Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Higher taxes for super rich gets voter tic

“Higher taxes for super rich gets voter tic”

“Taxes, taxes, taxes, and all the rest is b******t.” That was the message that went viral at the Davos Economic Forum last month, and it’s the message our Government needs to hear if it wants to tackle inequality in New Zealand.

The “Taxes, taxes, taxes” challenge came from Rutger Bregman, a Dutch historian, who told the rich and famous at Davos that amid all the talk of justice and equality, no one was raising the real problem, which was the rich not paying their fare share.

Bregman’s views have been widely applauded, and they offer a lesson for New Zealand as the Government considers the soon-to-be released Tax Working Group Report. It’s clear there’s going to be a lot of noise from all sides about the merits of taxation on capital gains. But what we really need is a debate on the much larger question of what is the most appropriate level of taxation for New Zealand.

Government spending in New Zealand is currently limited to 30 percent of GDP, most of which comes from taxation. Somehow we have both a Government and an opposition wedded to this figure as if it were the holy grail of running a modern economy. It’s not, and sticking to such an arbitrary cap is a mistake. It is among the lowest level of government spending in the OECD, with governments in most developed countries spending over 40% percent of GDP.

Our low level of government spending is why New Zealanders are dying of cancer while they’re on hospital waiting lists, it is why we spend too little on mental health. It means well-off parents pay additional ‘voluntary’ school levies while schools in poorer areas cannot even begin to get that sort of assistance from their community. It is why we have disgracefully high levels of child poverty.

Taxation is the cost we pay for living in a fair and functioning modern society, and we need to start the tax debate with a dose of realism, by looking not just at capital gains tax, but at overall levels of taxation and spending.

There are two arguments we will hear opposing higher levels of tax. The first is that increasing tax levels will limit economic progress. In fact, one of the periods of strongest growth was in the post-war period when tax rates were much higher than at present. The post-war boom in the USA saw tax rates as high as 90 percent on the wealthy. But we are not advocating those tax levels. We must pay more, and somewhere over 40 percent is absolutely affordable.

The second argument will be that the private sector and individuals can make better decisions on spending than the government can. While that may be true in some parts of the economy, when it comes to things like health, education and social safety nets, a strong public sector is the only way to run a fair society.

We must broaden the discussion, and talk about paying more tax. Our tax system certainly needs to include a tax on capital gains, and higher taxes for the wealthy and those in high-paying jobs. But it will also mean less inequality and fairer access to health, education and social supports. We need to focus on the benefits rather than the costs and stop pretending we can have a fair society with current low levels of taxation.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Commerce Commission: Retail Fuel "Not As Competitive As It Could Be"

The Commission has outlined some options it considers could improve competition. There are two broad sets of options it thinks may have the potential to help create a competitive wholesale market. These are:

• Greater contractual freedom to make it easier for resellers to switch between suppliers; and
• Enabling wider participation in the majors’ joint infrastructure, notably the shared terminals and supporting logistics involved in their borrow-and-loan system.
Further options, including improving the transparency of premium petrol prices, are discussed in the draft report. More>>


Promises: Independent Election Policy Costing Unit A Step Closer

The creation of an entity to provide political parties with independent and non-partisan policy costings is a step closer today, according to Finance Minister Grant Robertson and Associate Finance Minister James Shaw. More>>


School's In: Primary And Intermediate Principals Accept New Offer

Primary and intermediate school principals have voted to accept a new settlement from the Ministry of Education, which includes entrenched pay parity with secondary principals. More>>


IPCA On 'Rawshark' Investigation: Multiple Police Failings In Hager Searches Confirmed

The Independent Police Conduct Authority has found that the Police's unlawful search of Nicky Hager's property in October 2014 resulted from an unwitting neglect of duty and did not amount to misconduct by any individual officer... More>>


Broadcasting Standards: Decisions On Coverage Of Mosque Attacks

The Authority upheld one of these complaints, finding that the use of extensive excerpts from the alleged attacker’s livestream video on Sky News New Zealand had the potential to cause significant distress to audiences in New Zealand, and particularly to the family and friends of victims, and the wider Muslim community. More>>

PM's Post-Cab: Bad Mail

Cabinet was updated on the process around prisoners sending mail, following the accused Christchurch gunman sending letters that "should have been stopped". All mail of "high concern prisoners" will now be checked by a specialist team and a changes to the legal criteria for witholding mail are expecting to go to a cabinet committee in this parliamentary session. More>>

Welfare: Ongoing Drug-Test Sanctions Contradicts Govt’s Rhetoric

Reports that two-thirds of beneficiaries who fail drug tests are still having their benefit sanctioned contradicts the Government’s so-called health approach to drugs. More>>


Welfare: More Measures To Help Those Facing Homelessness

Ministers have announced $54 million in Government funding for initiatives which will support at-risk individuals and whānau to stay in their existing tenancies. The funding will also provide additional wrap around services. More>>


Corrections: New Strategy On Māori Reoffending And imprisonment

Authentic co-design with Māori, incorporating a Te Ao Māori worldview, and greater connectedness with whānau are key elements of Hōkai Rangi, Corrections’ new departmental strategy designed to address the long-term challenge of Māori reoffending and imprisonment. More>>





InfoPages News Channels