The NZ Herald is reporting that Bill English, Minister of Finance Fraud wants to change property tax laws (translation: the government wants to steal more money). The article says in part…
[English said] “We haven’t had those put to us yet, but I think the evidence that investment patterns in New Zealand could be more productive I think is pretty strong.”
Those advocating change argue that investment is being funnelled into unproductive parts of the economy, such as investment properties. [Is anyone other than the government saying this? Beware of unsubstantiated statements like this one]
What arrogant nonsense. People only funnel money into “unproductive parts of the economy” when the government forces them to: if people make a poor investment their diminishing wealth tells them that they’ve done so and they quit. That’s one of the signals that people receive in a free market.
What’s really happening here is that the state doesn’t like people putting money into investment properties, so it’s going to slap on extra taxes and make that part of the economy ”unproductive”. That is how the state interferes with the free market and fouls up the signals.
If we had a true free market (i.e. zero state interference) we’d know which parts of the economy were truly unproductive: they’d be the parts that everyone was pulling their money out of. Snap quiz: how many people would throw money at the government if they didn’t have to?
It’s more than a bit rich when the government, the parasite that sucks away more than 45% of your wealth, starts blathering on about unproductive parts of the economy. Pot, meet Kettle.