Hard News: A Capital Idea?
246 Responses
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Matthew Poole, in reply to
They’ll be back
Yes, but hopefully without some of the most toxic of today's baggage, including the associations with Act. Joyce, English, Williamson, they'll all be gone before National is next in power. Key's already made it abundantly clear that he's not prepared to be Leader of the Opposition. They're the ones most likely to support ignoring any ComCom recommendation to deny purchase approval of 2degrees - a decision that would have to be made over the top of public opposition, too, given the process that is followed by ComCom in assessing such a proposal.
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nice in theory, impossible in practice on a global scale.
You’ve heard of Mondragon?
Five times larger than Telecom NZ. Operating in businesses from supermarkets to white goods. Run on a one person/one vote basis, with an average ratio of maximum to minimum wages of 5:1.
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Matthew Poole, in reply to
That's not syndicalism, though, at which my comment was squarely aimed. Mondragon is still capitalist. It has to be, in order to trade in a capitalist world. That it's not a "traditional" ownership structure doesn't mean it's not capitalist. They sell goods outside their structure, they must be getting inputs from outside their structure, and those activities take place in the "real" capitalist world.
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Robert Urquhart, in reply to
If more likely the market goes down then we subsidise every landlord 15% on their captial losses through a tax rebate. Which would suck.
1. Only if they sell. And if we get the property market freeing up because a whole lot of landlords are selling at lower-than-current pries, that's a win.
2. You're assuming that there will be a "rebate" if you make a loss on selling a property. I don't believe that's a given - certainly haven't seen it mentioned anywhere myself.
You may mean an "effective rebate" rather than the government actually handing over money or a tax credit? In practicality that would be no different to selling at a loss in the current situation.
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Craig Ranapia, in reply to
I suspect things are boding well for the policy when discussion (not just here, but one of DPF’s key points) tends towards “why aren’t we ALSO including the family home?”
To be nit-picky, Gareth, we don’t have any policy yet – and I wouldn’t presume the current Labour front bench won’t forget Helen’s favourite maxim: "Under promise and overdeliver". I don't think David Cunliffe's wee head-rush yesterday where he exclaimed Tuesday would change the future of this country or some crap like that was entirely wise.
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DexterX, in reply to
Sub par housing is what people want - There is a real lack of wanting quality - people want cheap crap - that is the primary driver.
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Matthew Poole, in reply to
Sub par housing is what people want – There is a real lack of wanting quality – people want cheap crap – that is the primary driver.
In part because there's not much experience of what quality housing is like. People don't know any better, so they accept cheap. If there was a widespread understanding of how much nicer it is to live in quality housing, the demand for crap would be significantly reduced.
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Islander, in reply to
And people who have the happy experience of family/friends' quality housing emphatically DONT "want sub-par housing". Or "cheap crap."
BUT - it may be all they can afford...
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BenWilson, in reply to
If there was a widespread understanding of how much nicer it is to live in quality housing, the demand for crap would be significantly reduced.
Not so sure about that. I think Kiwis are weirdly stingy. I can't explain it, really.
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Matthew Poole, in reply to
it may be all they can afford…
True, especially when crap actually gets approved for construction. Overseas, because standards are high, crap just doesn't get built in any significant quantity. Here, we have the choice between crap, or high quality with a significant premium - priced like a choice between Lada or Rolls Royce. The choices ought to be quality or high quality, with pricing more like a choice between Toyota or Lexus.
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BenWilson, in reply to
The choices ought to be quality or high quality, with pricing more like a choice between Toyota or Lexus.
Which is no choice at all, you realize?
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Fooman, in reply to
I can’t explain it, really.
Parsimonious culture inherited from certain British peoples (and their demagogues) who viewed frugality as a virtue.
FM
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DexterX, in reply to
I disagree "NZers are weirdly stingy" and gravitate to chosing the lesser rather than the optimal or correct solution.
This approach underlay the deregulation to the building industry and the problems it created.
It doesn't even come down to being able to afford quality - people you can afford quality don't want to pay for it.
If anyone watched the leaky home documentary one of the recurring themes was the use of a cheap fix approach over a permanent solution - cheap being the strategic smearing of silicon (which I call pooh) everywhere as opposed to the installation of the correct flashing.
Silicon, which breaks down in sunlight, and is meant to be used as a binding agent to between two surfaces of flashing which are to be bound together with rivets – is often just smeared over the top of an unsealed flashing lap that may become the source of a leak.
You might have a job that you have a range of quotes that go from $9,500 with all flashing joints bound and sealed correctly to say $8,500 which will be done with the laps just put in place. The first job will likely last 17 to 25 years and the other job will last for 3 to 7 years.
The person doing the lesser job will be really busy.
The weird stingy thang comes from people being cognitive misers and not wanting to have to think through in any detail the critical element of any decision they are looking to make.
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Matthew Poole, in reply to
Which is no choice at all, you realize?
Maybe not in manufacturer, but in term of price and luxury there's definitely a choice. I did pick those marques for a reason.
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My experience of Lexii is that they aren’t all they’re cracked up to be, even if you don’t care about them being ugly and boring. Paint that scratches with a harsh glance. You want a BMW, get a BMW. Or a Volkswagen.
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BenWilson, in reply to
Maybe not in manufacturer, but in term of price and luxury there's definitely a choice. I did pick those marques for a reason.
If you say so. I've got a Lexus 400, and my mate has a Toyota Celsior. Apart from the badge, it's the same car. Well OK, mine's better, because I scored it for half the price he did.
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BenWilson, in reply to
I disagree "NZers are weirdly stingy" and gravitate to chosing the lesser rather than the optimal or correct solution.
I'm not sure you are disagreeing, although "cognitive misers" is inspired.
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Kumara Republic, in reply to
Here, we have the choice between crap, or high quality with a significant premium - priced like a choice between Lada or Rolls Royce. The choices ought to be quality or high quality, with pricing more like a choice between Toyota or Lexus.
Sounds about right. Ian Cassels of the Wellington Company - who builds rather than speculates - has had some ideas on the table, which he calls the 'Model-T' design.
Shoeboxes most certainly fit the Lada variety, old school council flats maybe BLMC, and decent apartments tend towards the BMW 3 or Lexus IS model. Surely there's such a thing as Mazda or Model-T apartments?
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Matthew Poole, in reply to
A couple of points about Australia’s CGT (from Wikipedia, rather than experience) – CPI indexing was abandoned after 5 years – presumably the extra complexity wasn’t worth it
Just finished listening to this Nine to Noon slot, and a PwC tax partner says that Aus gives a 50% discount on the sale value and then taxes the remainder at the seller's marginal rate. That's their solution to the inflation issue.
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3news reported that the CGT will apply to shares, farms, and businesses as well. And had John Key (who coincidentally has a very large share portfolio) complaining about this as interfering with "productive investment".
Bullshit. This is all about speculation. Even our farmers are basically farming capital gains. And its time these speculators paid their fair share.
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Islander, in reply to
+1 +2 +3 etcetera
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giovanni tiso, in reply to
Not so sure about that. I think Kiwis are weirdly stingy. I can’t explain it, really.
New Zealanders are poorer than the citizens of half of the other countries in the OECD. Could that be it?
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DexterX, in reply to
I was disagreeing with Islander and agreeing with you - lack of punctuation.
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A few quick points:
- CGT regimes usually tax capital gains, but don't allow deductions for capital losses. Yes, that's asymmetrical, but it's a standard asymmetry in the design of CGTs.
- Day traders, and people who buy several houses each year and flick them on quickly, are both engaged in businesses with the intention of making a profit. Their income is already taxable under the standard income rules in New Zealand's tax legislation.
- A CGT should be comprehensive and not apply to just certain activities. So any assets held for long term gain (houses, farms, shares) should be caught in the CGT net. So in terms of designing the law, you would subject *everything* to a CGT, then carve out some exemptions, such as an exemption for the family home. Arguably, family homes are held with the intention of providing accommodation, not with the intention of making a profit, and collectables are held for the joy of collecting etc. However, your mileage may vary on that one.
In principle, I agree with a CGT, provided that it is comprehensive. There are some serious design issues, and it could take a fair amount of IRD resources to implement and administer a CGT. It would be interesting to see a cost / benefit analysis on that.
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I'm no tax expert but has there been any discussion on an asset tax? A very low tax on all assets of say 0.08% or even less per annum. If you own a million dollars in assets such as property, farm, business, shares, cash, boat, car or painting you would pay $800 tax. Not enough to make it worth avoiding but enough to focus people on making their wealth work.
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