Sir Stephen Tindall among 83 millionaires wanting to raise taxes for the wealthy

Tuesday, 14 July 2020

Businessman and philanthropist Sir Stephen Tindall praises lockdown efforts. Video first published in April.

Businessman and philanthropist Sir Stephen Tindall is among the world's richest people urging governments to raise taxes on the rich, as the world grapples with the economic impact of Covid-19.

Tindall is one of 83 millionaires who signed an open letter which said “today, we, the undersigned millionaires, ask our governments to raise taxes on people like us. Immediately. Substantially. Permanently”.

'As Covid-19 strikes the world, millionaires like us have a critical role to play in healing our world,' it says.

“So please. Tax us. Tax us. Tax us. It is the right choice. It is the only choice.”

* Property investment, tax systems help propel super rich to greater wealth

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The Warehouse founder, investor and philanthropist Sir Stephen Tindall is urging higher taxes for the world's wealthy.

The letter says: 'No, we are not the ones caring for the sick in intensive care wards. We are not driving the ambulances that will bring the ill to hospitals. We are not restocking grocery store shelves or delivering food door to door.”

'But we do have money, lots of it. Money that is desperately needed now and will continue to be needed in the years ahead, as our world recovers from this crisis.'

The group included Ben and Jerry’s ice cream co-founder Jerry Greenfield and Disney heir Abigail Disney.

The group warned the economic impact would 'last for decades' and could push more than half a billion people into poverty.

'Government leaders must take the responsibility for raising the funds we need and spending them fairly,' the letter says.

Infometrics senior economist Brad Olsen says the wealthy had many avenues to get richer and change their tax obligations.

“The problems caused by, and revealed by, Covid-19 can’t be solved with charity, no matter how generous. Government leaders must take the responsibility for raising the funds we need and spending them fairly. We can ensure we adequately fund our health systems, schools, and security through a permanent tax increase on the wealthiest people on the planet, people like us.

“We owe a huge debt to the people working on the frontlines of this global battle. Most essential workers are grossly underpaid for the burden they carry. At the vanguard of this fight are our health care workers, 70 percent of whom are women. They confront the deadly virus each day at work, while bearing the majority of responsibility for unpaid work at home. The risks these brave people willingly embrace every day in order to care for the rest of us requires us to establish a new, real commitment to each other and to what really matters.

“Our interconnectedness has never been more clear. We must rebalance our world before it is too late. There will not be another chance to get this right.

“Unlike tens of millions of people around the world, we do not have to worry about losing our jobs, our homes, or our ability to support our families. We are not fighting on the frontlines of this emergency and we are much less likely to be its victims.”

Tindall declined an interview with Stuff to discuss the letter.

Infometrics senior economist Brad Olsen said the big questions were – what the rich would be willing to pay, and what on what type of tax.

“Those with greater means often find greater ways to change their tax obligations,” Olsen said.

“The wealthy not only have more avenues to pay tax but also to avoid paying tax. They may be happy to pay more tax but are they also going to shift their money into different places to avoid that tax as has already happened.”

Inland Revenue data shows the median wage for New Zealanders is about $52,000 a year.

The Green Party proposed a wealth tax last month, that would guarantee a weekly income of at least $325, paid for by a wealth tax on millionaires and two new income tax brackets on high-earners.

But Olsen said the administrative issue of wealth tax was quite difficult, and the criteria to determine an individual’s wealth was “ripe for interpretation”.

“There has been talk of changes to income tax which is one of the easiest to change in terms of administrative burden. But the risk is that you do change people's behaviours quite considerably when you tinker with income tax,” he said.

The median wage for New Zealanders was about $52,000 a year Inland Revenue data showed.

There were 305,000 New Zealand individuals worth more than a net $1 million – of those, 175,000 are worth more than $1.5m.

New Zealand also had a handful of billionaires, including the country’s richest man Graeme Hart was worth more than $6.98 billion, according to Bloomberg's Billionaire index and Sir Robert Jones was New Zealand's newest billionaire, with an estimated net worth of about $1b.

Stats NZ data showed to be in the top 1 per cent on an individual level in New Zealand, you needed to have assets of $3.89 million. To be in the top 5 per cent, you needed to clear $1.4m.

On a household level, you became part of the 1 per cent with combined assets of $7.8m. A top 5 per cent household needed $2.83m.

Olsen said a land tax could assist with New Zealand’s housing issue as it would put a price on under-utilised land, and push people to use land more efficiently.

But he said the political will was not there.

“If we can't get anywhere near a capital gains tax, I don't think a land tax is going to magically make an appearance on the political stage.”

The government abandoned plans to impose a capital gains tax last year.