Mood of the Boardroom: Greens’ wealth tax ‘too difficult to implement’ (NZ Herald)

An overwhelming number of CEOs — 76 per cent — in the Herald election survey — do not support a wealth tax.

Green co-leader James Shaw has not made a wealth tax a “bottom line” for post-election negotiations, but he has called it a “top priority”.

The Greens’ proposed tax would see those with net assets over $1 million face a 1 per cent annual wealth tax. This would be used to fund a sweeping new welfare policy that would guarantee a weekly income of at least $325. Shaw has said the Greens are prepared to forgo a coalition or confidence and supply arrangement and sit on the cross-benches if post-election talks do not go their way. However Labour Finance Minister Grant Robertson has categorically ruled out  adoption of the Greens’ tax policy.

Nearly a quarter of survey respondents said they would support a wealth tax — with eight per cent saying Yes to the Green policy as proposed; 3 per cent saying Yes but with a five-year sunset clause (as part of the Covid-19 response), and 13 per cent saying Yes, but only at materially higher levels than  proposed. They say the wealth tax seems to be poorly thought through and would be difficult to measure and implement.

“If it is not linked to income or a transaction, where will the money come from to pay the tax?” asks Beca CEO Greg Lowe. “This is an unworkable burden on anybody who owns an asset, including  family homes.”

A similar view from an agricultural boss: “It is a tax on the elderly who have worked to build an asset base but who in retirement may have little cash flow — will they sell their assets to pay the tax?”

Others say it will drive people away from New Zealand and lead to behaviour that will reduce an individual’s tax burden. “It will lead to a flight of capital needed to promote economic growth and prosperity and at the same time reduce the incentives to work,” says one CEO. An infrastructure executive: “All it will do is drive talent and to Australia and discourage wealth creation.”

A food distributor reckons a wealth tax is too difficult to measure and implement. “In reality, wealthier individuals would find ways of protecting their wealth from such taxes, leaving the bulk of the tax burden on middle class taxpayers.”