Posts by BenWilson
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OnPoint: Election 2011: GO!, in reply to DexterX,
Refer to Kyle's post above the CGT will get passed on and there is also the position that it could take the form of an annual tax levy and it will definitely be recovered or covered by rents.
I guess it could be done that way, if they're fucking crazy. Taxing unrealized gains would be even more ridiculous than provisional tax (where they tax you for profits you haven't even made yet).
With regard to the other comments posted that lean towards growth - my view is that the economic growth is best undertaken by supporting innovation/ideas to get established and prosper.
Innovation is OK, but it's also way too much of a buzzword for my liking. You can have good solid growth doing something quite unoriginal, like raising sheep, or putting down railways, or growing trees. Innovative is usually synonymous with "risky". I'm not so sure the government should be gambling with our money. Better would be if they provided the infrastructure for some kinds of targeted growth areas.
I like broadband for it because it just seems like something that should become a basic service, like water and power and a telephone. At least, they used to be. Now they cost fucking heaps. I'm spending something like $800 pa on water these days. It's starting to look like I'd save money just by getting a water tank. That's ridiculous, when the economies of scale that must exist in mass produced water supply are considered.
But there's plenty of others areas which would help industry grow, not to mention provide services to citizens. Unfortunately, neither of the major parties buys into the idea.
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Personally I'm just bitter that I don't count as a PAS liberal, having expressed many pages back that I don't mind the odd cup of instant. I had a nice one today on Waiheke served by a good honest boilermaker, and I actually chose condensed milk over fresh (just for old times sake). The only thing missing from the communist poster in this was in his beach-house.
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OnPoint: Election 2011: GO!, in reply to Kyle Matthews,
If there's less profit at the end then a number of people will be wanting to make more from the rent since they'll be making less at the end.
They always want to do this anyway. They don't need an excuse to put rents up. They just need people willing to pay. That won't change.
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OnPoint: Election 2011: GO!, in reply to Ross Mason,
An oxymoron if ever i saw one.
I conclude that you never saw one. Yes, building property is productive. Hell yes. Sometimes it's not that sound an investment, but hey, at least the buildings get made and, on the whole, used.
But if you want this magic thingy called "growth" the only way it is going to work along that avenue is to invets in IPOs surely.
Um, I can think of lots of alternatives. There was growth before there were stockmarkets, outrageous though that may sound. People can set up businesses, or build things for themselves. Even working for other people is good for growth, it means you have money to spend, and the other person has a business, and the customers get the services or products. The stockmarket is only a small piece of productive activity in this country.
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OnPoint: Election 2011: GO!, in reply to DexterX,
A capital gains tax is not an answer – in the same way that the ETS won’t solve global warming - A CGT won't growth the ecomomy. .
Was anyone claiming it's a silver bullet? Yes, it won't create world peace either, but it could contain runaway property speculation, that is basically the purpose of it.
I have no problem with some of your other suggestions for encouraging growth, but it's not a binary. CGT can go with those.
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OnPoint: Election 2011: GO!, in reply to DexterX,
If you want to encourage reinvestment then you provide tax relief for development – not a punitive capital gains tax which will effectively be passed on to the working poor and beneficiaries as increased rent and living costs whilst also sending the “business talent” off shore.
You'll need to fill in the gaps of your story, how exactly CGT causes a cost that needs to be passed on to people who don't even own property? Because speculators can't take such ridiculous profits when they sell, that will somehow affect rents? You understand that property owners who don't sell don't have to pay CGT? So this means you should only buy investment property if you want to be a landlord. If you want to increase rents you have to do your property up? At which point you're a property developer, engaged in productive activity?
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OnPoint: Election 2011: GO!, in reply to Jim Cathcart,
Matthew, what it might do is encourage some people to take ownership of some assets besides rental properties.
I'm still struggling to see the connection. Government sells valuable asset. This encourages people to buy shares how? What's stopping them buying shares right now? There actually are good stocks already to buy. Most of the ones on the NZX are NZ companies so they're "investing in NZ". But NZers don't, on the whole. Why? What's changing when the government flogs off those stocks we do actually already (indirectly) own?
I think investing in stocks is a great idea, personally. But, despite having an income that's well over the average, I STILL don't have enough money to do it, and know that paying off my mortgage is a way better use of any spare money I have. If some new stock hits the market, namely our energy companies, how is this any different from any other IPO that I can't afford to get in on?
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Hard News: Only what we would expect a…, in reply to Matthew Poole,
Given Treasury's well-known position on asset sales, it's a no-brainer that the sales will be recommended, and as quickly as possible.
Yes, how dare anyone else but them have any control over this country.
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Yes, I think a CGT is definitely needed. It won't be anywhere near as disastrous to property values as people think, especially if homes are excluded. The only think it discourages is speculation.
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OnPoint: Election 2011: GO!, in reply to Stephen Judd,
Interesting argument he's making. He's suggesting that it doesn't really matter whether they're publicly or privately owned, because by orienting them towards profit, the damage is already done. They no longer serve either socialist OR capitalist purposes, only corporate purposes - they serve themselves, and even suck the life out of other business, let alone consumers.
But I think that's not quite right. If they are publicly owned, they may well suck a great deal, but the profits from that go back into public funds. Essentially it's a stealthy consumption tax. When they're private, those profits go to whoever owns the assets, and you can bet your arse that's mostly not going to be NZers. That will surely suck the life out faster.
But still, the idea that the very setting up of the principle that these organisations should turn a profit (rather than cover costs and grow) is responsible for stagnation, is most interesting. It's going to keep me awake tonight, anyway.
Of course it's possible for privately owned businesses to go for 100% reinvestment of all profits. That's the model that would grow them the fastest that they could possibly grow, other than by pumping in money from some other source. But bugger all big corporate run companies do this, because shareholders demand dividends. To corporatize our assets, even if we still own them, is to take a line that their growth must by definition be suboptimal, just to pay the shareholders a living. So our Telecom, despite being a hugely profitable company has still utterly failed to deliver fibre to consumers, a technology was available way back in the early 90s. It's become way, way cheaper in the meantime, and they still won't do it. If Telecom had been state run, rather than just state owned, I can hardly imagine that they wouldn't have put in something better than the old copper wires that we've had for 30-40 years now. They'd also have probably picked the mobile network solution with the best all round compatibility with the world, not the maximum incompatibility with their competitors.
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