The Green Party have just announced a wealth tax – 1% annually on net worth above $1 million, and 2% above $2 million – as part of their Poverty Action Plan.
I’m very pleased to see this tax announced, as it follows substantially the recommendations made in my paper earlier this year for Tax Justice Aotearoa. In particular, it’s pleasing that there are no exemptions for certain kinds of wealth – business assets, for instance, or KiwiSaver – as it is the riddling of such taxes with exemptions that has hampered them in other countries and paved the way for their removal.
Such a tax is unlikely to become a reality in its proposed form; even if the Greens and Labour were in a position to form a government after September’s election, it would undoubtedly be made less radical by the larger party. But it has great merit, focuses debate on inequality, and enlarges the public’s sense of what is possible.
Full details of the Plan, including the wealth tax, are available here.