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View Poll Results: Should there be a Capital Gains Tax on Property

Voters
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  • No

    213 100.00%
  • Yes

    74 56.49%
  • Goff is just an idiot

    2,147,483,658 100.00%
  • Epic fail for Labour

    1,935 100.00%
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  1. #51
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    Quote Originally Posted by Halebop View Post
    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?

  2. #52
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    Quote Originally Posted by biscuit View Post
    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.

  3. #53
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    Quote Originally Posted by biscuit View Post
    Why should increase in wealth from entrepreneurship be subject to tax?
    Mark Ellis and Stefan apparently turned a $140k investment into $18m each. Why shouldnt that be taxed?

    Would they still have done what they did if they had to pay $2.7m in tax. Off course they would (the remaining $15m would do).
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  4. #54
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    Quote Originally Posted by biscuit View Post
    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.

  5. #55
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    Quote Originally Posted by biscuit View Post
    Who are you to say that?

    Once you go down this path, the logical conclusion is that at the end of the year, everyone's wealth should be assessed and a tax bill paid on the increase, regardless of cashflow.
    Definitely not. I dont agree with any tax that isn't on a realised basis. And I also would prefer roll over relief. I see how that works for property (buy a new property) but not exactly sure with shares.

    I also would only vote for it if it was in conjunction with reduction in income tax rates - something I dont trust Labour with.

    I dont have all the answers but dont think it should be ruled out.

    Note: I will still be vote right.
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  6. #56
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    Quote Originally Posted by belgarion View Post
    This old gem again. A shame its not actually true.
    Tax on income of 35,000 = $5,000

    Tax on income of 70,000 = $14,000

    Tax on income of 140,000 = $37,000

    Fairly obvious that higher incomes pay dispropotionately more. Only a flat tax would have them paying proportionately more.

  7. #57
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    Fungus Pudding be careful what you wish for The flat tax could be 100% & the state would give you a living allowance
    Possum The Cat

  8. #58
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    Quote Originally Posted by belgarion View Post
    FP, Sorry I didn't make myself very clear. I was not referring to wage slaves that have no other investments and are stuck paying PAYE. I was referring to the majority who earn over $150k from many more than once source and how they ensure they are taxed on far lower incomes. E.g. a friend who earns a salary of 180K and yet pays tax each year on about 32k. This is a high capital worth individual who will get caught by the CGT. He's remarkly sanguine about the whole CGT issue as well.
    There's something missing from that info. If he is making gains regularly through transactions of any kind, those gains will be subject to income tax. So he's not declaring it which is a dangerous game, or he's winding you up. (High capital worth is irrelevant. It's income we are taxed on)

  9. #59
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    Quote Originally Posted by biscuit View Post
    I think that is a separate issue and needs to be addressed specifically. We all know that that commonly involves using negative gearing losses to offset other incomes.
    I think that is the issue. Belgarion's friend is making very little income due I assume to borrowing to invest. If he invests well any gains will be tax free. Good on him to for taking the risks and getting the returns.

    The issue is, why is the return from his efforts earning income being taxed but the capital gain portion of his investing efforts remain untaxed. Is it harder working 9 to 5 or holding an asset that is increasing in value by 5%-20% per year. We tax income and consumption why not wealth? In fact wouldn't the wealthier we become mean we are in a better position to contribute to society.

    Another important election issue is how are they going to spend our tax dollars. I don't mind paying for a lot of what the government spends our tax dollars on e.g.hospitals, schools, police, national super etc. But surely there are areas where spending can be cut to reduce the deficit instead of increasing taxes. I guess we will all vote for whatever is in our own best interest but I hope we aren't all knowingly being bribed by the politicians leaving our kids to pay the bill later.
    Last edited by Aaron; 11-07-2011 at 01:43 PM.

  10. #60
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    Quote Originally Posted by biscuit View Post
    Address the specific routes by which people are rorting the system, but leave assets out of the equation
    So ignoring the rate of tax (or assuming any change would be fiscally neutral to the government) what changes would you recommend to broaded the tax base.

    Or do you think the current balance is right, if properly enforced (John Key seems to be suggesting this).
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