The Greens wealth tax

[king1]

So you're all frothing at the thought of more money being taken from "the rich" to be given to you...and yet they're the greedy ones?

Also, the Green's policy is poorly thought out and the policy document is written either by people that don't actually understand how the tax system works or they're being deliberately dishonest and misleading; I suspect its probably a combination of the two.

People have this idea that trusts are only used by "rich people" to dodge tax, when that just isn't true for so many people who set one up. For almost all of my many clients who have trusts, any tax benefit (and often there isn't any) is a secondary "bonus" rather than the reason for having a trust. And yet they would all be hammered by the proposed 1.5% trusts tax despite many being on pretty modest incomes. By way of an example, one client is on a salary of $90K and has her own home in a trust to keep it out of relationship property (why should any guy she lives with for 3years get half of it when he never put a cent towards its purchase). Under the Green's tax policy, her annual tax bill would increase from the current $20k she pays up to $45K! And there are plenty more like her.

Trusts are a vehicle that wealthy have used for decades to hide their wealth, of course it is going to be targeted. As someone in the industry you probably shouldn't be surprised by this, although I do understand a policy like this might directly affect your business, so your position is probably understandable....

I would think the issue most ordinary New Zealanders have is that the wealthy are not paying their fair share of tax in NZ period - from what I read in the news it would seem a lot of the wealthy New Zealanders don't think they are either...  

But personally I don't think you will find too many people here or elsewhere feeling sorry for someone with say a 1.5M dollar property in a trust whose tax bill goes up by $25,000.  I presume she is making a bit of money off that asset in order to have a tax liability?   Is it not simply a cost of ownership and doing business?