"It was based on the advice that we received. We looked at a wealth tax. It was very clear that a wealth tax actually contained huge economic risk for New Zealand. Wealth is ultimately very mobile. If a whole lot of the people who would have been subject to the wealth tax can remove that wealth from New Zealand, actually, our economy would have been in far worse shape. I looked at the evidence, I got the advice and I made the call that a wealth tax wasn't going to be the right way forward for New Zealand."
Is that statement true? Not according to my sources. Former Revenue Minister Parker presented the IRD High Wealth Individuals Research Project to my Law & Economics class at Auckland University the day the report was released.
In response to a student question, David stated that the introduction of a wealth or capital tax in NZ would not lead to a shift of wealth out of this country. He said the reason was that if you looked at how much Kiwis would be subject to similar such taxes abroad, then it would be very similar to what he was proposing.
Hang on. Doesn't that mean that the PM's own Revenue Minister had received advice and given advice to Chris Hipkins that directly contradicts what Hipkins says? David could not have been clearer on this precise point. So I do not believe the PM ever "received advice" and "looked at evidence" showing his Minister's proposed new tax would lead to a wealth exodus. My belief is based on what his own Revenue Minister told me and 97 students at the University on 27 April. By the way, I'm not in favor of these kinds of new taxes, but the truth about the nature of the debate the country has been having about them needs to be told.
Sources:
https://www.rnz.co.nz/news/election-2023/496319/hipkins-national-prescription-fees-going-to-tax-cuts-for-millionaires
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
In response to a student question, David stated that the introduction of a wealth or capital tax in NZ would not lead to a shift of wealth out of this country. He said the reason was that if you looked at how much Kiwis would be subject to similar such taxes abroad, then it would be very similar to what he was proposing.
Hang on. Doesn't that mean that the PM's own Revenue Minister had received advice and given advice to Chris Hipkins that directly contradicts what Hipkins says? David could not have been clearer on this precise point. So I do not believe the PM ever "received advice" and "looked at evidence" showing his Minister's proposed new tax would lead to a wealth exodus. My belief is based on what his own Revenue Minister told me and 97 students at the University on 27 April. By the way, I'm not in favor of these kinds of new taxes, but the truth about the nature of the debate the country has been having about them needs to be told.
Sources:
https://www.rnz.co.nz/news/election-2023/496319/hipkins-national-prescription-fees-going-to-tax-cuts-for-millionaires
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
1 comment:
It’s a pity none of your students challenged Parker on his defense of the Wealth Tax. If Kiwi‘s shift their tax residence to Australia, they are not taxed on income and capital gains earned outside of Australia. This is where most of the wealthy migrants are likely to relocate as there are few hoops to jump and they can still spend five months of the year in New Zealand if they desire.
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