TAX THE RICH? NOT LIKELY!

Even though a new IRD report has highlighted the unfairness of our taxation system it is unlikely we'll see any changes anytime soon. The rich have nothing to worry about.

NEWSTALK ZB's Heather Du Plessis Allan declared on Wednesday that the Inland Revenue's newly released report on taxation represented the Labours Government 'softening' the public for new taxation measures.

'There’s a tax coming, there’s definitely a tax coming,' she confidently declared. She added that she 'guessed' that Labour would be 'proposing a tax at the election. And the tax would be on the ultra-wealthy.'

Prime Minister Chris Hipkins did not exactly refute Du Plessis Allan's argument the next day. While he told the Auckland business sector that there would be no new taxes in the Budget, he had nothing to say about what kind of tax policy would be contained in Labour's election manifesto.

But given his guarded response to the Inland Revenue report its unlikely that Labour is about to tip over the taxation applecart anytime soon. Heather Du Plessis Allan can rest easy.

Economist Shamubeel Eaqub has suggested that a concerted PR campaign by the corporate sector and its allies will ensure that nothing will change: 'The very wealthy will inevitably mount a strong and co-ordinated opposition, using a wide array of organisations and people. They can afford to do it, and it would be a small cost relative to taxes they may have to pay.'

The same political pressure that saw Prime Minister Jacinda Ardern retreat from introducing a capital gains tax will be applied against her successor. But it does not look like Hipkins will need much 'encouragement' to do nothing.  Bryce Edwards of the Democracy Project observes:

'... it looks like Prime Minister Chris Hipkins will say virtually nothing meaningful about the stark unfairness uncovered in the report. His cautiousness and conservatism, mean that he’s unlikely to reverse Ardern’s prohibition on even discussing wealth taxes.

By conceding the taxation debate to vested interests, this will ensure that New Zealand continues to have a largely regressive taxation system – one in which the poor subsidise the rich, much like the days of the Sheriff of Nottingham. Sadly, we don’t appear to have any Robin Hoods to intervene in what is essentially a class war.'

And while Bryce Edwards writes that we 'it’s time for the politicians to be bolder on what they really think is needed' we're not likely to see any of that boldness from within the ranks of the Labour Government itself. 

There are no Robin Hoods among Labour's many MP's. This is despite several of them declaring themselves to be socialists. In 2021 Wairarapa MP Kieran McAnulty, New Lynn MP Deborah Russell and Tukituki MP Anna Lorck all declared themselves to be loyal to the socialist cause. Christchurch Central MP Duncan Webb proudly piped up in Parliament that 'There's so many of us great socialists on this side of the House'. 

But none of these 'great socialists' seem to think it is necessary to campaign for a fairer taxation system that helps to address New Zealand's chronic inequality. Dissent from the political status quo is hard to find. The uncritical loyalty that Labour MP's display for their leader is something that the totalitarian Chinese Communist Party would be impressed with.

In 2021 socialist US congresswoman Alexandria Ocasio-Cortez ruffled a few feathers - among both liberals and conservatives - when she showed up at the swanky New York Met Ball wearing a white gown with the words 'Tax the Rich' in red letters splashed across her back. 

She later wrote: 'we all had a conversation about taxing the rich in front of the very people who lobby against it and punctured the fourth wall of excess and spectacle....The time is now for childcare, healthcare and climate action for all. Tax the rich'.

Bryce Edwards writes that we 'it’s time for the politicians to be bolder on what they really think is needed'. But we sorely lack the politicians of the calibre of AOC who are not only committed to something other than the economic and political status quo but are prepared to stand up for what they believe. A progressive tax platform is necessary to curb the social and political power of the rich but we lack the representatives with either the political conviction or the will to campaign for the necessary changes. While the Green Party might support changes to our taxation system its continued loyalty to Labour means it has little to offer but empty rhetoric.

Interestingly a TVNZ poll taken shortly before the 2020 general election indicated that fifty-nine per cent of those surveyed thought the wealthy should pay more in taxes...