Thoughts before 20th September 2014

I just wanted to add a little piece of work before the election , just to get my head on straight.

This will be my first political piece before the election post my February 6 2012 incident, so bare with me.

I have already voted, 2 ticks blue as I have done for the last 5 elections.

I come from a Labour household, where they supposedly, looked after the working man.

My first 2 votes were for labour. I have grown up since then.

I could never vote for Labour again, unless they changed their high tax, high spending ways.

National are not my perfect idea for a political party, but they are the closest.

All the other parties, except ACT want an intrusion into your and your loved ones lives. I don't want to vote for ACT because, we'll I can't, they don't have a representative in the Hawkesbay.

The perfect party would want a much smaller role in the daily lives of everyone. Through business, social, and all aspects of life.

The main reason I'm voting National are their tax policies.

Labour want to introduce 5 new taxes and for that they are to be lambasted.

One I want to briefly talk about is their CGT.

They say they want to bring it in because it's fair, because it's in every OCED bar two, because it will put a stranglehold on property prices.?

What?

Apart from the fact that their Spokeperson for finance can't explain it properly - really it would be hard for the most intelligent person explain it and he is no slouch in the brain department.

The fact is it is complicated.

In Australia, we're it was introduced in the mid 80s it was responsible for making the IRD increase in size BY a THIRD.

It's didn't do anything to house prices.

If you want to make our government even larger, complicate the tax system and put a drag on the economy. All taxes are a drag, no taxes are good, or fair or stimulate growth.

They have the opposite effect.


c darrenrickard 2014

Labour's Capital Gains tax to impact negatively on house prices

Originally from Political Animal

If I maybe slightly political this morning.

The impact on the economy of a 15% capital gains tax (CGT) proposed by Labour will be huge. Not only will all asset classes be negatively impacted directly but the 15% tax on rental housing will have a direct impact on the selling prices of the family home.

The 15% tax on rental housing will almost immediately affect that sector as shortly after election day investors would want to sell before the CGT is imposed in 2013. It is hard to tell by how much but in a depressed market with increased selling pressure you don't have to be Einstein to figure out it will be substantial negative impact.

The spill-off of that will be pressure from falling rental house values impacting on sellers of private homes. These are of course homes that kiwis generally have their biggest investment in.

Long-term a CGT and its impact on house prices may be debatable in terms of its influence but in the short to medium term it is economics 101 that prices for the family home will fall.

Given a more robust economy, sustainable rising house prices and good demand a CGT may not have been such a bad thing in terms of its economic kick but in the most uncertain economic times since the Great Depression a CGT has the potential to kick-off a major housing sell-off and a consequent drop in house prices.

The fallout from that is obvious. Less confidence in people's personal financial situation and a resultant slowdown in consumer spending and a loss of jobs.

Labour really need to think hard about this if they are lucky enough to gain enough votes on November 26. It may have support from left commentators like Gareth Morgan, Bernard Hickey and the hapless Rod Oram but it is probably more akin to an exercise in economic suicide rather than a good way to raise more taxes - especially given the tough times that we are currently facing and will continue to face for years to come.

Disc I will be voting National this Saturday

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c Share Investor 2011

Labour's Capital Gains tax to impact negatively on house prices

The impact on the economy of a 15% capital gains tax (CGT) proposed by Labour will be huge. Not only will all asset classes be negatively impacted directly but the 15% tax on rental housing will have a direct impact on the selling prices of the family home.

The 15% tax on rental housing will almost immediately affect that sector as shortly after election day investors would want to sell before the CGT is imposed in 2013. It is hard to tell by how much but in a depressed market with increased selling pressure you don't have to be Einstein to figure out it will be substantial negative impact.

The spill-off of that will be pressure from falling rental house values impacting on sellers of private homes. These are of course homes that kiwis generally have their biggest investment in.

Long-term a CGT and its impact on house prices may be debatable in terms of its influence but in the short to medium term it is economics 101 that prices for the family home will fall.

Given a more robust economy, sustainable rising house prices and good demand a CGT may not have been such a bad thing in terms of its economic kick but in the most uncertain economic times since the Great Depression a CGT has the potential to kick-off a major housing sell-off and a consequent drop in house prices.

The fallout from that is obvious. Less confidence in people's personal financial situation and a resultant slowdown in consumer spending and a loss of jobs.

Labour really need to think hard about this if they are lucky enough to gain enough votes on November 26. It may have support from left commentators like Gareth Morgan, Bernard Hickey and the hapless Rod Oram but it is probably more akin to an exercise in economic suicide rather than a good way to raise more taxes - especially given the tough times that we are currently facing and will continue to face for years to come.

Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz

C c c Darren Rickard 2011

Labour's capital gains tax to punish investors and the economy

Originally from www.shareinvestorblog.com

Lets take a look a Labour's new 15% capital gains tax (CGT) that they are going to impose on New Zealanders should they be lucky enough to be elected come November 26.

We probably need to start from the premise that any tax, whether it be a CGT, GST, income tax or otherwise is counterproductive to growth and always affects the income, asset or investment in a negative way and is therefore anti growth and anti productive.

The country does however need to collect some tax to run the state apparatus (and one may argue how big that should be) and a fairer flat tax system that would incentivise all to work harder and smarter and increase productivity and get the economy moving.

Labour's raft of new taxes across the board for those that earn $150,000 and more and their capital gains tax across all asset classes, except the family home, is not the answer to our current economic malaise or a positive way ahead for the future because if introduced will have the opposite affect to that stated by Phil Goff and his merry henchman David Cunliffe.

What we need to get us out of the economic mess that Labour incidentally spent their way into, is to remove taxes on savings, business investment, stockmarket investment and rental housing and other asset classes and thereby stimulate growth in these areas rather than stifle it with more crippling taxes. Labours 9 years of high taxes, huge spending and backward productivity growth should have been a lesson to them not to repeat the same mistakes but hey they are going to do it all again.

In general then a CGT is going to have a severe impact on investing but let us look at the topic that interests me and those that read this blog the most .

"Will apply to shares for those who trade them "on an occasional basis". Phil Goff New Zealand Herald , 14 July 2011

Lacks detail and needs defining but I will go on.

What the hell will a 15% CGT do to the stockmarket short term if introduced and in the long term?

Obviously before its introduction investors will want to pull out of the stockmarket to crystalise any gains made before the tax is introduced and clearly this will have negative impacts for the markets in the short to medium term. How much is unknown but in my experience it is unlikely to be a small impact and could very well lead to a stockmarket crash of some description.

In the long-term the consequences of a CGT are obvious. Investors are likely to avoid the local stockmarket and local business investment and decide to either spend the money they would have invested or send it offshore where stockmarket and business investments have a fairer tax treatment.

There is no practical, logical, social, ethical or financial reason to impose either the CGT and higher income taxes as whole and specifically a CGT on shares because the desired outcomes are all negative ones.

The only conclusion from that then is this grab for your money is a deeply political one. It is the politics of envy and greed where those that have worked themselves into a position that they earn a good living and have invested instead of spent will be punished for doing so.

You simply don't punish the goose that lays the golden egg and those that Phil Goff are targeting pay the vast bulk of taxes in this country and individuals that would one day want to apsire to being one of those people who have done well are going to be seriously disincentivised by these massive new taxes.

I will end on this quote by Phil Goff:

"Expected to affect less than 10 per cent of New Zealanders"

This is nonfactual because anybody who has a cost imposed on them will simply pass that cost on to those that can least afford them. Its economics 101 and Labour have failed on that test alone.

It will affect all of us, not just business owners, shareholders, rental houseowners and it will impact on those that Phil Goff and Labour say they advocate for and who vote for them. Those at the bottom of the income scale.

These taxes are not positive at all for the economy and risk the country going into economic decline should they be imposed after a Labour win on November 26 or at any latter stage should the party be shown the voters bottoms once again in 2011.

Choose wisely when you vote this year.

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c Share Investor & Darren Rickard 2011

Labour's capital gains tax to punish investors and the economy

Lets take a look a Labour's new 15% capital gains tax (CGT) that they are going to impose on New Zealanders should they be lucky enough to be elected come November 26.

We probably need to start from the premise that any tax, whether it be a CGT, GST, income tax or otherwise is counterproductive to growth and always affects the income, asset or investment in a negative way and is therefore anti growth and anti productive.

The country does however need to collect some tax to run the state apparatus (and one may argue how big that should be) and a fairer flat tax system that would incentivise all to work harder and smarter and increase productivity and get the economy moving.

Labour's raft of new taxes across the board for those that earn $150,000 and more and their capital gains tax across all asset classes, except the family home, is not the answer to our current economic malaise or a positive way ahead for the future because if introduced will have the opposite affect to that stated by Phil Goff and his merry henchman David Cunliffe.

What we need to get us out of the economic mess that Labour incidentally spent their way into, is to remove taxes on savings, business investment, stockmarket investment and rental housing and other asset classes and thereby stimulate growth in these areas rather than stifle it with more crippling taxes. Labours 9 years of high taxes, huge spending and backward productivity growth should have been a lesson to them not to repeat the same mistakes but hey they are going to do it all again.

In general then a CGT is going to have a severe impact on investing but let us look at the topic that interests me and those that read this blog the most .

"Will apply to shares for those who trade them "on an occasional basis". Phil Goff New Zealand Herald , 14 July 2011

Lacks detail and needs defining but I will go on.

What the hell will a 15% CGT do to the stockmarket short term if introduced and in the long term?

Obviously before its introduction investors will want to pull out of the stockmarket to crystalise any gains made before the tax is introduced and clearly this will have negative impacts for the markets in the short to medium term. How much is unknown but in my experience it is unlikely to be a small impact and could very well lead to a stockmarket crash of some description.

In the long-term the consequences of a CGT are obvious. Investors are likely to avoid the local stockmarket and local business investment and decide to either spend the money they would have invested or send it offshore where stockmarket and business investments have a fairer tax treatment.

There is no practical, logical, social, ethical or financial reason to impose either the CGT and higher income taxes as whole and specifically a CGT on shares because the desired outcomes are all negative ones.

The only conclusion from that then is this grab for your money is a deeply political one. It is the politics of envy and greed where those that have worked themselves into a position that they earn a good living and have invested instead of spent will be punished for doing so.

You simply don't punish the goose that lays the golden egg and those that Phil Goff are targeting pay the vast bulk of taxes in this country and individuals that would one day want to apsire to being one of those people who have done well are going to be seriously disincentivised by these massive new taxes.

I will end on this quote by Phil Goff:

"Expected to affect less than 10 per cent of New Zealanders"

This is nonfactual because anybody who has a cost imposed on them will simply pass that cost on to those that can least afford them. Its economics 101 and Labour have failed on that test alone.

It will affect all of us, not just business owners, shareholders, rental houseowners and it will impact on those that Phil Goff and Labour say they advocate for and who vote for them. Those at the bottom of the income scale.

These taxes are not positive at all for the economy and risk the country going into economic decline should they be imposed after a Labour win on November 26 or at any latter stage should the party be shown the voters bottoms once again in 2011.

Choose wisely when you vote this year.

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c Share Investor 2011

Investment Property Taxes a boon for the Stockmarket

There has been allot of talk about taxes in relation to investment property recently. There has been a government task force looking into the idea of capital gains taxes on investment property, principally a capital gains tax.

It appears our "business friendly" National Government are trying to shake down its citizens for even more taxes to fund the continued high spending of our Government.

I don't remember them in their pre-election campaigning that they were going to implement new taxes but be that as it may it looks likely some kind of tax on investment property is likely.

I don't agree with this at all, taxes kill economies and make Governments bigger and we know that aint good.

As I wrote last month the best thing to do to put investment property on an even keel with other classes of investments is to remove taxes from those other classes, not add another wallet numbing penalty to property investors.

Either way though if there are taxes applied to investment property, and I think there will be, this is going to be a minor boon for the New Zealand Stockmarket.

The withholding tax applied to dividends by Labour in 2007 further put stockmarket investors on the back foot and any move to even the score with property investment is a win for New Zealand.

The Nats probably wont raise taxes on investment property by a significant amount because of the obvious political ramifications, but any move that hamstrings the investment property market is going to be good for those of us investing in real productive companies that are either listed on the Stockmarket or indeed private ones.

About time us wise ones we got a break.

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c Share Investor 2009

Capital Gains tax a millstone for New Zealand Inc

A question of intellectual dishonesty, economic illiteracy and empire protection by politicians and their hangers on currently surrounds the topic of a capital gains tax on investment housing.

We all know why investment housing is so popular and does so well in this country. There are countless tax advantages that this form of investing has over every other investment class, not the least one being the lack of a tax on capital gains, so it is bleedingly obvious as to why every Tom Dick and Harriet has an investment property.

The lax of taxes helps make for a successful investment, any investment, a third form economics student will tell you that.

Stockmarket investing is taxed to the hilt, as is investing in your own business, as are your savings in a bank or in a retirement scheme.

We all know how badly these investment classes, and our economy have suffered as a result of high taxes, while at the same time investment property is favoured above all by having no State hand reaching into your pocket.

So you think I want to tax investment property to even out the score?

Hell no.

Here is something quite radical and perhaps a little outside the square. Why not drop taxes completely on all asset classes?

That way investors will have a true choice about which investment they might want to make based on its merits or otherwise and if they invest in a business directly or a business indirectly on the stockmarket or put money into a savings account, the money is more likely to go into something productive rather than an over priced investment house with phony tax advantages and it will lift the economy as a result.

Aint that what we need, especially right now?

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c Share Investor 2009