John MacDonald: I know you hate taxes. But have you got any better ideas?

It might happen. It might not.

What I’m talking about, is the way some people seem to think they have to jump to the defence of the super rich whenever anyone mentions the idea of a wealth tax.

Which one of our country’s wealthiest people is actually advocating for today. This is Bruce Plested, who was a co-founder of the Mainfreight transport business and who’s done very well out of it.

And, while he’s not claiming to be speaking on behalf of all the mega-wealthy people in New Zealand, he is saying today that he would have no problem paying more tax.

Mainfreight is currently valued at about $7.3 billion on the New Zealand Stock Exchange. Bruce Plested still has a 14 percent stake in the company. So he’s done alright.

At the same time, Labour leader Chris Hipkins is saying that the party is thinking about including a capital gains tax in its tax policy - which could include taxing the increased value in people's houses, even when they're not being sold.

Which I think is nuts. I’ve got no problem with the idea of a wealth tax - I think that would be much fairer.

The reason why I’m against capital gains taxes, is that capital gain is, generally, the only way ahead for most of us - financially.

Maybe the gains we’re going to get out of property, for example, won’t quite be on the scale they have been in recent years. But why should we be taxed on that? Let alone the capital gain we get on properties we aren’t even selling.

Even talking about that possibility, Chris Hipkins is holding up a sign saying “don’t vote for us”. Because, what I’ve learned over the years, is even people on the left will avoid paying taxes if they can.

What’s more - as we see with the likes of council rates - just because your house increases in value, it doesn’t mean you can afford to pay more rates.

Just like with this idea Labour’s got. Just because your house increases in value, it doesn’t mean you could afford to pay capital gains tax. And then what would happen if, down the track, the market went backwards and you lost some or all of the capital gain you’d previously been taxed on? Tax refund anyone? I don’t think so.

So I think it’s very easy to pull holes in Labour’s potential capital gains tax idea.

A wealth tax, though, is a different story. Because, anyone wealthy enough to be on the list of targets for a wealth tax, wouldn’t be impacted as much as the rest of us if we were pinged with a capital gains tax.

But those who jump to the defence of the super rich whenever anyone mentions wealth taxes won’t agree with me. They’ll say what the Revenue Minister is saying, that a wealth tax would drive the super rich out of the country.

Someone who does agree with me, though, is Max Rashbrooke - who is an expert in inequality.

He says the facts of the matter are, that when a super wealthy person threatens to pull their money out if a wealth tax is brought in, it’s generally what he describes as “a hollow threat”.

He’s a researcher at Victoria University, in Wellington, and he says New Zealand lets wealthy people off very lightly when it comes to paying tax.

Unlike me, though, he’s in favour of a capital gains tax as well as a wealth tax. Where I’m just in favour of a wealth tax.

He says: "Capital gains tax is just so standard virtually everywhere else in the developed world. It's just part of the furniture. It's totally normal. It is bizarre that we don't have one."

On the wealth tax, Max Rashbrooke says what he would do is he’d have a wealth tax and put the money into a Kiwisaver scheme for kids which, he says, would genuinely build wealth for everyone. Not just for a select few - as he puts it.

I wouldn’t go for that. I’d put the money from a wealth tax into all the things the government pretty much can’t afford to do right now, because it’s not bringing enough money in the door from taxes.

This cos

Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from Newstalk ZB.

Speaker 2 (00:13):
It might happen today, might happen today, might not, but
I reckon it will happen. What I'm talking about is
the way some people seem to think they have to
jump to the defense of the super rich whenever anybody
mentions the idea of a wealth tax, wealth tax, which

(00:34):
one of our country's wealthiest people is actually advocating for today.
And this is Bruce Plested, who was a co founder
of the main freight transport business and who's done very
well out of it, so well that he's a billionaire.
He's a billionaire, and while he's not claiming to be
speaking on behalf of all the megawealthy people in New Zealand,
he's saying today that he would have no problem paying

(00:56):
more tax. Main Freight, by the way trucks Everywhere currently
valued at about seven point three billion dollars on the
New Zealand Stock Exchange and blue Bruce Plesstad still has
a fourteen percent stake in the company. So I think
in non accountant terms we can say that he's loaded,

(01:17):
absolutely loaded, and he's happy to pay more tax. At
the same time, Labour leader Chris Hipkins are saying that
the party's thinking about including a capital gains tax and
it's tax policy which could include what about this taxing
the increased value in people's houses even if they're not

(01:40):
selling them, which I think is nuts. I've got no
problem with the idea of a wealth tax. I think
that would be much fairer and more on that surely,
But a capital gains tax, well, for starters, it would
probably be one way for labor to guarantee not getting
back into government. The other reason why I'm against capital

(02:02):
gains taxes, That's not one reason why I'm against it.
The reason I'm against capital gains taxes is that capital
gain is generally the only way ahead for most of
us financially, isn't it. It's the only way head. Maybe
the gains we're going to get out of property, for example,
they won't be quite the same or on the same
scale they have been in recent years, But why should

(02:23):
we be taxed on that, let alone the capital gain
we get on properties we aren't even selling. Even talking
about that possibility, even talking about it. What Chris Sipkins
is doing is holding up sign saying don't vote for us,
because what I've learned over the years as even people
on the left will avoid paying taxes as they can.

(02:47):
It's a fact. What's more, as you know, you see
with the likes of council rates, just because your house
increases in value, it doesn't mean you can afford to
pay more rates, just like this idea Labour's got, just
because your house increases in value doesn't mean you could
afford to pay a capital gains tax. And then what
would happen if, say, down the track, the market went

(03:07):
backwards and you lost some or all of that capital
gain that you'd previously been taxed on refund Anybody can't
imagine it. So I think it's very easy. I've shown
already very easy to pull holes in Labour's potential capital
gains tax idea. A wealth tax though different story, because

(03:29):
anyone wealthy enough to be on the list of targets
for a wealth tax, they would not be impacted as
much as in fact, they'll change it anywhere near as
much as the rest of us would be pinned with
a capital gains tax. For those people I mentioned earlier,
you know who jumped to the defense of the super rich.
Whenever anybody mentions wealth taxes, they won't agree with me.

(03:51):
You might be one of them, They'll say, you might
say what the current revenue minister is saying that a
wealth tax would drive the super rich out of the country. Nonsense.
Someone who does agree with me, though, was Max Rashbrook,
who is an expert in inequality. In reading what he's
been saying today, he says the facts of the matter

(04:11):
are that when a super wealthy person threatens to pull
their money up if a wealth tax is brought in,
it's generally what he describes as quote a hollow threat.
He's a researcher at Victoria University in Wellington, and he
says New Zealand lets wealthy people off very lightly when
it comes to paying tax. Unlike me, though, he's in
favor of a capital gains tax as well as a

(04:35):
wealth tax. We're I'm just in favor of a wealth tax. Nevertheless,
Max Rashbrook says, quote capital gains tax is just so
standard virtually everywhere else in the developed world. It's just
part of the furniture. It's totally normal. He says, it's
bizarre that we don't have one. And on the wealth tax,
Max Rashbrook says what he would do is he'd have

(04:55):
a wealth tax and put the money into a Kiva
service came for kids, which he says would genuinely build
wealth for everybody, not just for a select few. As
he puts it, I wouldn't go for that. What I'd
do with the wealth tax money is I would put
it into all the things the government and governments pretty
much can't afford to do because they don't bring in

(05:16):
enough money from taxes. This cost cutting that we're seeing
now in the public sector, that's just politics. We're not
going to suddenly be able to afford more infrastructure, We're
not going to suddenly be able to afford more hospitals
or more of anything the taxpayer pays for. The reason
for that is that there just isn't enough money coming

(05:37):
in the door, and it's only going to get worse
as the population ages. So something has to be done.
More taxes needed, I'm convinced, and as far as I'm concerned,
the answer is to tax the super wealthy more through
a wealth tax instead of hurting us all with the

(05:58):
capital gains tax.

Speaker 1 (06:00):
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