Labour need a Wealth Tax and Capital Gains Tax
Another excellent and insightful piece form NZ Herald’s new Political Editor, Thomas Coughlan on the war inside Labour over the Capital Gains Tax vs the Wealth Tax debate…
Inside the battle for Labour’s wealth tax and how it was lost – this time
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- Labour continues to debate which tax policy it will run on at the election in 2026.
- Labour’s policy council is investigating a capital gains or wealth tax.
- Longtime wealth tax supporter David Parker will deliver his valedictory speech on Wednesday.
…this pathetic debate inside Labour over whether we should adopt a Capital Gains Tax vs a Wealth Tax is the reason Labour might lose the 2026 election.
It’s as timid as their GST off Fruit and Vegetables incrementalism that plagued them last election.
The real slap in the face to the voters Labour was relying on with their bullshit limp GST off Fruit and Vegetables fiasco is that it was such a meaningless gesture, it articulated that Labour just didn’t understand the pain felt at the bottom.
This time around the exact same dynamics will come into play with their limp Capital Gains Tax ‘victory’.
The naked fucking reality you clowns is that we need BOTH Taxes, not just one or tother, BOTH!
AND MORE!
The task at hand comrades is to reset the tax yoke from the poorest and reset it on the richest.
- We need properly funded public health.
- Properly funded public education.
- Properly funded public housing.
- Properly funded infrastructure.
- Properly funded mental health services.
- We need free public transport.
- We need free dental.
- We need to nationalise Early Childhood Education and make it all free.
- We need to nationalise retirement villages and build more public housing for the elderly.
- We need to fund a 3rd state backed Supermarket to break the duopoly.
- We need properly and fully funded addiction programmes.
- We need Marae Civil Defence funding.
- We need a whole new First Responder Mental Health Teams fully funded service.
There is an enormous amount of money required to actually solve the problems we face and that requires a bold new vision for tax.
We need:
- A Capital Gains tax that doesn’t include the family home.
- A Wealth Tax at the top 1%
- A sugar tax to help fund free dental
- A super tax on Vice profits from smoking, alcohol and gambling.
- $100million ring fenced for addiction services from a legal cannabis market.
- 5% Estate Duties
- First $10000 tax free
- Lower GST from 15% to 10%
- Remove GST altogether from basket of essentials (tampons, toilet paper, fresh fruit and vegetables, tooth paste)
- Financial Transaction Tax
- Pollution Tax
- Land Tax
If the Left actually want to rebuild the current public services and fund genuine solutions by growing the society positively, it is going to need more money.
We must lift the tax yoke off the poorest and put it on the richest!
Bring GST down, subsidise cost and make the wealthiest pay.
Arguing over which tepid tax to gingerly embrace is not a solution and will lead to more Labour Party incrementalism.
The other thing the Labour Party strategists are not seeing is that a strong egalitarian tax policy will bring those middle class Labour Party Auckland voters that Labour haemorrhaged to the Greens back.
For a Party that keeps saying it wants to win Labour they don’t seem to understand why they lost
Labour fucked Auckland over the lockdown, and then added insult to injury by not recognising any of that pain with a build back that justified the sacrifice.
Labour lost working class voters because GST off fruit and vegetables and the petrol prices going back up were a slap in the face and they lost the middle classes who looked at their joke economic platform and intellectually gave their vote to the Greens for their wealth tax.
If Labour had a strong tax policy that gave to the poor while taking from the rich, they would gain back the middle class voters who moved to the Greens WHILE winning back the working classes who didn’t bother too vote.
For a Party that keeps saying it wants to win Auckland back, they don’t seem to know where Auckland is.
A strong Labour Party Tax policy would win back middle class Auckland voters, give working class South Auckland voters a reason to vote and it would take the Greens down a peg or two to a manageable 9% because doesn’t that Party List start getting flakey pretty quick?
Labour needs more revenue to pay for the social infrastructure they champion, simply rearranging the bureaucratic structures as Jacinda did isn’t enough.
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You may have a plan there but it has a fatal flaw. Ask yourself; is Labour capable of implementing any plan? If you do I have tan Auckland tramway to sell you and will throw in a cycle bridge across the harbour for free.
Labour would spend at least two years gaining expert opinion (consultants and the PMC are ready for the workload and cash) for Labour to throw it out the window and do nothing meaningful. Think Health reforms).
Simply not going to happen under Labour (not that national will do anything either).
I agree they are so gutless.
Totally agree with Bomber’s points here, but…if David Parker, and even Ross Robertson! could not persuade the neo liberal hard heads at the top of NZ Labour to change tack, there is not much chance of blogger pundits and commenters doing so.
Hipkins needs to go, a new leader installed who makes a grovelling apology for Rogernomics and introduces TDB policies as above…dream on etc.
Labour Party members can theoretically change policy but LECs are run by head office loyalists and aging members who operate on what NZ Labour used to be–and lets be frank it was never an anti capitalist party, but a reformist class collaborationist one. In the tradition of lesser evil Parliamentary parties Labour has delivered some good things over the years and were a better option than the tories.
2026 Election is there for the taking by Greens, TPM and Labour–but only if the latter can somehow get its shit together for once.
What about dropping our tax system altogether and adopting Australia’a?
There are plenty of other ways govts can get revenue beside tax.
The interesting Future Made In
Australia plan is to not overly tax business (because that gets Labour govts rolled) but use govt power to harness business self interest to sell it Green Tech (17:18) https://youtu.be/-UeOYmSzv2s
NZ govt with Trumps support 😉 could also have a similar green tech strategy to provide world leading low cost green electrification. NZ already has a leading nuclear fusion development company.
Govt investment spending to supersupply people and business with low cost energy and profit from decarbonisation. Lower energy cost is highly correlated with GDP growth.
This seems like a programme for taxation at about 40% of GDP. Under Labour it is typically about 33% of GDP, and under National more like 30% of GDP.
A pretty radical programme with a much bigger state, and a much smaller private sector. Basically a big enough state to fund all things the Greens want. Is Middle NZ going to vote for that?
Very true Frank .Labour’s policy of tax and spend is great until the well drys up as people see their money spent on unproductive public servants
Meanwhile due to Nationals policies, people are leaving the country in droves. Unemployment is out of control and murders are a daily event.
People need to realize that governments doin’t spend ‘their’ money; governments create and spend their own money. Taxation comes later after the money that the government has created and spent has genderated income that can be taxed.
When you get into the mechanics of a fiat currency monetary system you learn that taxation does not pay for government spending. To repeat that – taxation does not pay for government spending.
Government spending creates new money via the reserve bank. RBNZ administrators enter the values of the governments budget into government departments accounts – using a computer keyboard – so that agreed government spending commitments can be met.
That makes sense when you think it through – no government has ever waited for the previous years total tax receipts before deciding the scope of it’s upcoming budget.
This new money is spent into the private sector as the government acquires resources and labor from the economy to provision itself and provide public services and administration.
Only after the new money is circulating in the economy can it be taxed and saved in the private sector or with the government as bonds.
Taxation is used to control inflation by removing money that is circulating from labor and business income to reduce the spending capacity in the private sector.
Taxing wealth – which is typically in the form of savings or assets which are already money that has been removed from the economy – may not have the inflation control impact that is needed.
MMT economists make the claim that the size of government debt is not important – provided there are under utilized resources and labor available in the economy. As Keynes said – “if we can do it (i.e. if there is capacity in the economy) then we can afford it.”
The historic economy data for most advanced economies shows that governments run operational deficits and high levels of bond issuance as a matter of course. It is perfectly normal and economically healthy for governments to be a significant contributor to the money supply through deficit spending.
Economists who argue against this typically find it very difficult to name a country that has successfully run government surplus for an extended period of time. (The exceptions happen concurrent with very large export growth).
MMT argues that the focus on taxation as the solution to redistribution may be the wrong one – given the true purpose and nature of taxation.
The argument for government deficit spending and debt needs to be made and won from an economic perspective and taxation and bonds understood as inflation fighting tools. Not sources of funding.
‘No country has ever taxed its way to prosperity.’
The country is still prosperous and always has been.
The problem is the distribution of the wealth created by that prosperity.
For example: people are homeless and others own holiday homes they live in a few weeks of the year.
Taxation creates equity whereby a society has wealthy people but ALL have adequate healthcare, housing, food and clothing.
Because I am so old I remember growing up in such a society so I know it is possible. I also know that many wealthy people accepted it because they knew of its benefits.
I will never be an apologist for the late Bob Jones but even he said,’
“I was brought up in a state house – and I am very grateful for that’.
RESTORE STATE SOCIALISM IN AOTEAROA! DEATH TO CAPITALISM!
Much sense here, especially a CGT and the first 10k tax-free. But a differential GST will become complex and messy; best not.
And an estate tax will lose all those NZers who want to help their children and grandchildren; this would kill off the whole programme otherwise. Steer clear of that, if you wish the other desiderata to come to pass. Don’t underestimate the strength of family ties.
In other words, an estate tax might be the kiss of death
$10k is not enough. It’s $20k in Aus. NZ needs to be bolder at $25k or $30k.
Put the top tax rate up while at the same time making the easy sell of a Universal Tax Cut For All. Everyone gets the same tax cut!
GST will not become complex and messy.
The only businesses that would not charge gst on food would be Supermarkets and Dairies. Having a line of code to zero rate or charge gst is already standard in the accounting software used in NZ. Having a line of code in point of sale software to zero rate food and not cleaning products or hardware isn’t rocket science.
It’s universal and will be liked and voted for by the wealthy too.
Most bloggers on this site have had little to do with financial management so would not understand your argument for not touching GST in it current form
Something we can agree on, both you and Bob the troll are financially illiterate.
Good stuff but
We should have a financial transactions tax that is say 0.1% of all that dosh coming in and out overnight as we are the 9th most traded currency in the world, we’ll drop but it will bring in plenty. We with the other two taxes could then scrap GST, you know GST which has the greatest effect on the poorest because they spend everything they earn.
I think you are wrong about
A Capital Gains tax that doesn’t include the family home.
I want that capped say $4-5 million family home.
Agree with all your proposals but there’s no way a Hipkins-controlled labour Party will do any of it. AFAICS, Labour’s “strategy” is to do nothing, keep as low a profile as possible and wait for the Nactzi coalition to fall apart. Then its BAU with Hipkins back in his old office on the 9th floor of the Beehive: building bureaucratic empires in Wellington Central filled with (Greens-voting) PSA members.
NZ’s Golden Weather had government’s pouring money into assets and ip. State housing, electric schemes, hospital and university building, science R&D.
The late Robert Jones always said Labour not being afraid to spend are good for business and the economy.
If a Capital Gains tax is too difficult to administer just make it a tax on wealth (income + assets).