Amid the current MSM hoopla about TOP, momentarily muted as the press pack rushes off to dig up dirt on Paul Henry and Stuart Nash, there is one key TOP policy winning voter attention that is seldom mentioned.
What’s driving TOP in the polls has nothing to do with them being ‘centrists’, offering a ‘measured alternative’ to Labour or National and claiming to be willing to work with either of them, it is simply that TOP are offering free money, and who can resist that?
Do the sums. If you’re a renter you pick up a Universal Basic Income (UBI) of $19,400 tax free per annum, no questions asked. If you’re a homeowner who will be paying TOP’s land tax, the answer is more complicated but still positive.
The average house in NZ sits on land worth $510,000, so the tax per house will be around $9,000 every year. Offsetting that is the free UBI, so even if you’re a single person homeowner, you’re still $10,400 per year better off. As a married couple that increases to $29,800. What’s not to like?
Nothing, until the moment you pass 65. At which point the UBI is subsumed into the pension: not as an addition, but as a substitute for $19,400 of that pension. But you’re still expected to find that land tax payment on your family home.
AI analysis it gave me the following information. About 750,000 Kiwi pensioners are owner-occupiers – some as singles, others as couples. Around 450,000 of these have only their pension, or pension plus a few dollars from other sources, as their sole income to live on.
Recognising on the one hand that the UBI part of the pension will be tax free, but on the other the bottom tax rate increases to 28 per cent, when you crunch the numbers, it shows:
Single homeowner pensioners will have to find $8,084 per year in extra taxes.
Married couples will, between them, have to find $5,694 per year in extra taxes.
How any pension-dependent pensioner will be able to make these payments is not addressed by TOP. ‘Just look at the free money, don’t focus on the details’ seems to be their mantra.
But hang on you say, can’t these pensioners simply let the land tax build up as a deferred charge against the house when sold or bequeathed to their children? And the answer is yes, but again at what cost?
Firstly, TOP doesn’t specify if this deferral will attract interest but since when has the opportunity to charge more tax ever been denied by a politician? So let’s assume that five per cent interest will be levied.
Secondly NZ life expectancy statistics show that at the age of 65, the average Kiwi will live for approximately 21 more years.
Thirdly, even conservative estimates of land value increases suggest the the average accumulated land tax charge against the house by the time today’s 65 year old reaches their use-by date in 2047 will be $460,000.
To summarise: We have a political party committed to further impoverishing that half of the homeowning pensioner population who rely primarily on their pensions as their sole income.
Alternatively, they will, when you die, interpose themselves between you and your heirs to siphon off $460,000 in deferred taxes: a death tax on the asset value that parents have worked all their lives to accumulate in their family home.
This annual wealth transfer, from the elderly to the under-65s UBI recipients, amounts to more than $2 billion per year now, rising to as much as $5 billion by 2047.
But if you are under 65, should you care? And the answer is maybe not – unless you have pensioner parents, a great many of whom are likely to be hastened to their graves by the stress and worry of dealing with this draconian new tax regime.
In any case why does the government need to get involved in this wealth transfer at all? Over the next 20 years, the Baby Boomer generation, wherein this accumulated wealth lies today, will find the Grim Reaper’s scythe winnowing their ranks, passing this wealth, frictionlessly and in its entirety, to Gen X and the Millennials. Unless of course TOP gets its hands on the money first.
Ronald Reagan’s famous warning – “The nine most terrifying words in the English language are: I’m from the government, and I’m here to help” – will, under TOP, be only partially true.
The new quote will read “I’m from the government, and I’m here to help myself and spend your inheritance better than you can.”
TOP are not centrists. A cursory analysis reveals their socialist colours as they sing that siren song. It’s never worked before, maybe next time it will.
The average house in NZ sits on land worth $510,000, so the tax per house will be around $9,000 every year. Offsetting that is the free UBI, so even if you’re a single person homeowner, you’re still $10,400 per year better off. As a married couple that increases to $29,800. What’s not to like?
Nothing, until the moment you pass 65. At which point the UBI is subsumed into the pension: not as an addition, but as a substitute for $19,400 of that pension. But you’re still expected to find that land tax payment on your family home.
AI analysis it gave me the following information. About 750,000 Kiwi pensioners are owner-occupiers – some as singles, others as couples. Around 450,000 of these have only their pension, or pension plus a few dollars from other sources, as their sole income to live on.
Recognising on the one hand that the UBI part of the pension will be tax free, but on the other the bottom tax rate increases to 28 per cent, when you crunch the numbers, it shows:
Single homeowner pensioners will have to find $8,084 per year in extra taxes.
Married couples will, between them, have to find $5,694 per year in extra taxes.
How any pension-dependent pensioner will be able to make these payments is not addressed by TOP. ‘Just look at the free money, don’t focus on the details’ seems to be their mantra.
But hang on you say, can’t these pensioners simply let the land tax build up as a deferred charge against the house when sold or bequeathed to their children? And the answer is yes, but again at what cost?
Firstly, TOP doesn’t specify if this deferral will attract interest but since when has the opportunity to charge more tax ever been denied by a politician? So let’s assume that five per cent interest will be levied.
Secondly NZ life expectancy statistics show that at the age of 65, the average Kiwi will live for approximately 21 more years.
Thirdly, even conservative estimates of land value increases suggest the the average accumulated land tax charge against the house by the time today’s 65 year old reaches their use-by date in 2047 will be $460,000.
To summarise: We have a political party committed to further impoverishing that half of the homeowning pensioner population who rely primarily on their pensions as their sole income.
Alternatively, they will, when you die, interpose themselves between you and your heirs to siphon off $460,000 in deferred taxes: a death tax on the asset value that parents have worked all their lives to accumulate in their family home.
This annual wealth transfer, from the elderly to the under-65s UBI recipients, amounts to more than $2 billion per year now, rising to as much as $5 billion by 2047.
But if you are under 65, should you care? And the answer is maybe not – unless you have pensioner parents, a great many of whom are likely to be hastened to their graves by the stress and worry of dealing with this draconian new tax regime.
In any case why does the government need to get involved in this wealth transfer at all? Over the next 20 years, the Baby Boomer generation, wherein this accumulated wealth lies today, will find the Grim Reaper’s scythe winnowing their ranks, passing this wealth, frictionlessly and in its entirety, to Gen X and the Millennials. Unless of course TOP gets its hands on the money first.
Ronald Reagan’s famous warning – “The nine most terrifying words in the English language are: I’m from the government, and I’m here to help” – will, under TOP, be only partially true.
The new quote will read “I’m from the government, and I’m here to help myself and spend your inheritance better than you can.”
TOP are not centrists. A cursory analysis reveals their socialist colours as they sing that siren song. It’s never worked before, maybe next time it will.
8 comments:
JD’s analysis of TOP’s diabolical plan would never find the light of day in our corrupt MSM who fictitiously dub them a centralist party. The history of 20th century communists shows a major gap between the utopian promises made in theory and the harsh realities delivered in practice.
How often will the lie “expected to find that land tax payment on your family home” be repeated? It is deferrable until death or sale for all retirees. Where is the hoopla about the punitive taxes we have labour while the wealthy get away without paying their fair share? Where is the hand-wringing about d decades of building infrastructure debt? Or the economy being based on selling dirt back and forth while our GDP. plummets? Some commentators don’t have a clue.
Thank you JD for posting this. Oliver Harwich posted on Brash and Michel some drivel about how everybody would be better off. You now tell the truth.
Anon 6.58 it is not a lie, you either find it and pay or the longer you live eventually the house is sold and proceeds taken from the sale...the longer you live it may all end up in council/state hands. It is an enforced equalisation policy. The $400 is included in super. TOP gets everyone on a benefit. It will get votes . Hey if I wanted to drop out of school and hang out with my mates on the booze, dope and surf and sheilas, great....TOP rewards the lazy
Why comment , Anonymouse 6.68am, when you clearly haven’t read the article? The entire second half deals with the “land tax payment on the family home and how this can be deferred until death” leading to a death tax of hundreds of thousands of dollars that you can’t leave to your family because TOP steps in and steals it.
Do I suspect that you are (a) under 65 yourself, and (b) you’re already making plans for how to spend your unearned windfall when the UBI kicks in?
Selling property back and forth as the basis of GDP is economic suicide. The major parties have no clue, neither do the cooker parties. TOP bringing solutions and everyone else is happy to take the ride to long term economic poverty.
I've said it before - Top are trying to sell snake oil to the gullible.
Their methods are nothing more than a rewording for a "forced redistribution of wealth".
That as we know always leads to the age-old problem - Eventually they will run out other people's money.
I see them only as delusional Marxists with no sense or willingly blind of history.
So, I am reluctant to consume their poisonous elixir.
TOP really do need to be put under the microscope when it comes to costing this crazy policy. All it's supporters really show their ignorance, jealousy and greed in their eagerness for 'free' money. None so blind as though who will not see
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