Capital Gains Tax

[fungus pudding]

Why should increase in wealth from entrepreneurship be subject to tax? Personally, I think that is exactly the wrong thing to tax.

Because like it or not - it is income. The American system allows you to sell and as long as you buy an replacement asset within 12 months there is no CGT to pay. Only when you finally cash out (if ever) do you pay CGT. That's pretty hard to argue with.

[fungus pudding]

If I take a bare piece of land and develop it so that it now has a motel on it. Well, fair enough, the Government takes a cut from here to eternity of the income that new asset produces. But the new value that has been created, why give a chunk of that to the buggars as well? It is the same as building up any business and creating value and income streams. Society and the Gorvenment benefits and can tax the income stream. But taxing people for creating wealth, I do not get.

And if developing motels is how you make your living ..there is no valid reason why you should be any less liable for tax than a plumber or nurse. The problem with the line drawing rules currently is that as long as you had a bit of income from some other activity you had a good chance of not paying tax on gains from your property activities. One day this will change, but not in the foreseeable future. Labour has now made certain that National wll oppose CGT so it will take a few elections before Nats can introduce it. It will also take a leadership change and a few elections before Labour can stop waffling about what they will do, because they know they won't have to put it into practice. Seems like they've learnt a trick or two from Winston First.