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
4 comments:
I’m against a cgt.
As an Aussie where cgt exists on everything other than the family home (shares/property etc) and the cgt is 48%…there are so many ways around it, so many loopholes and deductions that the reality is so different. Plus you get to include your capital losses.
The tax really seems to exist to keep the accountants employed.
In the words of Kerry packer “I pay a bunch of people a fortune to use every law you people create to pay as little tax as possible because look at how you spend it”!
(Paraphrasing)
Our taxes aren’t spent on roads, education and health- they’re shovelled into treaty settlements, funding for tvnz and propping up Māori charities like John tamihere to the tune of billions every year!!
Why would any mug in this country support a tax that just continues to transfer what little wealth is left here into elite iwi coffers? And if that tax comes into effect here then I will pack up my wealth and go back to Australia (where I can use the hundreds of legal loopholes to get around it) and pay the accountants- because paying accountants is more productive for the health of the economy than shoveling money at the tamihere empire.
One of the fallacies surrounding a CGT is that it represents a "tax on the wealthy".
The fallacy overlooks the fact that when taxed, the wealthy simply pass the burden of the tax onto poor people.
For instance, a CGT on investment properties translates into higher rents for tenants already struggling to make ends meet on what the landlord doesn't take.
Barend’s comment above ignores the fact that we are in a market economy therefore rents are by and large set at the price the market is willing to bear. So “passing on the costs” is an aspirational statement; you can only pass on costs if someone is willing to pay for them.
Rents are subject to a variety of market forces. A CGT on investment properties is just one of them. As for people being willing to pay, I doubt whether any tenants are 'willing' to pay extortionate rents (which they are with or without a GGT) but everyone needs somewhere to live.
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