Green Party to abstain from tax changes that will worsen house crisis in absence of tax on assets

The Green Party will abstain from a bill that will make slight changes to income tax brackets.

This is because it is not complemented by a tax on asset wealth or capital gains, including assets held in trusts, which means it is likely to further increase inequality as high income earners are incentivised to shuffle even more money into property.

Green Party Co-leader James Shaw said today:

“The last time the top tax rate was increased to 39 cents without also taxing wealth or capital gains, we saw house prices increase 17 percent because people channelled income into trusts instead, and those trusts invested in property.

“Increases in income tax, even at the top, with no taxes on asset wealth or capital gains just encourage people who own their own businesses and set their own high salaries, to arrange their finances in ways that reduce their income tax.

“This bill will just increase the distortion between income that is earned through work, and income that is earned through property investment and wealth accumulation.

“Property investors will likely continue to see significant increases in the value of their assets whilst those who are locked out of the market will find it even harder to get in.

“This is why, in the recent election campaign, the Greens campaigned on a platform of taxing wealth, not just income. Taxing income without taxing wealth just makes the problem worse.

“Additional to inflating housing prices, the policy is predicted to only bring in a small amount of revenue, none of which has been earmarked to go to people living in poverty.

“It is because of these reasons that we could not in good conscience support legislation that is likely to lead to worsening wealth inequality”.

Green Party Co-leader Marama Davidson said today:

“New Zealand has increasing poverty and inequality. This is now getting worse, because COVID-19 hurt working New Zealanders and their incomes, whilst asset owners continued to prosper.

“The Greens believe we should ask those who have benefitted the most to chip in a bit of what they’ve gained to help the people who need support during this crisis.                             

“Many New Zealanders will understand the clear solution that exists to address poverty and will be frustrated by the refusal to engage in all of the solutions available to us.

“We couldn’t vote in favour of a bill that will likely exacerbate wealth inequality in New Zealand”.

ENDS

Latest Housing Announcements

Story

Government must build more public houses, not find excuses to sell them

The Green Party says the Government must use the review of Kāinga Ora as a platform to build more homes, not an excuse to sell them off. 
Read More

Story

No-cause evictions leave no hope for renters

The Government’s introduction of legislation that would enable landlords to end tenancies with no reason marks a dark day for the 1.4 million peopl...
Read More

Story

A win for Wellington - Greens welcome more housing

The Green Party is welcoming the announcement by the Minister Responsible for RMA Reform Chris Bishop to approve most of the Wellington City Counci...
Read More

Story

Landlord Government once again pushes renters into the cold

The Coalition is trying to axe yet another opportunity to improve rentals by dropping the Residential Property Managers Bill.
Read More

Story

Surprise: Landlord tax cuts don’t trickle down

The Green Party is renewing its call for rent controls following reports of rental prices hitting an all-time high.
Read More

Story

Landlord Government leaves little hope for renters

The Government’s announcement on tenancy rules prove that it does not care about renters. 
Read More

Latest Finance Announcements

Story

Trickle-down tax cuts while the planet and social contract burns

The Government’s bloody-minded commitment to delivering trickle-down tax cuts at all costs comes at the expense of investment in people and planet. 
Read More

Story

Minister of Finance reheats austerity politics

This morning’s pre-Budget speech from the Minister of Finance offered no “meaningful” news on the Government’s trickle-down economics based plans.
Read More

Story

Central Bank makes clear Government is pouring fuel on housing crisis fire

Today’s Financial Stability Report has once again highlighted that poverty and deep inequality are political choices - and this Government is choos...
Read More

Story

Cold climate cuts for Christmas

Once again, the National Party has shown a breathtaking willingness to say one thing during an election campaign and then do the exact opposite whe...
Read More

Story

State of books makes clear case for wealth tax

The case for a wealth tax has never been stronger.
Read More

Story

Crumbs from the property speculator’s table

High-income property speculators will be the biggest winners from a National Party tax plan that will send house prices and rents through the roof,...
Read More