Submission to - Tax Working Group

April 2018

This is only the introduction and the conclusion. Read the full submission here (pdf)

The Chairperson

Tax Working Group 2018

Wellington

April 2018

 

The submissions background paper contains the following statements:-

 

1.     The primary objective of tax policy is to provide revenue for the  government to fund the provision of public goods and services, and  redistribution. Oliver Wendell Holmes put it more succinctly: “Taxes are  what we pay for civilized society”.

2.    A good tax system is one where the tax due is actually collected.

       New Zealanders should not be able to avoid paying tax through evasion or avoidance arrangements.

3.     Taxpayers’ costs of complying with the tax system and the  government’s costs of administering the tax system should be kept to a  minimum.

4.    ‘Nāu te rourou, Nāku te rourou, ka ora ai te iwi’

      ‘With your contribution and mine, the people will prosper’.

5.    GST is regressive in that lower-income households tend to pay a larger proportion of their income in GST.

6.     Changes in technology, particularly with digital communications, are  changing business practices and the way people earn income.

 

We would like to address each of these statements in turn and in the course of doing so, address some alternatives.

 

1.     If, as Oliver Wendell Holmes put it: “Taxes are what we pay for  civilized society”, why is it that a significant portion of the taxes  people pay are not directed to that goal. For example, approximately  $4,500,000,000 every year (about what is spent on Police & Law and  order) goes directly by way of interest payments into the profits of  banks and financial institutions that the government borrows money from.  

 

Government  borrowing could instead be accessed direct from the Reserve Bank at no  interest (and possibly without the need for repayment) as is  increasingly being done in Japan.  That $4.5 billion could then actually be used “to fund the provision of  public goods and services” – supposedly the primary objective of tax  policy.

 

Conclusion

In  a modern economic system (we currently have an outmoded one) the aim  should be to reduce tax as much as possible to leave greater spending  power in the hands of individuals.

 

With that aim in mind the Tax Working Group should recommend:-

-          Progressive removal of as many taxes as possible, especially GST.

-          Introduction of a transactions tax on all bank account withdrawals.

-          Funding of increasing amounts of government expenditure through the Reserve Bank.

-          Reduction in the amount of credit creation undertaken by the private banks.

 

Chris Leitch

Leader - Finance Spokesperson

Social Credit