Capital Gains Tax

[Halebop]

I think some form of capital gains tax would be fair - particularly if it also resulted in lower income taxes* (I think a flat tax across any form of income and because I'm an egalitarian prick would even consider taxing the family home too - albeit political ramifications would almost certainly preclude this). John Key has suggested CG taxes are complex which is partly true but so is the tax system in its entirety so suspect he is pandering here. I don't like the wealth tax approach and think cashflow is too important a consideration in the investment value mix so taxes should be incurred at sale time, nothwithstanding the consequences on how this impacts asset sale decisions.

The question of inflation is complex as many people suggest capital gains should be cupped by the rate of inflation (or even the risk free rate of return). But by the same note, income taxes are often allowed to creep up the progressive scale so are not always effectively indexed against inflation. What happens in one should happen in the other.

* Suspect investors have something to gain from lower income taxes anyway as a share of income increases will find their way into company coffers.

[fungus pudding]

I think some form of capital gains tax would be fair -

If properly implemented it would be fair. No doubt about that. The problem as I see it is many prop. investors, traders, businesses and developers are subject to income tax already on capital gained. If a separate CGT tax was introduced, would they pay both? If not - which one would they pay? Or would it still remain a matter of intention? Where would the line be drawn?