The Labour Party recently asked members via email to donate their small tax cuts back to the Labour Party to ensure Labour gets back into government next term.
Labour Leader Chris Hipkins defended the General Secretary, Rob Salmond, saying that it wasn't "hypocritical" as National's Nicola Willis alleged.
"A lot of people who I've spoken to who are in a position where they don't want a tax cut right now and they don't feel they need a tax cut right now, want to see that money to a better use," Hipkins reckoned.
He recently received a salary bump from $296,007 to $298,000 (as per the MP wage increase that Prime Minister Christopher Luxon welcomed), meaning he's still paying only 39% tax on his income above $180,000. In an act of noble selflessness, he pledged his tax cut to charity and Labour's campaign.
While National's tax cuts for working Kiwis are miniscule compared to those of landlords and corporations, Labour's plan only encompassed a 2% rise in tax for the top earners. The Green Party and Te Pāti Māori were the only parties in the 2023 election campaign that offered real tax cuts for working Kiwis and proportional tax on the wealthiest New Zealanders, shifting the burden onto those who can afford it. The cost of greed crisis sees the top 311 wealthiest families in Aotearoa still paying an effective tax rate of 8.9% — which is less than those on the minimum wage.
Despite this, Labour refused to campaign on a Capital Gains Tax or wealth tax, even though the policies had public support, in a desperate attempt to win back the centre vote that they'd already lost years prior. Hipkins says all tax changes are now back on the cards, but is this just more evidence that he'd do anything to return to power? What does he really, truly think Kiwis need right now?
The two major parties are two sides of the same coin. They work for the ruling class and the interests of capital.
The Prime Minister, before a week or so ago, owned seven properties, each worth over $2 million, a total of $21.145 million.
His property portfolios grew by $4.3 million in 2021, and he made $90,000 in capital gains every week in 2022, more money than he made as CEO of Air New Zealand.
He was the wealthiest MP as Leader of the Opposition, and once Prime Minister, he chose to give $3 billion in tax cuts to landlords.
This month, he sold one of his Auckland properties.
On that property, that he bought for $650,000 in 2015, it was listed at a set price of $945,000. That’s a capital gain of $295,000, which he paid no tax on.
Earlier this year, the government repealed the old bright line thresholds, opting instead for two-year period.
The bright line test has gone back to its initial two-year period, as was firt introduced in October 2018.
The new bright line test applies if you have sold a property on, or after, 1 July 2024.
That means any residential property sold within two years of it purchase date with be subject to tax on any profit made from the sale. Property owners buying after this date will only have to pay tax within in that two-year period.
That’s just under the amount of time that he’s owned the property, meaning he’ll pay no bright line and no capital gains tax.
New research from Victoria University has found that the richest people in Aotearoa are paying less tax than others in nine similar OECD nations.
We are one of only a few who have no tax on capital gains, no kind of wealth tax, and have the most pathetic income tax rate.
The Prime Minister and almost every other sitting member of Parliament own multiple properties and have investments in businesses, giving them all an interest in keeping the tax system stuffed and the housing market in favour of landlords.
They don't work for us. We work for them.
UPDATE (4 December, 2024):
The PM has sold his third house this year after changing the brightline test, meaning he made $300,000 tax-free on this sale - likely over $760,000 in profit on all properties sold this year.
Luxon just sold a two-bedroom unit in Onehunga for $930,000 - more than $309,500 than he paid for it in the first place ($620,500).
Had his latest property sale been the same as his asking price, he would have made total capital gains of $769,500 from the three sales. But he won’t actually tell us.
Original images sourced from NZME, RNZ, 1News, Three News, unless stated otherwise