Greens hate it when they are caught out
The Herald reports:
The Green Party is accusing Treasury of politicisation after the department suggested a more conservative reading of its own wealth tax analysis than what the Greens had used to model their “super-rich tax”. …
As recently as Friday, the Greens had been saying Treasury’s modelling was in line with their own.
By Saturday, when the Herald presented commentary from Treasury that suggested the party’s reading of that advice was incorrect, the Greens hit out at the department itself, saying the organisation’s view was “out of step with recent research and experience”.
This is pretty appalling stuff. They incorrectly claimed that their modelling was in line with Treasury’s. They said that to give their policy credibility. And then when they finally admit they got it wrong, they then attack the Treasury modelling.
In the paper, Treasury estimated that for every 1 percentage point of wealth tax, there would be a “17.5% reduction in the in-scope wealth base” thanks to the behavioural response
That means that if wealth is taxed at 1% then 17.5% of the taxable wealth will go elsewhere, if it is taxed at 2%, then 35% would go elsewhere and so on, either offshore or lost through some other behavioural response to avoid paying the tax. The Herald, in a previous story, noted that this would suggest the Greens’ 2.5% wealth tax would see avoidance of 43.75% — although Treasury did not model a 2.5%.
This means that 44% of the (taxable) wealth of New Zealand would move offshore. Not only does this mean the wealth tax will bring in much less money than the Greens claim, it will also have a very significant impact on income tax, and employment. Imagine almost half the private wealth in NZ disappearing overseas, and try and imagine that this would not have flow on effects.
The Herald story also reveals how the Greens reacted to the Herald exposing their mistake. They did the following:
- Demand the Herald retract the story
- Then claimed the Treasury modelling (which they claimed they based their policy on) was out of step with recent experience
- Also claimed Treasury didn’t understand their own modelling
- Then claimed Treasury was politicised by telling the truth that the Green policy was not consistent with the Treasury modelling
I also remind people that 75% of the European countries that had a wealth tax have now abolished it.