Or did you just pull everything out of thin air? I have read your FAQ and your policies, but found it hard to find literature of precedent and proof. How do you know they will work? Has this been done before in any other countries? Have you done any economic modelling? Have you consulted with economic experts or do you have a 'screw the experts' mentality?
Official response from Gareth Morgan
Many governments try other tactics to close this loophole like estate duties, inheritance tax, wealth tax, land taxes, capital gains taxes etc. They are all aimed at the same thing - the untaxed return owners of capital make over time. Most of the taxes above impact as a one-off hit, often at the end of life. This is a political choice but the consequence of it is that capital is mis-allocated (ie; allocated according to tax impact rather than economic return) right through the life of the owner. You can think of the approach we propose as aimed at the same thing by impact in an as-you-go basis. That’s the logic.There are a number of very successful economies who have not had the runaway house price inflation for example that we have facilitated. What they have in common is that unlike New Zealand they all try to address the issue rather than ignore it. Is pay-as-you-go tax on income than an end-of-life, or event-triggered one-off tax? If you don’t want to distort markets along the way it’s just logic.
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