Gift duty brought in $1.8 million to the Government. It costs the Goverment $900,000 to collect it so net revenue is $900,000. The private sector compliance cost for all the returns etc was estimated at $70 million. So seems like a no brainer.
The scrapping of gift duty, announced by the Government on Monday, represents a tax cut by stealth for the wealthiest New Zealanders, Labour leader Phil Goff says.
“The abolition allows the very wealthiest New Zealanders to structure their affairs by transferring income and assets into trusts and to their children to reduce their tax liability,” he said.
I despair of the Opposition. I really do. Their politics of envy. If they even bothered to read the facts they would realise the very wealthiest are already transferring income and assets. The fact gift duty only collects $1.8 million a year is proof of that.
Just imagine – if Labour is willing to cost NZers $70 million a year to collect $900,000 of extra net revenue – just so it can say it is punishing rich pricks, how far will it go with hiking the top tax rate?
The really stupid thing about Goff’s statements are that as we have no death duties anymore, one can pass your savings onto your kids tax free by just keeping them until you die. But if you wish to say help your child with a contribution towards the deposit for their first home, then you get whacked with gift duty.