Wealth tax wins 64% support — with a $10m threshold and family homes excluded

Summarised by Centrist

Almost two-thirds of respondents support a wealth tax targeting individual net assets above $10 million while exempting family homes, according to new Ipsos polling.

The proposed 2.5% tax attracted 64% support, with 26% opposed and 10% unsure. Those findings relate to that particular combination of rate, threshold and exemption.

Support was lower for other taxes. A capital gains tax on property sales excluding the family home attracted 45% support. Fewer than a quarter supported either a land tax or congestion charging.

Respondents were also divided over their own tax bills: 45% believed they paid the right amount, while 44% wanted to pay less. Just 4% thought they should pay more.

Despite the debate over tax policy, only 8% identified taxation among the country’s top concerns. Cost of living remained the leading worry, followed by healthcare and the economy.

The survey used online research panels to question 1,003 adults between September 3 and 11, with a stated credibility interval of ±3.5 percentage points.

Editor’s note: Is a wealth tax more popular because respondents expect somebody else to pay it? A $10 million threshold and family-home exemption make that a reasonable question, although this poll cannot establish people’s motives. It recalls the old saying: “Don’t tax you, don’t tax me, tax that fellow behind the tree.”

But approving a tax is easier than designing one. How should an annual wealth tax value a privately owned business or the rights to a musician’s songs when neither has a readily quoted market price? Which debts and contingent liabilities would count against those assets? And how would someone meet the bill if their wealth generated little cash?

For people whose income consists entirely of wages and already-taxed investment income, Inland Revenue generally calculates their income tax automatically. A wealth tax would introduce another layer of valuation and compliance for those affected.

Supporters should also explain how their proposal accounts for avoidance, relocation and the possible effects on investment. These are practical questions that a popularity poll cannot answer. The case for a tax should include what it would collect after administrative costs and behavioural changes, not simply how appealing it sounds when someone else receives the bill.

Read more at RNZ

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