Proposal Capital Gains Tax For New Zealand -Myassignmenthelp.Com

Question: Discuss About The Proposal Capital Gains Tax For New Zealand? Answer: Introducation The green economy policy would help in improving the quality of life for the person livings in New Zealanders by building the reputations as the producer of higher value. The clean products would help in sustaining the natural resources and the environment. The green party tax policies is in the direction of creating a fairer and more equal society with the help of strong and progressive system of taxation (Barrett, Veal, 2016). The ultimate objective of the green party is to increase the minimum wages and create an additional state houses. The tax policies of the New Zealand Green Party is to create a productive economy with the help of measures such as the capital gains tax. The green party has the plan of creating jobs that are in the direction of better environment and good for the people with the help of business incentives and direct government investment. The primary objective of the New Zealand Green Party is to reform the system of taxation in order to make sure that every individual would be able to pay less amount of tax with cleaner business environment (Kelsey, 2015). The policies are generally framed to reward the clean businesses and enable the polluters to pay more. All the sources of income under the New Zealand Green Party would be taxed in the similar manner and to ensure that the speculations would not be given any reward in comparison to the genuine creation of wealth. The New Zealand Green Party aims at introducing the tax free threshold limit at the bottom of the income tax scale at the initial stages and then simplifying or reducing the tax rates in the middle brands of the tax scale. The New Zealand Green Party makes sure that the beneficiaries gets the advantage of the proposed changes by passing the tax cuts on those that would benefit and adjusting the abatement rates. To treat all the income on the equal scale, the New Zealand Green Party have introduced the comprehensive capital gains tax on the inflation which is adjusted with the capital gains tax when capital gains is realised (James Maples, 2016). Additionally, the New Zealand Green Party tax policies also provides the family home with the exemptions from capital gains tax. New Zealand Green Party have paid equal considerations to eco-taxes as the policies created looks to empower the central and the regional government by introducing a water levy on the commercial use of the water that is used on the capacity basis (Fletcher, 2015). However, such levy would not be applicable to the households or stocks of drinking water. The tax policies have also begun a phased procedure of reforming the ecological tax by setting up the ecological tax reformation commission to assess the current taxes and probable new eco-taxes. The New Zealand Green Party tax policies would additionally consider levying taxes on the resources such as minerals, commercial catching of fees and numerous forms of pollution and waste. Cannon of Taxation: The cannon of taxation was initially introduced and presented by Adam Smith. The principles of cannon of taxation helps in defining numerous rules and regulations based on which the good system of taxation would be created (Rankin, 2016). Even though this cannon of taxation was bought into the light long time before however it is still used as the foundations of discussion on the principles of taxation. Adam smith has actually bought forward only four cannon of taxation that is commonly regarded as the Main Canons of Taxation or the Adam Smiths Cannon of Taxation. With the passing of time additional cannon were created to meet the needs of the modern world (Fahimnia et al., 2015). Considering the cannon of taxation in context of the New Zealand Green Party policy the key features that is stated in the tax policies are analysed to better understand whether the policies created are in accordance with the cannon of taxation. The first principle of cannon of taxation is deals with the cannon of equity. The term equality in the present context does not represent that every individual should pay the exact amount or the equal amount. However, the actual objective of this cannon is to make sure that the rich people must be paying more amount of tax than the poor people (Churchill, 2016). The reason behind this is that the amount of tax must be in accordance with the abilities of the taxpayer. The cannon of equity is regarded as one of the fundamental concepts to implement the social equity in the nation. The New Zealand Green Party has introduced a bill that promotes equal payment for all the women. The equal pay amendment bill has been passed by the New Zealand Green Party for lending support to the equal payment of tax for all the women. The New Zealand Green Party asserts that it is the time for the parliament to make the real changes for the women living in New Zealand to support the equal pay amendment bill for promoting transparency. This bill promotes cannon of equality as it would require all the employees to gather the information regarding the amount the men and women are required to pay (Hellwig McAllister, 2017). With the help of this bill it would become easier to locate where there would be discrimination. Ascertaining transparency around the pay would enable an easy way of making sure that the women get paid equally and this bill would make the cannon of equality a reality. In New Zealand women work hard each and every day and it is necessary to promote equality of pay. The cannon of certainty makes sure that the taxpayers must be well aware regarding the purpose, amount and the method of paying tax. The cannon of certainty makes sure that the taxpayer must be clear, simple and absolutely certain regarding the benefit of the taxpayer. There are more than 120 public electric vehicles with charging stations in New Zealand (Baker et al., 2016). The policies of Green Party already make up $10 million investment in supporting the development. In regard to the cannon of certainty the exemption provided to the public transport passes is long lasting. As a result of this there is a very little amount of cost that is associated with this and because of this the number of business that are presently providing free public transport will be certainly subjected to lower fringe benefit tax. The taxpayers know the exemption relating to the electric vehicles for a period of seven years. However, the cost varies based on the certainty of the policy implementations (James et al., 2015). An increase in one percent rate would ultimately lower the amount of tax revenue received by $4.77 million in the initial year. In the seventh and the final year of the policy implementation the taxpayer would be certain regarding the lowering of the amount of tax. The cannon of certainty assures that the taxpayer will be having the complete knowledge regarding the tax payment that includes the amount to be paid. Noteworthy of the fact it is understood that on non-presence of the cannon of certainty it might result in tax evasion. The cannon of convenience is regarded as another cannon of taxation suggested by Adam Smith. In the words of Dodson (2017), cannon of convenience is regarded as the extension of the cannon of certainty. The cannon of certainty ensures that the taxpayers must be aware regarding the amount, method and mode of paying the tax. The cannon of convenience defines that the method must be easy, convenient and should be friendly in nature. The Green Party promotes cannon of convenience by stating that the new plan of changing the work for families in the work tax credit. Such kind of changes helps in providing convenience to the taxpayers as this reduces the bottom tax rate from 10.5% to 9% for any individual that is earning the income of less than $14,000 (Barrett et al., 2015). On the other individuals that are earning greater than $150,000 yearly would experience a rise in their tax rate from 33% to the 40%. The cannon of convenience includes that there will be capital gains tax with initial amount of $10,000 earned on annual basis would remain tax free. To further promote convenience the top braced of tax is lowered to yearly income of $80,001 or more. In the direction of promoting convenience a there is an introduction on levy on water that is used for the commercial purpose as well. The green party ensures that the time and manner of the payment of tax should be convenient to suit the needs of the taxpayers in order to ensure that the individual taxpayer is better able to pay the taxes in the required amount of time (Barrett Veal, 2016). An important consideration in this regard is that the time and method of payment must be convenient, if the same is not created to suit the needs of the taxpayers then there could be a tax evasion and corruptions. To better promote the convenience, it is not unreasonable to begin introducing the lower amount of corporate tax for the resident organizations as this forms the way of identifying the profit of the companies that are owned in New Zealand and they are generally taxed in New Zealand. Given that the New Zealand owned organizations are taxed at the lower corporate rate tax this would provide the taxpayers with the convenience which can be reinvested in the local economy (Kelsey, 2015). Such kind of tax proposals would enable business to pay lower amount of corporate tax rate. The Green Party would provide business with the incentives in order to purchase the electric vehicle by ensuring that the electrical vehicles are exempted from the fringe benefit tax. Reduction in the cost of electric vehicles would ultimately help in incentivising the business of greater number of electric vehicles. In addition to this Clean Transport Fringe Benefit Exclusion would increase the demand for the electrical vehicles and their charging infrastructure (James Maples, 2016). Additionally, the cannon of economy better promoted by the Green Party with the help of second hand market for the electrical cars in the coming years which would ultimately help the business in replacing the fuel oriented car. The green party would additionally incentivise the business by providing their employees with the public transport passes to travel to and from work. The electrical cars is regarded as the important portion of the solution to the problems of pollution. Additionally, pollution from the transport makes around 20 percent of the New Zealands greenhouse gases release with road means of transportation causing around 90% of the pollution. On a regular basis the green party has bought forward the government must replace the fuel oriented cars with the electrical cars. Additionally, to promote the cannon of economy both the business and the government can change the fuel cars to the electric cars altogether (Fletcher, 2015). The green party promotes the cannon of economy as it believes that the national parks, rivers, beaches and wildlife forms the part of tourism. The levy on tourism with small amount of contribution paid by the international visitors would ultimately bring millions of dollars in the government fund to assist in protection of the environment for more number of generations. There must be any form of leakage in the process of collections. Green Party in this manner would ensure that a large number of collections would go in the direction of treasury. Therefore, such funds would be spent in the projects of government for the welfare of the environmental protection, country and the inhabitants (Rankin, 201 6). More specifically if the cannon of economy is not applied then the overall cost involved in the collection of taxation is unreasonably higher and the collected amount would become insufficient in promoting such plans. Depreciation Under Diminishing Method: Diminishing Value Depreciation Rate Opening Date Closing Date Original Cost Depreciation Rate Depreciation Claimed Adjusted Tax Value Grading Machinary 01-04-2017 08-02-2018 35000 13% 2452.54 22000 Fruit Press 01-04-2017 31-03-2018 8000 10% 718.02 7200 Dishwasher 01-04-2017 28-10-2017 2000 20% 184.10 1600 Crates 01-04-2017 31-03-2018 2200 40% 299.17 750 Cretes New 15-10-2017 31-03-2018 700 40% 128.10 700 Fridge 01-04-2017 30-11-2017 700 16% 37.28 350 Food Processor 15-06-2017 31-03-2018 325 13% 33.45 325 Computer 20-06-2017 31-03-2018 2000 50% 778.08 2000 Peelers 15-08-2017 31-03-2018 3160 13% 256.60 3160 Total 4887.39 38085 Depreciation Under Straight Line Method: Straight Line Depreciation Opening Date Closing Date Original Cost Depreciation Rate Depreciation Claimed Adjusted Tax Value Grading Machinary 01-04-2017 08-02-2018 35000 8.5% 1603.58 22000 Fruit Press 01-04-2017 31-03-2018 8000 7.0% 502.61 7200 Dishwasher 01-04-2017 28-10-2017 2000 13.5% 124.27 1600 Crates 01-04-2017 31-03-2018 2200 30.0% 224.38 750 Cretes New 15-10-2017 31-03-2018 700 40% 128.10 700 Fridge 01-04-2017 30-11-2017 700 10.5% 24.46 350 Food Processor 15-06-2017 31-03-2018 325 8.5% 21.87 325 Computer 20-06-2017 31-03-2018 2000 40.0% 622.46 2000 Peelers 15-08-2017 31-03-2018 3160 8.5% 167.78 3160 Total 3419.563493 38085 As evident from the above stated computations an assertion can be bought forward by stating that the depreciation that is computed provides that John and Maria can claim an allowable deduction under the diminishing value method. The diminishing value method provides that the computations of depreciation is derived by subtracting the constant amount of item under the adjusted tax value. The amount of depreciation charged is higher under the diminishing value method which would enable the taxpayer to claim higher amount of deductions and thereby reducing the tax liability. Reference List: Baker, T., Cook, I. R., McCann, E., Temenos, C., Ward, K. (2016). Policies on the move: The transatlantic travels of Tax Increment Financing.Annals of the American Association of Geographers,106(2), 459-469. Barrett, J. M., Veal, J. A. (2016). Tax Rationality, Politics, and Media Spin: A Case Study of the Failed Car Park TaxProposal. Barrett, P., Kurian, P., Wright, J. (2015). Environmental Security and the Contradictory Politics of New Zealands Climate Change Policies in the Pacific.Environmental Security in the Asia-Pacific, 157. Churchill, J. (2016). Emissions Trading Schemes and Carbon Taxes: Reinvestigating the Policy Tools New Zealand Uses to Address Climate Change. Dodson, K. (2017). Economic Change and Class Conflict over Tax Attitudes: Evidence from Nine Advanced Capitalist Democracies.Social Forces,95(4), 1509-1538. Fahimnia, B., Sarkis, J., Boland, J., Reisi, M., Goh, M. (2015). Policy insights from a green supply chain optimisation model.International Journal of Production Research,53(21), 6522-6533. Fletcher, M. (2015). DEVELOPMENTS IN SOCIAL LEGISLATION AND POLICY IN NEW ZEALAND. Hellwig, T., McAllister, I. (2017). The impact of economic assets on party choice in Australia.Journal of Elections, Public Opinion and Parties, 1-19. James, S., Maples, A. (2016). The relationship between principles and policy in tax administration: Lessons from the United Kingdom capital gains tax regime with particular reference to a proposal for a capital gains tax for New Zealand.eJournal of Tax Research,14(2), 455. 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