It is quite simple. You simply employ the politician’s oldest political tricks in the book, sleight of hand and deliberate obfuscation.
And labour are well practiced in the art of sleight of hand and obfuscation
Labour governments have a fundamental belief that the state, not the individual, is the best driver of social progress. Taxation is seen as a moral tool to redistribute wealth and correct free market malfunctions. It is this mindset that creates the insatiable appetite for revenue, driving perpetual cycles of high taxes to fund bloated public spending programs.
If in government post the 7th November election, Labour plans to introduce a Capital Gains Tax (CGT) . Their thinking seems to be that a magical trend has emerged and voters suddenly love it? If they coat it with “moral sugar” that is!
Why are we one of a small number of countries around the world who still do not have a Capital Gains Tax?
Because it is not be popular with voters and too many countries have been burnt by a CGT.
It’s as simple as that!
Chris Hipkins and Labour believe they have found a way to make the unpalatable popular. Pre-spend the phantom revenue on moral crusades!
Free scans for pregnant women, free prescriptions, cheaper public transport. Who dares argue against healthcare for the vulnerable? No one!
Their strategists have designed a brilliant, emotional trap. By wrapping an unpalatable and destructive asset tax in the flag of social justice, they force voters into making a false choice; accept their CGT, or prove you do not care about the vulnerable.
Labour and their historic tax stratagem exposes the eternal truth of Labour governments; they love tax because they crave control over your money and more tax delivers their “sugar rush!
Labour governments are hard wired to tax and spend!
In fact, you could even make a case that the Labour Playbook is titled – Tax, Spend, and Waste!
Introducing a CGT is never about economic fairness. A CGT is all about providing the fuel for the insatiable appetite that is government spending. By implementing new taxes, they are able to build a war chest to fund pet ideological projects.
We only have to look at recent history to see, very dramatically, this revenue is never rarely managed wisely; instead, it is routinely wasted on inefficient public machinery that fails to deliver. Labour taxes the future growth of the nation just to buy short-term political favour, proving they prefer redistribution over actual wealth creation.
As Finance Minister, Grant Robertson mastered the art of squandering taxpayers money! Robertson and his cabinet cohorts routinely wasted our tax monies on inefficient public machinery that, so often, failed to deliver.
Labour is so busy sugar-coating their new tax policy that they are completely blinding themselves to how it actually plays out overseas. Instead of selling the tax with clever marketing, Labour should look at global data to see the real-world damage.
Pre-spend the money on moral crusades so dissent looks cruel. That’s not equity, it’s economic suicide!
“You can’t tax your way to prosperity”
Worldwide governments have promised CGT will revitalise the economy. But history has proven it actually does the opposite!
If Labour thinks a CGT accurately targets the wealthy, they need to think again. A CGT actually freezes investment, starves startup companies and penalises everyday New Zealanders that have worked hard to improve their lot!
When a political party pitches a CGT, they promise a fairer economy and a steady stream of public funding it sounds simple, it sounds so fair.
Tax the profits of the wealthy to pay for the future of the nation!
But economic history tells a much bleaker story.
In practice, CGT rarely delivers on its promises. Instead, it unleashes a wave of, what politicians are gold medallists at, unintended consequences. Unintended consequences that damage the very economies they are meant to revive. From bureaucratic disasters to frozen investments, the real world application of a CGT reveals that its structural flaws can carry a devastating toll.
Here are three historical case studies showing why the ultimate cost of implementing a Capital Gains Tax is far higher than any government bargains for. More importantly, why Labour’s latest proposal is an economic gamble we cannot afford to take!
When Malaysia launched a comprehensive CGT in 1965, the politicians expected a revenue windfall. Instead, they got a fiscal disaster.
The Malaysian government completely miscalculated the massive amount of money, time and paperwork required to run its public property database. They assumed keeping tabs on everything taxpayers owned would be relatively easy and cheap, but the actual administrative workload ended up costing them far more than expected.
The task of tracking asset histories created unexpected administrative burdens, requiring specialized IT systems, massive numbers of data entry staff working endless hours that severely drained the national budget far beyond original expectations.
Incomplete data inputs caused massive delays in releasing official government balance sheets, which harmed international investor confidence which in turn, risked lowering the nation’s credit rating, ultimately making future government borrowing much more expensive!
Because millions of public funds were diverted by paperwork and data entry, vital public sectors like healthcare, schools, and roading suffered from reduced funding.
Realising the tax was an expensive net-drain on the economy, the government surrendered and repealed the CGT just one year later!
It stands as a stark warning: the bureaucratic cost to enforce CGT often eclipses the revenue it generates.
Also in 1965, UK Prime Minister Harold Wilson introduced a CGT to counter a boom in property and asset values that saw wealthy individuals converting their standard income into untaxed capital gains by the sale of assets having a significantly increased value.
UK’s CGT very graphically illustrated the invisible, compounding cost of the “locking in” effect that a CGT can have. When wealthy property owners refuse to sell an asset because they do not want to pay a CGT bill, their capital remains as an unproductive, stagnant asset that could have been sold and better utilised by an innovative startup fund.
By penalising the natural flow of capital, the UK’s CGT created an economically stagnant environment where the nation pays the price via lost vitality.
UK’s CGT has turned out to be an act of economic self-sabotage. Instead of generating steady tax income, the high tax rates have incentivised business owners and high-net-worth investors to move their companies and capital to more tax-friendly jurisdictions.
This is especially in the IT and Tech sector where hundreds of tech and AI leaders have already warned that the UK is actively forfeiting its status as a premier global tech hub.
Keir Starmer didn’t help his or his governments popularity when raising Capital Gains Tax rates in 2024. Critics accused Starmer of using CGT as a backdoor revenue raiser after ruling out other tax hikes during the election.
Decades of flawed CGT tinkering have disrupted market stability, driven talent offshore and slowed economic momentum by penalising the long-term investments that are required for long term prosperity!
Chris Hipkins and his band of fiscal bandits are so engrossed in gift-wrapping a New Zealand CGT that they’ve completely ignored the disaster across the Tasman.
Because, as Australians found out, their CGT experiment went absolutely swimmingly, right?
Introduced Bob Hawkes Labour government in 1985, Australia’s CGT was part of a sweeping suite of economic reforms driven by Treasurer Paul Keating, aimed at modernising the Australian economy. To dampen public angst, assets owned prior to the 1985 date were “grand parented” though it intentionally exempted many.
Just like so many other countries, Australia found that relying on a CGT carries a devastating hidden cost. In this case, severe budget volatility.
During the early 2000’s asset boom, surging CGT revenue duped politicians into thinking they had discovered a tax mother lode! Politicians mistakenly treated this windfall as a permanent guarantee of wealth. Believing the boom would last forever, they used these CGT funds to lock in long-term, ongoing government spending commitments.
When the asset boom inevitably slowed down, the tax revenue evaporated, leaving the state with a permanent budget deficit and unsustainable spending commitments.
Even worse, because the system allowed investors to claim massive capital losses, the tax net-drained the national treasury, precisely during a recession. The ultimate cost was borne by the taxpayer, as the government was forced into large deficits and austerity mode.
It is proof that a CGT is an unreliable, high-risk gamble for public funding!
New Zealand Labour’s proposed CGT is an economic suicide pill wrapped in the language of compassion. It is not a path to equity, it is simply an ideological cash-grab designed to fund an insatiable government bureaucracy!
Implementing a CGT will choke the country’s small businesses, freeze productive investments, and penalise everyday Kiwis who worked hard to build a future.
We cannot afford to buy into the emotional manipulation that justifies this fiscal gamble. For the survival of New Zealand’s economic recovery and financial freedom, this toxic tax grab must be decisively rejected!
If in government post the 7th November election, Labour plans to introduce a Capital Gains Tax (CGT) . Their thinking seems to be that a magical trend has emerged and voters suddenly love it? If they coat it with “moral sugar” that is!
Why are we one of a small number of countries around the world who still do not have a Capital Gains Tax?
Because it is not be popular with voters and too many countries have been burnt by a CGT.
It’s as simple as that!
Chris Hipkins and Labour believe they have found a way to make the unpalatable popular. Pre-spend the phantom revenue on moral crusades!
Free scans for pregnant women, free prescriptions, cheaper public transport. Who dares argue against healthcare for the vulnerable? No one!
Their strategists have designed a brilliant, emotional trap. By wrapping an unpalatable and destructive asset tax in the flag of social justice, they force voters into making a false choice; accept their CGT, or prove you do not care about the vulnerable.
Labour and their historic tax stratagem exposes the eternal truth of Labour governments; they love tax because they crave control over your money and more tax delivers their “sugar rush!
Labour governments are hard wired to tax and spend!
In fact, you could even make a case that the Labour Playbook is titled – Tax, Spend, and Waste!
Introducing a CGT is never about economic fairness. A CGT is all about providing the fuel for the insatiable appetite that is government spending. By implementing new taxes, they are able to build a war chest to fund pet ideological projects.
We only have to look at recent history to see, very dramatically, this revenue is never rarely managed wisely; instead, it is routinely wasted on inefficient public machinery that fails to deliver. Labour taxes the future growth of the nation just to buy short-term political favour, proving they prefer redistribution over actual wealth creation.
As Finance Minister, Grant Robertson mastered the art of squandering taxpayers money! Robertson and his cabinet cohorts routinely wasted our tax monies on inefficient public machinery that, so often, failed to deliver.
Labour is so busy sugar-coating their new tax policy that they are completely blinding themselves to how it actually plays out overseas. Instead of selling the tax with clever marketing, Labour should look at global data to see the real-world damage.
Pre-spend the money on moral crusades so dissent looks cruel. That’s not equity, it’s economic suicide!
“You can’t tax your way to prosperity”
Worldwide governments have promised CGT will revitalise the economy. But history has proven it actually does the opposite!
If Labour thinks a CGT accurately targets the wealthy, they need to think again. A CGT actually freezes investment, starves startup companies and penalises everyday New Zealanders that have worked hard to improve their lot!
When a political party pitches a CGT, they promise a fairer economy and a steady stream of public funding it sounds simple, it sounds so fair.
Tax the profits of the wealthy to pay for the future of the nation!
But economic history tells a much bleaker story.
In practice, CGT rarely delivers on its promises. Instead, it unleashes a wave of, what politicians are gold medallists at, unintended consequences. Unintended consequences that damage the very economies they are meant to revive. From bureaucratic disasters to frozen investments, the real world application of a CGT reveals that its structural flaws can carry a devastating toll.
Here are three historical case studies showing why the ultimate cost of implementing a Capital Gains Tax is far higher than any government bargains for. More importantly, why Labour’s latest proposal is an economic gamble we cannot afford to take!
When Malaysia launched a comprehensive CGT in 1965, the politicians expected a revenue windfall. Instead, they got a fiscal disaster.
The Malaysian government completely miscalculated the massive amount of money, time and paperwork required to run its public property database. They assumed keeping tabs on everything taxpayers owned would be relatively easy and cheap, but the actual administrative workload ended up costing them far more than expected.
The task of tracking asset histories created unexpected administrative burdens, requiring specialized IT systems, massive numbers of data entry staff working endless hours that severely drained the national budget far beyond original expectations.
Incomplete data inputs caused massive delays in releasing official government balance sheets, which harmed international investor confidence which in turn, risked lowering the nation’s credit rating, ultimately making future government borrowing much more expensive!
Because millions of public funds were diverted by paperwork and data entry, vital public sectors like healthcare, schools, and roading suffered from reduced funding.
Realising the tax was an expensive net-drain on the economy, the government surrendered and repealed the CGT just one year later!
It stands as a stark warning: the bureaucratic cost to enforce CGT often eclipses the revenue it generates.
Also in 1965, UK Prime Minister Harold Wilson introduced a CGT to counter a boom in property and asset values that saw wealthy individuals converting their standard income into untaxed capital gains by the sale of assets having a significantly increased value.
UK’s CGT very graphically illustrated the invisible, compounding cost of the “locking in” effect that a CGT can have. When wealthy property owners refuse to sell an asset because they do not want to pay a CGT bill, their capital remains as an unproductive, stagnant asset that could have been sold and better utilised by an innovative startup fund.
By penalising the natural flow of capital, the UK’s CGT created an economically stagnant environment where the nation pays the price via lost vitality.
UK’s CGT has turned out to be an act of economic self-sabotage. Instead of generating steady tax income, the high tax rates have incentivised business owners and high-net-worth investors to move their companies and capital to more tax-friendly jurisdictions.
This is especially in the IT and Tech sector where hundreds of tech and AI leaders have already warned that the UK is actively forfeiting its status as a premier global tech hub.
Keir Starmer didn’t help his or his governments popularity when raising Capital Gains Tax rates in 2024. Critics accused Starmer of using CGT as a backdoor revenue raiser after ruling out other tax hikes during the election.
Decades of flawed CGT tinkering have disrupted market stability, driven talent offshore and slowed economic momentum by penalising the long-term investments that are required for long term prosperity!
Chris Hipkins and his band of fiscal bandits are so engrossed in gift-wrapping a New Zealand CGT that they’ve completely ignored the disaster across the Tasman.
Because, as Australians found out, their CGT experiment went absolutely swimmingly, right?
Introduced Bob Hawkes Labour government in 1985, Australia’s CGT was part of a sweeping suite of economic reforms driven by Treasurer Paul Keating, aimed at modernising the Australian economy. To dampen public angst, assets owned prior to the 1985 date were “grand parented” though it intentionally exempted many.
Just like so many other countries, Australia found that relying on a CGT carries a devastating hidden cost. In this case, severe budget volatility.
During the early 2000’s asset boom, surging CGT revenue duped politicians into thinking they had discovered a tax mother lode! Politicians mistakenly treated this windfall as a permanent guarantee of wealth. Believing the boom would last forever, they used these CGT funds to lock in long-term, ongoing government spending commitments.
When the asset boom inevitably slowed down, the tax revenue evaporated, leaving the state with a permanent budget deficit and unsustainable spending commitments.
Even worse, because the system allowed investors to claim massive capital losses, the tax net-drained the national treasury, precisely during a recession. The ultimate cost was borne by the taxpayer, as the government was forced into large deficits and austerity mode.
It is proof that a CGT is an unreliable, high-risk gamble for public funding!
New Zealand Labour’s proposed CGT is an economic suicide pill wrapped in the language of compassion. It is not a path to equity, it is simply an ideological cash-grab designed to fund an insatiable government bureaucracy!
Implementing a CGT will choke the country’s small businesses, freeze productive investments, and penalise everyday Kiwis who worked hard to build a future.
We cannot afford to buy into the emotional manipulation that justifies this fiscal gamble. For the survival of New Zealand’s economic recovery and financial freedom, this toxic tax grab must be decisively rejected!
“To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle.” Winston Churchill
Pee Kay writes he is from a generation where common sense, standards, integrity and honesty are fundamental attributes. This article was first published HERE
No comments:
Post a Comment
Thank you for joining the discussion. Breaking Views welcomes respectful contributions that enrich the debate. Please ensure your comments are not defamatory, derogatory or disruptive. We appreciate your cooperation.