The problem is what is the incentive to keep working once you've earned a house and bach? Why bother save for retirement if your savings are to be taken from you at a significant percentage per year? A few percent is a huge penalty (see index funds versus mutual funds), and the wealth tax is on top of taxation of salary and dividends.
assets over $1m - a threshold the party thought would hit the wealthiest 6 per cent of New Zealanders. The higher [$2m] threshold means only the wealthiest 0.7 per cent of households will be targeted. The $2m threshold is a net figure, meaning people with mortgages and other debts would need $2m of equity before they began paying the tax.
And incentive is to borrow money on property which is whacko, and then next thing CGT will also be added.
Houses should be for living in, not financial instruments.
The incentive is it’s still a fuckton more money. You’re not taxed at 100% and in turn you live in a country with better services. The amount of money wasted by the rich is hilarious when combined with this take.
1 in 10 businesses survive. Why bother starting one if you don't get your 10x return? If you've got one, why bother trying to be a serial entrepreneur if it's all gonna be taxed? Do you think New Zealand should leave the entrepreneurship to the USA and we can just buy what we need from US multinationals?
> The incentive is it’s still a fuckton more money.
It just isn't. The people I know earning way more than I don't have anything significantly better. Mostly a nice house and a nice car and if they're lucky a bach.
Marginal incentives matter. Over 50% of my personal income goes on taxes including GST.
My life is similar to most any professional worker. I have never owned a new car. I know solo-mums that didn't work for over a decade with more equity in their home than me. My biggest expense is tax, my second biggest is my mortgage.
> The amount of money wasted by the rich
Just the rich eh? Everybody else is so much more careful! Watch out with your stereotypes - I'm guessing you don't like them applied to yourself?
You're repeating bullshit - The majority of spending in New Zealand is not by the wealthy but by the rest of the majority of kiwis[1].
If people earning less than $100k waste 5% of their income, and people earning more than $300k waste 50% of their income, then the people earning less than $100k are wasting more.
We're not in the USA with Jeff Bezos, so your point just makes no sense.
The majority of earners I know blow more than single digit percentages on unnecessary crap and luxury. For example my working class friends that spend more than 10% per week on booze and drugs - plenty of people spending more than $150 with a weekly income <$1500.
Look around you and there are obviously not a lot of superyacht stores. Plenty of booze shops doing a roaring trade and it isn't the $300k+ earners in them.
The wealthy people I know invest. If those investments are bringing foreign income into New Zealand, we already tax that and all New Zealanders win!
The government needs to get rid of the bad property investment incentives - those are where the wealthy are fucking over the non-wealthy. We have enough land and resources in New Zealand for everyone to have their own home.
Don't discourage people from investing in things that make New Zealand better off. Our taxation system discourages founding internationally competitive businesses, and it discourages owning more than $50k in overseas shares. And the majority of New Zealanders don't give a shit because the majority don't begin such businesses and they are ignorant about where their income to buy imports ultimately comes from.
Negative incentives matter, probably more than positive incentives. We all want to slowly tax the well off until they leave or until they are no longer well off.
[1] Data based on: https://www.ird.govt.nz/about-us/tax-statistics/revenue-refu...
That sounds like a terrible thing the government is doing to you.
> No, not the government.
That sounds like a terrible thing the opposition might do to you.
> No, not the opposition.
OK… did you at least accurately describe what was happening originally?
> Well, there’s these asterisks. But I am oppressed.
no: - I'm using the numbers in the quote in my comment, and from the link I gave you.
Taxation rules create incentives and disincentives. If you earn a salary you are usually ignorant of those incentives because you don't experience them. From what I see the attitude is "fuck everyone who is better off than me".
Our rules need to encourage people to make NZ better off. Not have the incentive to stop once you have gotten a $20m home: https://www.trademe.co.nz/a/property/residential/lifestyle-p...
Anyone that owns businesses worth $20m is already taxed on income. Giving a big middle finger to people that build businesses is silly.
Disclosure: I am not anywhere near the big salary or wealth numbers we've mentioned.
No wait, that wasn't the argument here, your argument is that they wouldn't want to accumulate even more wealth.
> Not have the incentive to stop once you have gotten a $20m home
Minor point, that's not a home, that's two homes in the same listing. I'd argue that accumulating property wealth beyond a house seems like it ought to be disincentivized at least a little bit, but evidently you're under the impression that either poor people don't deserve the opportunity or that land is in infinite supply.