Kerre Woodham: What was the point of that IRD tax report?

Last week, in fact, this very time last week, we were speculating wildly as to whether the IRD's report on New Zealand's wealthiest individuals was going to pave the way for a capital gains tax in this country.

The report came out yesterday afternoon.  It just sort of sat there - there was a big ta-da and then nothing.

We're an outlier as far as the rest of the wealthy nations of the world go, in that we have no capital gains tax, unless you count the bright line test, which is kind of a mini capital gains tax.

The report came out yesterday, and then what? Nothing.

At the same time as he released the report David Parker said look, for heaven’s sake, we're not using it as laying the groundwork for a capital gains tax, heavens no, we just thought you'd be interested.

And yet, at the same time that he was pouring cold water on the idea that he was using it to lay the groundwork for a capital gains tax, he was also saying, ‘I hold the view and I have done for some time,  that there is an inherent unfairness in New Zealand's tax system.’

I remain of the view, he said, and I think this report proves that case, that there is unfairness in the tax system.

So what is he playing it?

What the report found was that 311 of New Zealand's wealthiest individuals paid 9.4 per cent of their total incomes and tax versus an average tax rate of 20.2% paid by middle-income Kiwis.

So David Parker has spent years campaigning for a capital gains tax. He believes our tax system is unfair in part. And yet both he and the Prime Minister have spent considerable time stressing to us all, underlining, making the point they won't be changing the tax system at this particular point in time.

So what was the point of the report?

It could have just come out like any other report, sunk like a stone and we'd never have seen anything of it ever again.

But there was a press conference for him to say ‘look at these incredibly wealthy people who are only paying nine per cent of tax. I think our tax system is unfair. We're not going to introduce a capital gains tax. Don't be silly. Where did you get that idea from?’

I don't know, David, where did we get that idea from?

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