ACT's David Seymour - i like his style.

[mistaTea]

Good point, MT about primary residence. In the US, capital gains tax has to be paid on sale of primary residence (with certain concessions).

But need to be realistic as Australia exempts family home so we will be shooting ourselves in the guts if we tried to implement US capital gain tax regime on family home here!

But there is a crying need to level the playing field out there for the betterment of NZ as an economy & as a society.

What is lacking is political leadership and that lies at the heart of all of NZ’s tax issues.

Yeah, and in truth I am not such an idealogue about a purist CGT that I cannot accept there would need to be some give and take. Some exceptions.

After all, it is pointless to introduce a CGT that the general public hate and feel is too 'radical' because they will just vote in another crowd next time to undo it.

Like all policy, we want any changes to our tax regime to be enduring.

So you probably end up with things like exempting the family home so that we don't spook the horses.

I would just always caution that for the CGT to be effective, you need to have any exemptions to the absolute minimum. Otherwise it becomes a compliance and enforcement nightmare and fails to meet its objectives (effectively and efficiently broadening the tax base).

I also think that any attempts to be 'clever' like Cullen by calling it Capital Income Tax instead of Capital Gain is an absolute no-no. If that were to be implemented, then high salary earners could be paying 39% of their capital gain to the govt. How would that incentivise kiwis to invest in anything other than the family home which would be exempt?

You call it what it is... a gain on capital... and you bring in a nominal tax of, say, 10%. This enables investors to kick some money into the tax tin, while also recognising the risks they take inherent to investing and also the need to ensure people are not turned off making investments in NZ business etc.