduct, or solicited other staff to do so on his behalf... More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels