James Shaw: Capital gains tax key to fixing wealth gap

by RNZ / 15 February, 2019
james shaw

James Shaw said untaxed capital gains was a fundamental reason for the wealth gap in New Zealand. Photo: VNP / Phil Smith

The week before a major tax report is released, Green Party co-leader James Shaw has again challenged his government partners to back a capital gains tax.

The Tax Working Group is due to present its final report to Cabinet ministers on Monday.

Earlier this week, Mr Shaw urged MPs to consider whether the government deserved to be re-elected if it didn't introduce a tax on capital gains.

He told Morning Report today it would be up to voters to decide whether government parties had kept their promises.

"We were elected on a platform of change - really significant change. And all three parties of government campaigned on a platform in particular of cleaning up our rivers and ending child poverty in this country and so on.

"You cannot do that without significant change to the tax system."

The tax system was a cause of the growing wealth gap in New Zealand, he said.

Read more:  Youth mental health is in crisis and NZ is failing to keep up

"Under the current system someone who earns the median wage, about $45,000 a year, over 10 years earns about $450,000 pays about $70,000 in tax.

"Someone who managed to buy a house 10 years ago can sell that for $450,000 - as much as that other person has earned in 10 years and pay no tax on that.

"Fundamentally that is why we have a wealth gap in New Zealand."

"We were elected to address that wealth gap and that involves fundamental reform of the tax system.

"The question is, should we be re-elected if we don't introduce the reforms we have promised. Ultimately that's up to the voters to decide."

When the Tax Working Group group released its interim report, there was no straight capital gains tax or set rate in it. It presented two other options for taxing capital; taxing gain from the sale of assets at roughly the marginal income tax rate and taxing a portion of the value of certain assets, for example rental properties, annually.

Mr Shaw also outlined a case for dropping the government's strict spending and borrowing rules after the next election.

The Greens would not pull out of the so-called Budget Responsibility Rules before 2020 but it was possible they would not campaign on them again, he said.

"Given that we now have the lowest government cost of borrowing in at least a generation, there is an argument that can be made that says given that we have this infrastructure deficit and given that we need a whole new generation of infrastructure ... that now would be a good time to be borrowing to invest in that future."

This article was first published on Radio NZ.

MostReadArticlesCollectionWidget - Most Read - Used in articles
AdvertModule - Advert - M-Rec / Halfpage

Latest

Tech Week: Time to celebrate Aotearoa’s own overlooked moonshot
106359 2019-05-25 00:00:00Z Tech

Tech Week: Time to celebrate Aotearoa’s own overlo…

by Peter Griffin

“We bow down to this idea of Elon Musk or Jeff Bezos going to Mars, when here in our own country, we had the equivalent."

Read more
Kiwi composer John Rimmer: An instrumental figure
106331 2019-05-24 11:09:35Z Music

Kiwi composer John Rimmer: An instrumental figure

by Elizabeth Kerr

Contemporaries and students are paying tribute to composer John Rimmer and his musical legacy.

Read more
Why Caroline Easther is thanking her Lucky stars
106325 2019-05-24 10:39:21Z Music

Why Caroline Easther is thanking her Lucky stars

by James Belfield

Well-known drummer Caroline Easther has stepped out front with a debut solo album.

Read more
Comedian buys Destiny Church's new political party's domain names
106322 2019-05-24 00:00:00Z Politics

Comedian buys Destiny Church's new political party…

by RNZ

Comedian Tim Batt buys up domains for new Brian Tamaki-backed political party.

Read more
Simon Bridges is hobbled in hate-speech debate
106336 2019-05-24 00:00:00Z Politics

Simon Bridges is hobbled in hate-speech debate

by Graham Adams

The National Party is leaving the heavy lifting of defending free expression to Act MP David Seymour.

Read more
When did a damn fine cup of coffee get so complicated?
106251 2019-05-24 00:00:00Z Food

When did a damn fine cup of coffee get so complica…

by Jean Teng

Long-time latte sipper Jean Teng embarks on a journey through the world of soft brews.

Read more
Win a double pass to a special preview of Sometimes Always Never
106301 2019-05-24 00:00:00Z Win

Win a double pass to a special preview of Sometime…

by The Listener

Billy Nighy plays Alan, a stylish tailor with moves as sharp as his suits, who has spent years searching tirelessly for his missing son.

Read more
What we must learn from the Israel Folau controversy
106275 2019-05-23 09:31:01Z Social issues

What we must learn from the Israel Folau controver…

by The Listener

Israel Folau has done us the unintended favour of showing how hard and counterproductive it would be to try to outlaw all comments that ...

Read more