I think TOP does have the best proposal compared to other parties, but I have reservations.
The tax reform concept has a lot going for it in that it is difficult to evade, but I think it makes some overly simplistic and generalised assumptions about why people own homes.
I understand why it needs to include the family home. Rich people can sink vast amounts of wealth into an expensive home and enjoy it tax free if the family home is not included in tax assessment.
The trouble with the policy is that it assumes the motivation of all people to buy homes is investment.
Someone else (actually correcting a popular misconception about the policy that results in some people thinking it's worse than it is, ie many people don't seem to realise you ONLY pay the tax on the equity in your home, NOT the market value, so if you've just taken out a mortgage you won't actually pay a lot as the bank owns most of your home.), made a comment along the lines of how I'm thinking.
"Owning a home is not an investment, it's a basic human right." - Basically since the supply of caves stopped keeping up with demand, humans have been making themselves homes, and defending them as their own.
Even if it's mostly fair, I suspect there will be significant psychological barriers among most voters.
The assumption stated in the policy that people will naturally be rational overlooks a lot of human behaviour. Indeed there are many products and services on the market that depend on irrational behaviour of humans.
People are already conditioned to pay income tax, and it has dropped substantially over recent years, so even if dropping income tax still further while adding a new asset tax leaves many people better off, the psychology of a new tax may be enough to put many people off.
Not all homes are created equal, and someone who lives in a multi-million dollar mansion isn't merely satisfying their need for a roof over their head, but actually does have an investment, as they can sell up, realise any profits and downsize.
The same applies for anyone owning multiple homes.
For someone with a single, modest home who is the owner/occupier, they don't have that luxury. If other people have pushed the value of their home up through speculation, and they sell up, they'll make no gains, and possibly a loss through fees if they purchase elsewhere, yet they still end up being taxed for the excesses of other people's speculation.
If owner/occupiers are the major source of house price inflation, that suggests two possibilities. Either the population is increasing faster than the rate of house building and/or people are building increasingly lavish homes.
If it is the former, given that NZ's fertility rate is below replacement, then the source of population increase is from migration, and it's not fair to penalise New Zealanders for house price inflation driven by unsustainable immigration.
If it's the latter, it may be partially due to increasingly tough building standards and regulations that push the value of new homes higher.
The easy solution to this is to have the tax proposed, but to have a tax-free threshold on the family home tied to median incomes. This allows for not all homes being created equal, nor everyone's reason for owning a home necessarily being the same. The stated goal of the tax is to reduce the price of houses relative to incomes, and this would still provide a good incentive for this. If median incomes rise relative to house prices people can have more expensive houses without paying tax. People can get some or all of their home tax free, but only if they're affordable for a good part of the population.
That's likely to appeal to people's psychology. People have an aversion to tax, so if you impose a new tax, but also provide them with a way to avoid it that will only work if society gets fairer so that more people can afford homes, then you still achieve a positive outcome, and people are more likely to buy into it.
With regard to multinationals, I've seen some people suggest a financial transactions tax, and I think Gareth has said international agreement is required for this. I don't quite understand why this is the case, as banks already charge a form of financial transaction 'tax' (actually a bank fee) on international credit card transactions. If banks are capable of identifying international transactions and charging a fee on them, why is it not possible for them to collect a fee on behalf of the government? Thousands of New Zealand businesses are obliged to collect tax on behalf of the government in the form of GST, but financial services are exempt. To be fair, why can't banks do their bit to help collect tax too, especially where their systems would be helpful, such as purchases or money transferred offshore?
There may be other ways of dealing with the likes of Google and Facebook, but at the end of the day there has to be some concrete action on ensuring they pay their fair share of tax, as telling people you're going to tax equity in their family home while the government itself spends a good deal of taxpayers' money on advertising on Facebook and Google which goes offshore is hardly going to be seen as fair.