COMMENT: Jack Tame
Do you value fairness?
I think – and maybe I'm wrong – that most of us do. Most of us, if we were to play God for the day and design a society from scratch, would want to design a society where people enjoyed pretty similar opportunities. Where people were treated evenly.
That might be idealistic, but think about it for a moment. Come on . . . play the game!
Imagine you get to design the perfect world. You get to play God, you get to make all sorts of choices about how to build cities, how to educate people, how to punish people for committing crimes. The only catch in the game, is that afterwards, you get dropped randomly somewhere in the middle. You finish designing your own little world, you close your eyes, you count to 10, and there you are. You could be born as literally anyone.
What would you do, if you were playing the God game?
Be honest . . . would you make your little society as fair for all its little inhabitants as possible? Or would you allow for some things that perhaps unsettled that fairness. Would you take a punt, a gamble, on where you might be born. You could be lucky, end up at a great school with loving parents and good health and every opportunity imaginable. But, if you weren't quite as lucky, who knows how bad your life might be?
Sod that. It's not really worth the risk, right? If I was designing my perfect little world, I'd want to design a world where everyone had a bit of opportunity. I'd want there to be incentives for people to make our world a better place. I'd want people who provide good jobs, who create great things, who work especially or outstandingly hard, to have the opportunity to make a lot of money. I wouldn't resent them a moment for being wealthy.
But I wouldn't give them free money, at the expense of everyone else.
Because in some ways, that's what this is. You can think about it as a proposed capital gains tax. Or you can think about the current system as a massive subsidy that we've been giving to a portion of our population, that has helped to make some people disproportionately rich.
At the moment, someone working 50 hours a week at a meatworks, or as a nurse in an oncology ward, or as a graphic designer at a fancy ad agency; someone working as a checkout assistant at a supermarket; anyone earning a regular wage and getting paid every couple of weeks working for the man . . . that person pays tax.
If they squirrel away and save some money, chuck a few grand in a savings account, bad news: the profits on that get taxed as well.
So why, why if we value fairness, do we have an economy where every form of income is taxed tax, except one? Where, if someone buys a property, rents it out for a decade to cover the mortgage, then sells it for $400,000 more than they bought it for . . . that person gets to keep every single cent of that profit, while you working down the street and slogging away in a job, lose as much as 33 cents on the dollar.
I'm also not suggesting that if you're smart, you take a financial risk, invest in property, or develop a business, and then one day flick it on, you shouldn't be able to make a good profit. Hell yeah, you should make a profit! You should be rewarded.
But when everyone else is paying tax on their income, the checkout operator, the meatworker, the graphic designer, surely for the sake of fairness, you should also pay a bit, too.
I don't support all of the working group's suggestions.
For what it's worth, I think it's unfair to ignore gains through inflation, and it's hard to argue against the fairness of National's policy in indexing our income tax brackets to inflation as well. I also think a capital gains tax should include the family home, should include art, and should include foreign shares.
But I challenge you . . . be bigger than yourself. I know this will rile.
Play that little fairness game. Remove your personal bias, take yourself out of the equation, and design a system from scratch. I did. And keep in mind, I work hard. I don't sleep much. I work six days a week. I have sacrificed a lot in my life to get ahead. And I earn a lot of money.
Most accountants would agree, a capital gains tax is absolutely not in my personal interest.
But I do think it's fair.