Originally Posted by
davflaws
The way I understand it from Michael Cullen's explanation is that they are widening the definition of income to include income derived from capital. The following illustration is simplistic - but I can't see what is wrong with it - either in theory or in practice. Allan is in IT. His salary is $100k. Bryan is a semi retired accountant. His Personal Drawings from his small practice are $50k and his shares and bonds provide dividends and interest totalling $50k.
A fair tax system would see Allan and Bryan paying the same tax.
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