“. . . a fairer tax system”? [update]

BILL ENGLISH HAS BEGUN his working year by talking up his plans for something he calls "a fairer tax system.”  If that bromide is to mean anything at all, then there is only one possible means by which Bill English could deliver such a thing: By not spending so goddamn much.

That, however, is not on the agenda.

Pity, because there’s plenty of easily quashed boondoggles that any responsible Finance Minister would be eyeing up with a sharpened axe:

• Cindy Kiro's Office for the Children's Commissioner
• Peter Dunne's Families Commission
• Paula Rebstock's Commerce Commission
• David Lange's Ministry for Women's Affairs
• Jim Anderton's Ministry of Economic Development
• The Ministry of Youth Development
• Asia New Zealand Foundation
• The Ministry of Pacific Island Affairs
• The Ministry for Maori Affairs
• The Race Relations Conciliator
• Alcohol Advisory Council of New Zealand
• Action on Smoking Hysteria
• Electricity Commission
• Energy Efficiency & Conservation Authority
• The National Advisory Council on the Employment of Women
• The Department of Labour
• Welfare for Working Families

That's just a few of the bureaucratic sacred cows that any responsible government should have in their sights when they’re talking about “fairer” taxes. If Bill really did want to relieve the burden of big government from New Zealand taxpayers, then those troughs for time-servers should all be wearing a target.

BUT CUTTING SPENDING IS not on the agenda of Sir Double Dipton.  Shuffling around the means by which he fleeces us is.

As Billy Bob and his boys have already signalled, what they mean by the bromide of “a fairer tax system” is simply a slight fall in income tax and a huge hike in GST and Land Tax—a  cynical piece of sleight of hand that will allow them to sock all New Zealanders while pretending they’ve belatedly kept their election promise to deliver income tax cuts.

There’s no possible way there’s anything “fair” about whacking up the price of land, or the price of everything everywhere.  There’s nothing responsible about making everything more expensive just to pay for this over-spending government, no matter how many worthies say otherwise.

MOST OF THE WORTHIES who talk about such things have been banging excitedly on for months about the prospect of a Land Tax—as if we don’t already have such a thing, and as if it would somehow have stopped the housing bubble from inflating.

It can only be abject ignorance that would allow any commentator to make either argument. 

No Land Tax or Capital Gains Tax anywhere in the world stopped any housing bubble anywhere—it can only be blind faith that keeps anyone insisting it will.

And New Zealand land is already subject to iniquitous financial impositions.  I look for example at a cost estimate prepared for a recent subdivision proposal in Auckland’s eastern suburbs, for which the grey ones will be putting their hands into someone’s pocket to the tune of around $40,000 per site, payable in advance.  That’s a $40,000 dead weight on which a developer will be paying interest, and a new-home buyer will have to make up.  That’s $40,000, plus GST!

No wonder the supply of new homes is already so restricted.  No wonder, with such a restricted supply, house-price inflation is taking off again (something that was easy enough to forecast some months ago). 

Now if that’s not a Land Tax that every new-home buyer is already paying, then I’m a banana.  And if there’s anything fair about whacking on higher taxes to New Zealanders who are already struggling, and consuming their savings as they do, then I’m a whole effing fruit salad.

UPDATE:  From Liberty Scott:

    “According to the NZ Herald, the Prime Minister said, ‘The Government would like to lower personal taxes.’
    “Great stuff.
    “The solution involves two words.
    “CUT SPENDING.
    “Don't increase GST …
    “Don't create new taxes …
    “Think about this John.
    “If income and company tax were reduced to a simple 20% with the first $10k tax free (hardly radical and not Libertarianz  policy), then how much MORE would that encourage a shift of investment from land to business?”