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I like your thinking differently, but I don't agree with taxing the utilization of private assets

I like your thinking differently, but I don't agree with taxing the utilization of private assets

I don't think taxing people for utilization of private assets (living in their family home) is reasonable because; 1) Where do you draw the line on productive assets? Should we also tax everyone for owning a car (some cars are worth than a house), for owning a bicycle, for owning a sewing machine, for owning a fishing rod? All these are productive assets, providing us with value that we don't have to otherwise pay someone else to obtain. Why are some "productive assets" treated differently than others for the sake of being an asset. The real point is income or profit derived at some point in the life of the asset being subject to taxation. Owning property for the purpose of deriving profitable income - tax it. Buying an selling property with the intent of deriving profitable income - tax it. Selling a car/bike for more than paid for it - in a perfect world, tax it. Deriving profitable income by selling clothes made using your sewing machine - tax it. Deriving profitable income from selling the fish you catch with your fishing rod - tax it. 2) If the house you live in is to be taxed, it should be tax at one flat rate no matter what the value of the property is. If I live in a $70,000 house in Wairoa or a $3,000,000 house in Auckland, I am deriving the exact same utility from this asset - shelter. The only fair way to tax this would be to tax both scenarios the same. 3) A tax based on the capital represented by owning a property is not fair in this situation. Jane purchased her home in 1987 for $75,000. Jane has lived in this home for the past 30 years. Her home now has a RV of $1.5M. Over the 30 year period, Jane's wages have increased inline with the average wage. Jane has a modest amount of savings and makes enough money each week to pay for her living costs with a small buffer. Apparently according to the TOP party, Jane has $1.5M of capital that she is has not deployed efficiently, is avoiding paying tax on, and will now by taxed by the government. Jane is unhappy, because she doesn't feel like a millionaire, she feels the same as all the other middle class people she calls her friends. The problem here is for Jane to realize the $1.5M asset she has, would require her to sell her house. Jane doesn't want to sell her house, she just wants to live in it. FWIW - I am 36, live in Auckland, and do not own property. Although it is really hard to get over the line to property ownership, I am close and will get there this year. While the current system is broken, I don't believe this solution is the answer. In addition, as a business owner who employs 20 staff, the thing that pisses me off, is people who buy, sell, and rent property for the intention of deriving profitable income, but are not subject to tax. Gareth, please do something to tax profitable income from all sources, not the utilization of of assets.

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    • Chris Marffy
      tagged this with good 2017-07-27 10:05:14 +1200
    • Matt
      commented 2017-06-27 22:30:37 +1200
      I agree with everything you’re saying especially about people who are buying, selling and renting to make a profit. yes rental income is taxed but not the capital gain which is why people invest in housing. Property speculators are land banking these days as having tenants means having to manage all the issues that go along with them. Taxing the capital gains will at least bring it in line with other income related taxes, and dissuade prolific buy ups of properties for personal gain. No one needs 10 rental properties but if you feel that’s how you want to invest your money then you should have to pay tax like everyone else who is investing, whether it’s savings in a bank or shares in the stock market. The issue here is by investing in housing you’re effectively denying someone else the opportunity to purchase that house to live in.
    • Matt
      tagged this with good 2017-06-27 22:30:36 +1200
    • James
      commented 2017-05-24 08:45:30 +1200
      BTW – its crap that the comments form doesn’t retain page breaks. Makes feedback look terrible and hard to read.
    • James
      published this page in How would you make New Zealand Fair Again? 2017-05-24 08:42:16 +1200