Tuesday 16 May 2017

E-cigarattes; cultural bias; pluralistic society; and warped incentives

Permit me a little bit of a rant here, but it is actually a very important case study in public policy gone awry, and how vested interests can capture the debate and result in the spread of false and misleading information, and result in policy choices occurring that are utterly irrational. Bear with me, as I believe the read will be worth it if you can persevere to the end, as smoking remains one of the most misunderstood phenomenon among intelligent members of modern day society.

Negative gearing & surging rents: Is Andrew King disingenuous; delusional; or just plain dumb?

The NZ Herald recently reported on the Labour Party's proposal to eliminate negative gearing tax deductions for property investors. The proposal drew fire from NZ Property Investors Federation executive officer Andrew King, who warned that if the policy was introduced, rents would rise sharply, penalizing renters and particularly those trying to save up a deposit for their first home. It was implied that rents could rise by as much as 65% - the degree to which the after-tax cost of providing rental accommodation would rise for landlords absent present-day tax deductions.

While it is standard fare for those with a vested interest in the property market to - shall we say - 'incline towards an optimistic interpretation' of the facts - this sort of scaremongering about rents is something that has always deeply irked me. This line of reasoning is so cynical, and so shamelessly self-interested and false, that I can't resist writing something about it.