Been trying to add up the costs of Labour’s various taxes so people can get an idea of the cumulative impact on families and businesses. The ball park estimates for when taxes are fully implemented are:
- Capital Gains Tax $3.7 billion/year if at 15% (Labour’s own estimates in 2014)
- Canceled changes to tax thresholds $1.9 billion/year
- Imposing ETS on Agriculture $830 million/year
- Water Tax $200 million/year
- Regional Fuel Tax $160 million/year
- Tourist Tax $75 million/year
So in total the extra tax cost in New Zealand will be a massive $6.9 billion a year. Think about that for the size of our population. And that is leaving out any land tax or wealth tax which they have also not ruled out.
Rural NZ will be hit especially hard. Based on Labour’s previous CGT policy the rural sector would be hit with $1.3 billion from the CGT, plus the ETS change and the water tax for a total of $2.3 billion. This will significantly impact the competitiveness of the export sector.
It may of course be far worse than this. Labour refuse to reveal details of their planned Capital Gains Tax. We should not assume it would be at 15%, like their previous policy. This may be why they refuse to give details. They could well decide it should be at 30% or 33%, to match the main income tax rates. Is Labour likely to decide capital gains should be taxed less than income? So if they go for a 30% Capital Gains Tax (and again they refuse to reveal their tax plans) then the CGT revenue from families and businesses would be $7.4 billion and the total tax cost of Labour would be over $10.6 billion.
Jacinda was asked this week if Labour would reduce other taxes to compensate for the new taxes (as National did in 2010 with the GST and income tax switch). She wouldn’t say. So taxpayers are facing the greatest take hikes in history with Labour being the first party in recent history saying they reserve the right to impose new taxes if elected, but won’t give details before the election.