Capital Gains Tax bare minimum to start reducing wealth gap
The Tax Working Group recommendations, which include a revenue-neutral Capital Gains Tax, are the absolute bare minimum changes the Government should introduce if it is serious about starting to reduce the gap between the rich and poor. Auckland Action Against Poverty is calling on the Government to introduce the recommendations and be bold about future measures that aim to narrow New Zealand's growing wealth divide.
"A Capital Gains Tax is a start, but it won't do anything to help our public housing crisis, or deeply underfunded health and education infrastructure", says Ricardo Menendez March, Auckland Action Against Poverty Coordinator.
“Research by Oxfam has shown that 2 New Zealanders own more wealth than the poorest 30%. It will take much bolder measures to unravel this extreme inequality. Tax reform on income tax, speculative transactions, and wealth are some of the additional options the Working Tax Group could have considered to better distribute wealth in our society.
The Capital Gains Tax will start addressing the commodification of housing, putting a leash on the aggressive nature of speculative housing market. But ordinary people will still be locked out of having access to permanent, healthy homes.
"We regret the narrow scope provided for the Tax Working Group. Tax reform that aims to create a more equitable society, such as increasing tax rates for top income earners, reducing rates for bottom income earners and lowering GST, needed to be included. The current tax system is regressive and disproportionately affects low-income communities”
"We are calling on the Government to introduce a comprehensive Capital Gains Tax following the recommendations, but we must address all the other core issues driving the housing crisis. If we are to end the record levels of homelessness and growing number of people waiting for a state home, the Government will have to start spending more than it is planning to in order to provide housing for all.”