David Farrar: ACT’s 10 reasons to oppose a CGT

ACT has listed ten reasons to oppose Labour’s Capital Gains Tax. They are:

1. The rate will increase over time, as income tax has gone from 5% to 39% and GST from 10% to 15%

2. It’s a gift to tax accountants

3. It’s a tall poppy policy

4. It’s double taxation

5. It won’t affect house prices

6. NZ is already taxed highly at 34% of GDP

7. Believe New Zealand is Exceptional

8. A CGT is not inevitable

9. It will affect you in ways you least expect

10. The Greens will force Labour to expand a CGT

I oppose Labour’s CGT, but am not opposed in principle to a CGT if it followed these principles. They are:

1. Revenue Neutrality – there are income tax cuts to compensate

2. Inflation Indexed – tax is on real gains, not just inflation

3. No exceptions – all capital gains are taxed

4. Grandfathering – only assets purchased after the CGT is introduced are tax

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders