Yes, we should have a fairer tax system, but I’m more concerned about the aspects of our society that generate increasing inequity than those that fail to ameliorate it
Opinion: The “discovery” that rich asset and business owners have opportunities to structure their affairs (which are not available to wage and salary earners) to minimise their tax obligations, and which they typically choose to avail themselves of, should not have caused much surprise.
Neither should the commentary from “tax advisors” drawing attention to the various complexities and excuses for this state of affairs which are their trade speciality. (Whoever imagined “tax experts” would draw their income from the poor part of the community? When it comes to “bread and butter” issues, these people have no doubt which side their bread is buttered on.)
We know there is inequity in our society and that it is increasing. Tax policy alone will not fix that. This is not the core ground on which those wanting social equity should be fighting despite the evident inequity inherent in present taxes.
I think tax systems should be genuinely progressive, with proportionately more being paid by those with the greater ability to pay. I support that today, as I did when earning more than I do now. In this country taxation in general is neither very high nor is it very progressive compared with many other comparable places.
Revenue and finance ministers and the IRD will not lead progressive social change in a society dominated by wealth. That will only come from wider society demanding such change. We can see this wherever we look, be it education, health, housing, employment, or ecology
I support any moves that shift towards a more progressive system in that sense. It just seems the right thing to do. I do not think I am very exceptional in that view – it’s in the “fair go” category. To reverse the old saying: the devil is not in the detail. There are lots of ways to shift the burden in this direction and it makes sense to choose the most simple and efficient. Get on with it.
On the scale of the climate, health and social crises we face this is not big or even really complex. I support wealthy people paying more not because that will fix many social ills but just because it’s fair. But my expectation that the very rich will be very restricted by tax changes is low. They will cope.
Start from the obvious needs and the aims that can unite most people, and the acceptable financing solutions will follow
I’m more concerned about the aspects of our society that generate increasing inequity than those that fail to ameliorate it. Letting our society run as it does and then debating how tax is levied leaves power undisturbed and narrows the equity argument to a degree that favours the existing wealth. Here’s a secret … the wealthy can and do have more and buy more influence than the poor, and not just on tax policy. In a policy process of detailed tax policy I strongly back the wealthy and their advisors to win.
Revenue and finance ministers and the IRD will not lead progressive social change in a society dominated by wealth. That will only come from wider society demanding such change. We can see this wherever we look, be it education, health, housing, employment, or ecology.
The change has to be from governments who say “we only have this much, we do not want to annoy vested interests so we can only do so much” to ones that say “this is what we are doing because it drives the best and fairest outcomes, and the best and fairest way to finance it is this”. In other words, start from the obvious needs and the aims that can unite most people, and the acceptable financing solutions will follow.
Say to the whole community, these are the houses we are going to have, these are the health services, these are the schools, kura and universities, these are the carbon prices, these are the acceptable working conditions – now how do we best finance that? Then we have a sound base from which to have an equity-based discussion. You have to relate reasonable means to just ends, not let the means become the whole point. The vested interests will win that because it is their ground.
On the broader social goals there is a genuine opportunity to get consensus. People are not silly. They broadly know what makes up a good community and what we have to do together to achieve that. So long as they see governments as wasteful or poorly directed or not meeting their needs in that respect they will naturally not want to contribute more towards them. They will even ally with people who do not share their community objectives at all but simply want to pay less and retain their privilege. It can seem like the same cause even when it is not, and much effort will be spent to persuade them of a shared interest which is not real.
A debate focused only on tax might well hurt our common interests.