Beneficiaries regularly get a bashing from politicians and media alike, but rarely is there any comment on one of the dirty little secrets of the capitalist economy - corporate welfare.
Has ACT's Rodney Hide ever spoken out against business suits ripping off the taxpayer? Has Newstalk ZB's Paul Holmes or Radio Live's John Tamihere ever taken the big stick to business bludgers?
The short answer is a big fat 'no'.
So it comes as no surprise that the usual suspects have ignored new Inland Revenue figures that show that the poor old taxpayer has been subsidising property investors by the tune of nearly $800 million a year.
How is this happening?
Well, property investors - these 'champions of the free market' - are using what are called Loss Attributing Qualifying Companies (LAQCs) to claim tax losses and offset them against personal income.
And this has become a popular pastime among the property investors. The number of LACQ's doubled in the space of four years, largely the result of the recent property 'boom'. In 2007 there were 118,000 LACQs in operation.
Investors using LACQs more than doubled their tax losses in the four years between 2003 and 2007 to over $2 billion.
The use of LACQs has been one of the major reasons for the property investment frenzy of the past six years and subsequently driving house prices to unaffordable levels.
The figures show that the taxpayer is subsidising property investors and others by nearly $800 million.
Last week the Green Party called for the tightening of the rules around LACQs - something that the Labour Government shows no indication of supporting.
Of course the people benefiting from this corporate welfare scheme are the very same people who think the welfare state is a 'brake' on the free market economy.
Don't expect Hide or Tamihere to point out this big hypocrisy though..
Yes, its always interesting to see the few in this country who can see any benefit in change of the tax structure.
ReplyDeleteIn NZ, even to mention the fact that most Countries have an equitable approach to profits made from property, ie read Gains tax, means being cast as a left wing zombie.
One of the reasons Rodney will always fail is that he just doesn't see that the private enterprise model has been goobled up by corporate totalitarianism.