So that people can get their heads around it, and to prevent them writing it off as "economist speak". E.g.
What? A tax on imputed rent. Imputed rent is what you would get, to rent a house like yours, if you didn't already own it.
Why? To fix the housing market, by putting property on a level tax playing field with the rest of the economy.
How much will it cost? About x% of the value of your home. So for someone in a home worth $500,000 that's about $y per week. This will still be way cheaper than renting, because as an owner-occupier, the imputed rent will stay in your pocket just like it does now. You'll just pay tax as if it had changed hands
How will I afford an extra tax? We'll cut your income taxes, so most people will come out about even
Who will be worse off? Rich people who own property worth a lot of money (and yes, this includes Gareth Morgan)
Who will be better off? People who pay rent to a landlord. These people won't have to pay the new tax, but they will get the same income tax cuts as everyone else. Also, young people and children will be better off, because this tax will gradually take the heat out of the property market. By the time today's young people want to buy homes, incomes will have started to catch up to property prices .
Is this crazy? No. Five other countries around the world do it: Switzerland, Luxembourg, the Netherlands, Iceland, and Slovenia. The OCED says that it would be good for every country, but around the world most politicians are too gutless. At TOP, we're not.
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