Thursday, November 15, 2012

Obama to NZ: I am going to increase your property values

You will need a hermeneutical key to get from this article to the title of the post: raising taxes on the wealthy always sends some of them to new locations where taxes are lower. In the case of wealthy Americans already here in NZ, they buy our land and help property values to reach new heights (a not unwelcome matter, of course, to those who own property). A new stream of US buyers will only push those property prices higher.

In a related note I was fascinated to learn yesterday via an interview of Austen Mitchell on NZ National Radio that Starbucks claims losses in Britain, so pays no taxes. It can claim losses because it sources its coffee from a base in Europe, and that base charges British Starbucks a premium which leads to the losses in Britain while Starbucks the global entity still earns a profit. Ultimately it retains that profit via an island in the Caribbean because if those profits made it to the US they would be taxed. See further here.

Message to Obama, Cameron and co: why not work on a uniform tax regime around the world, including every little island claiming sovereignty? Wouldn't that raise taxes everywhere for the good of all, without exporting wealthy people to places like NZ where we would like our land to be affordable?

As an Anglican might say, such global organisation towards common goals and according to common values just needs an underlying agreement or Covenant.

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