John MacDonald: We are all part of the tax problem

Another day and news of yet more surgery delays at Christchurch Hospital. Maybe if the super-rich were paying their fair share of tax, we wouldn’t be in this mess. Because, in a nutshell, your typical rich-lister pays about half as much tax on every dollar of income they receive, compared to the rest of us. That’s the main message the Government’s been pushing from the IRD’s report on the tax affairs of about 300 of the wealthiest families in New Zealand. And, essentially, the main reason for that is we don’t have a capital gains tax in New Zealand. Since the report came out, some people have been quick to point out that the numbers in it are a bit skewed because they’re based on assumptions of how much profit these people might make if they sold their fancy homes and things. The kinds of profits or capital gains that wouldn’t be taxed, because we don’t have a capital gains tax. And it seems that every time Revenue Minister David Parker has opened his mouth in the past 24 hours, he’s been falling over himself to say that this is not the start of any major tax reform. But, irrespective of what the Government does or doesn’t do with this information dug-up by IRD, there is a conversation to be had. Because, put simply, irrespective of tax laws - it is not fair and decent that these people pay a much smaller proportion of tax on their income, compared to the rest of us. Simple. It’s not fair and it’s not decent. And some of the nonsense that some people have been trotting out trying to defend it has been incredible. People saying ‘aww, without these people we’d be in the poo. These rich listers are the ones who take all the risks and create all the jobs” blah blah blah. Yeah, that’s probably true. But is that really an excuse for them not to make the same contribution as the rest of us? Of course it isn’t. And I bet these people banging on about how great the rich are and how we should be cutting them some slack because “without you good sir, we would be nothing” - I bet these same people wouldn’t be quite so forgiving of people rorting the system at the other end of the wealth spectrum. People on benefits. Nah, they’re a bunch of bludgers sucking the system dry, aren’t they? In it for everything they can get. But the rich-lister paying about half as much tax on every dollar of income they receive, compared to the rest of us? They're untouchable. Don’t mess with them. This attitude staggers me. But here’s where things get tricky, really tricky. Because if we want things to be fair and decent, then we have to face up to the fact that nothing can be done about it unless we are prepared to be part of the solution too. And this is the point where you say “what a flippin’ hypocrite you are MacDonald”. Because, if we want to fix this ludicrous situation where the super wealthy pay about half as much tax on every dollar of income they receive, compared to the rest of us - then the obvious solution is a capital gains tax. Which would certainly see the rich-listers making a fairer tax contribution, but it would also hit you and me in the pocket too. If you own a house and you sell it for a profit, you’d lose some of that profit paying a capital gains tax. If you own a rental property and sell it, you'd be taxed. And I’m going to be completely honest with you - I would resent that. Because why on earth would I want to lose any of that profit? I wouldn’t, would I? You wouldn’t, either. But, at the same time, I’m ready to point the finger at the super-rich and tell them that they should be doing exactly what I wouldn’t want to do myself. So yes, I’m a hypocrite. And I’m pretty confident that, when push comes to shove, you’re a hypocrite too. And that is why nothing will change. Because our hypocrisy - my hypocrisy, your hypocrisy - is license for every politician in this country to keep sitting on their hands and doing absolutely nothing about it.See omnystudio.com/listener for privacy information.