GUEST BLOG: Pat O’Dea – Hooray an FTT?
Hooray an FTT
(Are we outraged yet?)
Finally, a Financial Transaction Tax, FTT, (of sorts) is being introduced by this government.
Unlike GST, FTT is a progressive tax, it targets wealthier New Zealanders unearned income.
GST is a regressive tax, it targets those on lower incomes which mostly go out straight away, on food, rent, power, transport and other living expenses, all which attract GST.
Wealthier New Zealanders with bigger incomes spend proportionately less of their incomes on living expenses, the rest is banked and reinvested, none of the returns on these investment transactions is taxed. The wealthy pay proportionately less GST than the rest of us.
Those interested in social justice have argued for a long time that the unearned earnings of the wealthy should be taxed through a Financial Transactions Tax. Lower income people who make fewer and smaller financial transactions would pay far less of an FTT than wealthier New Zealanders.
A progressive FTT could replace the regressive GST.
Because of the huge amount of financial transactions made every day in this country, it has been estimated that an FTT of around 1% on every dollar transaction could cover the government revenue from GST, allowing this regressive tax to be abolished, which would be a big relief to those on low incomes facing a cost of living crisis, representing a massive 15% tax cut.
An FTT is much fairer than GST. Lower income people who make fewer and smaller financial transactions would pay proportionally less than than the wealthy who make many, larger, transactions.
The Labour Government has always said imposing a financial transaction tax could not be done.
But it seems that this is not true. For the first time the government is about to impose a Financial Transaction Tax.
No matter what they call it this is an FTT.
But in a total perversion of the original FTT concept, the Labour Government wants to impose a version of an FTT that targets New Zealanders’ Kiwis Saver transactions, while still leaving the unearned investment transactions of the wealthy alone.
Pat O’Dea is a trade unionist and human rights activist.
Come at me
Are you a doy late with this?
“the Labour Government wants to impose a version of an FTT that targets New Zealanders’ Kiwis Saver transactions,”
No. It actually targeted the fees charged by kiwisaver fund managers These are charges for the SERVICES provided by them, and should attract goods and SERVICES taxation.