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Morgan party tax plan revealed

NZN 6/12/2016 Fiona Rotherham

Gareth Morgan's new Opportunities Party has been released its first policy - a tax on equity to make the revenue system fairer.

The tax policy, which matches the content of a Morgan Foundation report on tax released in April, proposes deeming a minimum rate of return on all productive assets, including housing and land.

Those that already declare at least that level of income will be unaffected and those that don't will pay more, the party's tax policy statement said.

It said about 80 per cent of adults will be either unaffected or pay less tax as a result of the suggested tax reform and 20 per cent would pay more.

"But don't fret, we can afford it," said Dr Morgan. "I will pay considerably more tax, so will John Key."

It would mean people could be taxed for owning the house they live in or even for an expensive car.

Overall, the fledgling party's package would be tax neutral, with every additional tax dollar collected given back via income tax cuts, it said.

Dr Morgan said there's a big pool of untaxed income represented by the benefits derived from the equity people have in their houses and other wealth they've accumulated yet that wealth produces no or very little taxable income.

It isn't a capital gains tax, he said. "It's much more efficient and fair than that."

The policy suggests stepping the required minimum taxable earnings rate up over a few years so asset owners have time to adjust and allowing pensioners who own their homes to pay the tax via a mortgage with the Inland Revenue Department, payable on a change of ownership.

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