Also, if you are going to rush through last-minute legislation, with no oversight, by slipping it into an omnibus bill, together with tax write-offs for cow diseases, you might as well have some fun.
How? Now, I don’t want to be too definitive, but all you need is a crisis and some aspirational new ideas for taxes.
The next crisis is obviously the rental crisis.
And the answer is obviously a Window Tax.
Yes, a Window Tax. Where you tax the number of windows a house has. The more windows, the more tax you pay. Yes, I know; it was tried in England and Wales in 1696. But taxes are like fashion; they always come back into style.
But how will a window tax help? To be honest, I have no idea. But Adam Smith, the father of modern economics, said a window tax would lower rents, and that is good enough for me. Plus, it would be fun to see thousands of bureaucrats wandering the suburbs counting windows.
I know what you are thinking. Tax avoiders will just get creative, just like they did in the 1700s when they bricked up their windows. Fewer windows meant less tax, as well as a few unintended health problems. Who knew light and ventilation are important?
The answer is obviously another tax – a Brick Tax. Alone, window taxes and brick taxes are useless. But something special happens when you bring bricks and windows together.
Now, it is important not to repeat the mistakes from the past. So here are some top tips for IRD. Don’t just tax the number of bricks as people will just use big bricks. The key is to create an itemized tax schedule for bricks of all dimensions. Or you can regulate so there is only one size brick in New Zealand. Either way works fine.
For those who are sceptical about new taxes solving the problem, we can always try out a new tax and see if it works. New taxes are often temporary and easy to reverse. The window tax in England and Wales was a temporary tax, and it only lasted 150 years.
Steen Videbeck is a Research Fellow with the New Zealand Initiative HERE.