They should also do a sugar tax as well. A full block of chocolate is like $3 for almost 1000 calories.
This is a good idea; one way to look at taxes are market signals.
By subsidizing healthier foods whilst at the same time taxing unhealthy foods; we signal to the market what we want to happen.
In my opinion; this is far better than either outright bans; or the current free-for-all system.
One could easily paint it as social manipulation; but the government engages in this kind of manipulation all the time anyway.
No we shouldn't.
If we want to subsidize a set of foods; well why not just do that. A subsidy also will not limit you to 15%; it will not complicate a very simple tax.
We can get the effect we want in a more targeted and logical manner. We can also target any subsidy at NZ producers and make our locally produced foods more competitive against imported produce.
Flat taxes are regressive and generally bad; but making a bad tax worse by adding carve outs will not give us the outcome we really want.
Dude. Hiting that nail on the head with a full swing there. If the government wants to help people at the low end of the economy buy food then... Do That! Use targeted subsidies to promote cheaper food.
The economy isnt some Rube Goldberg Machine that you can reliably judge your effect on. If you want to affect a thing in the economy you are often far more effective directly affecting it.
I have mixed emotions over all this.
To start, I agree, flat taxes are regressive and a bad way to tax people.
However, NZ gets a lot of tourists and GST is an effective way to collect money from them to fund the things they use. You could say just tax them directly, but I think a $1000 entry fee would put off many tourists that otherwise would come here and happily pay that much GST in their spending.
We also have no true capital gains tax. Without this, GST is practically the only way we get tax from the ultra wealthy, right?
So instead we could leave GST alone and provide subsidies to make fresh food cheaper, but that seems to also be making the system more complex by balancing tax collection against subsidies for the same thing, and also creating a whole chain of questions about where the subsidies go. Do we give them to potato farmers that then get pressured for cheaper prices from the duopoly, who don't pass along the full discount and end up subsidising their profits? (This will likely happen with removing GST too, but we won't have to work out which farmers get subsidies and which don't). If we subsidise farmers then we also subsidise overseas consumers that they sell to.
So do we just hand cash to supermarkets to make certain products cheaper? This seems more complex than just removing GST.
I have no view on what's the right thing here because it seems complex and like there might not be a right answer. But I am curious how subsidies would work in practice.
We also have no true capital gains tax. Without this, GST is practically the only way we get tax from the ultra wealthy, right?
This is a major problem with flat taxes; the ultra wealthy pay a tiny portion of said income/wealth in GST; vs the poor who pay a huge portion of their income in GST.
but that seems to also be making the system more complex by balancing tax collection against subsidies for the same thing
Not true; complicating GST, complicates it for all businesses. It adds compliance overhead to everyone; even though it would be minimal extra for most businesses, it is not zero. Not zero multiplied across all businesses is still millions in compliance dead weight cost.
So do we just hand cash to supermarkets to make certain products cheaper? This seems more complex than just removing GST.
A targeted subsidy; could be applied at the producer end, making the bureaucratic overhead much smaller. Thus giving NZ producers a leg up compared to overseas producers.
This isn't as anti-competitive as it first seems either. Since feeding ourselves is a national security concern. It behooves us to prioritize local production, even in the event we have to subsidize production.
When you talk about a targeted subsidy, the farmers would receive this regardless of if their product is sold in NZ or overseas? Or would there be some apportionment of subsidy based on how much is sold locally?
I would make sure it was NZ production into the NZ market.
No produce heading offshore would get subsidised.
Since NZ produces way more food than we consume, how would that work in practice? Are there models for this in other countries we could follow?
The grower/farmer would have to declare where the produce was going.
I'm not sure how much of this is already done, for traceability reasons, but some is done.
Ah yes. Presumably there would be records of exports and records of sales to local retailers (as well as records to e.g. places that can foods), there must currently be enough information recorded to know where food ends up. So probably isn't that much overhead to have this process.
Makes sense.
We also have no true capital gains tax. Without this, GST is practically the only way we get tax from the ultra wealthy, right?
The solution here is for our politicians to collectively grow a pair and pass a capital gains tax, possibly a wealth tax as well.
I've heard a few similar arguments, that go along the lines of X is the next best thing to a capital gains tax, and my response every time is... Why not just enact the tax then?
Honestly, it's embarrassing.
No, land value tax. CGT hits all investments like start ups and enterprise. We want more of that, not less. Investment in land, on the other hand, is strangling the nation. Economically and socially. Land can’t be offshored or hidden in the Seychelles. Tax the shit out of land and watch house prices and rent tumble. It also encourages efficient use of land, meaning we see higher density housing close to industrial hubs. This means more affordable and more efficient public transport, and more people able to live closer to work.
TOP has proposed a 0.75% LVT, as part of their tax policy.
I am dismayed how they continue to poll. Most of their policies seem so common sense. I guess what rules NZ politics now is "will they make my house price go up?"
TOP just don't seem to know how to sell their ideas to the public.
Also, people vote for ideas and personalities, not policy. Policy is boring and almost nobody reads it.
This is true; you have to be able to tell a good story.
It helps if the story teller is charming....but as ACT shows it is not a requirement.
One of TOP's problems is it seems like the party of the highly educated. But their policies are helpful for everyone...they have a communication problem, not a policy problem.
Evidence based policy, as a core principal... Got me very interested., so I vote finds them.
It took the greens a few elections to get in... TOP will get there.
Yes, very good point. "GST is the only way we tax the wealthy" was a very poor argument for keeping GST on my part.
Keeping an open mind is important.
I like hearing ideas that challenge my views.
Keep learning 👍
We went over this at the last election, it's a stupid idea, and the added complexity of the new GST scheme doesn't make this even remotely worthwhile.
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