Title: Capital Gains Tax: Good for LGBT Communities Credit: Craig Young Comment Thursday 27th October 2011 - 10:19am1319663940 Article: 10973 Rights
In July, Labour mooted a capital gains tax in preference to the Key administration's plan for asset sales should they be re-elected. I believe that our communities should support the capital gains tax proposal. I must say, I'm surprised that National and ACT's lesbian and gay supporters haven't tried to defend their party's preferred policy options within this debate. If they were to do so during the next two months of the election campaign, I suspect that they would argue that 'we' earn 'more' than straight wage and salary earners and would thus 'suffer' were a capital gains tax to be introduced. But what are the premises of this argument, and do they withstand detailed scrutiny? No. What is a Capital Gains Tax? It is charged on capital gains, which refer to profits from other than 'core' assets like family homes. Other forms of property, stocks, bonds and precious metals are particularly subject to overseas equivalents of the proposed scheme. When it comes to the stock market overseas, there have been debates, given taht assets are also subject to earlier forms of company tax payment to central government. Apart from Singapore, Argentina and the Netherlands, traditional tax havens and less developed economies tend to be the ones that lack a capital gains tax- Belize, the Cayman Islands, Barbadoes, Ecuador, Estonia, Hong Kong, Iran, the Isle of Man and Jamaica also lack CGTs. However, apart from Estonia, most of the rest of the European Union does have some form og CGT, as do Australia, Brazil, Canada, China, South Africa, the Philippines, Israel, Japan, Mexico and the United States. As Phil Goff described it in his policy announcement, most New Zealanders will be exempt from CGT payment, as the first five thousand dollars of profits earned from taxed assets won't be, it will not apply to the family home, and payers will only be charged fifteen percent of the profits gained from capital gains. In addition, Labour proposes that Christchurch and other Canterbury Earthquake Relief Authority Zone properties will be exempt from CGT application for the next five years. This seems a fair and equitable taxation policy. Why might some LGBT voters blanch from it? To be frank, it is based on the mythology of the 'pink dollar'. This argues that as 'we' are 'childless,' we' don't forego employment mobility opportunities and 'don't' have associated family rearing costs, so 'we' climb faster up the organisational and corporate ladder and 'have' more disposable income. This flawed perception is based on unselective magazine readership demographics from the United States and should not be misapplied to any further contexts than marketing to the readership of said publications. Mary V.Lee Badgett (US) and Victoria University lesbian economist Prue Hyman have disproven this myth. As Prue Hyman's census data analysis showed a decade ago, actual examination of more detailed and holistic census data suggests a very different picture, as one might guess. Lesbians do earn more than straight women, but gay men earn less than straight men of equivalent age cohorts. This suggests that internal homophobia still plays a role within organisational and corporate cultures, affecting entry interviews, recruitment, promotion and probably unfair dismissal, although this requires more detailed investigation. Much depends on the occupation and whether the organisation's human resoure management sections are committed to anti-homophobia initiatives. Parental responsibilities also impact lesbians and gay men, as we take such responsibilities seriously, so there is an internal community income gap between singletons and parents within our communities. However, it also implies that we would not 'suffer' if we voted for a capital gains tax. For those interested in international perspectives, Mary V.Lee Badgett and Jeff Frank have edited a usefully detailed analysis of what we face. As for the transgender communities, they face especial challenges, given that gender identity discrimination isn't explicitly recognised within New Zealand anti-discrimination laws as yet, so they are likelier to face strongereducational and employment disruptions, compounding any existing negative impacts from class and ethnicity in their personal lives. Self-employedor professional transwomen might do better than those who come out earlier. However,the benchmark study is Roberta Perkins' Transgender Lifestyles and HIV/AIDS Risk, which occurred before the advent of trans-inclusive anti-discrimination laws in Australia across all states and territories over the lastfifteen years. A capital gains tax would tax income received from sources other than core home assets and would probably raise more government revenue. Obviously, much would need to be spent on government debt relief to overseas financial institutions and governments, but there would also be opportunities for greater investment in public sector capacity and community welfare and health organisation funding assistance. This is good news for LGBT public sector employees and community service clients. By contrast, what would further privatisation/ state asset sales do? Some sectors of the electoratre seem to have experienced economic amnesia when it comes to the privatisations of the late eighties, which occurred after the 1987 stock market crash and led to 'fire sales' of undervalued privatised assets. Granted, the Key administration would secure a temporary windfall from the sales, but there is no guarantee that the privatised assets would be valued properly and moreover, the government would also forego any dividend that would occur should the assets not be privatised. "Tax cuts" were supposed to provide an economic stimulus, but didn't do so, and unemployment has doubled during the tenure of this government. Can we be sure that the asset sale process would be handled properly were the current government to be entrusted with a further term of office and an absolute majority? It will be interesting to see any televised debate that occurs between Treasurer Bill English, Opposition finance spokesperson David Cunliffe (and hopefully, Greens co-leader Russell Norman, given the fact that the Greens will probably be Labour's coalition partner and are now our third largest party). Strangely, given his past as New Zealand Reserve Bank Governor, Don Brash has kept mostly silent about the relative merits of capital gains taxes or asset sales. However, I don't intend to do so. The available evidence suggests that Labour's capital gain tax is a better option than asset sales. We need to remember that, come the November elections, and vote for Labour or the Greens on that basis, amongst others. Recommended: Mary V.L Badgett: Money, Myths and Change: The Economic Lives of Lesbians and Gay Men: Chicago: University of Chicago Press: 2001. Mary V L Badgett and Jeff Frank(eds) Sexual Orientation Discrimination: An International Perspective: New York/London: Routledge: 2007. Prue Hyman: "Lesbians and Gay Men: Flirting With/Disengaging From Vital Statistics: Same-Sex Relationships and the New Zealand Census: 1971-2001:" in Alison Laurie and Linda Evans (ed) Outlines: Lesbian and Gay Histories of New Zealand: Wellington: LAGANZ: 2003. Roberta Perkins: Transgender Lifestyles and HIV/AIDS Risk: Sydney: Australian Federation of AIDS Organisations: 1994. Phil Goff: "Labour's promise: We'll own our own future" New Zealand Labour Party: 14.07.2011:’s-promise-we’ll-own-our-own-future Craig Young - 27th October 2011    
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