Capital Gains Tax

[Aaron]

No doubt a CGT would be huge and the effects of introducing one may not be fully appreciated but as long as the reasons behind it are valid I say go for it. The reasons for a CGT would be to broaden the tax base. Reduce tax on labour, hard work and entrepreneurship (except when you sell the business for a capital gain).

Does NZ really want to encourage people with foreign trusts, on the whole they sound like a bunch of rotten, selfish self-centred scumbags should we really be helping them. Let them flee somewhere else.

Foreign capital investing that involves building or improving industry/assets in NZ is no doubt good for the country, not so sure if buying existing businesses and farms and taking the dividend offshore is a good idea or even worse thin capitalisation(see link below).
http://www.stuff.co.nz/business/opin...carpet-rollout

Also came across a bit of history regarding this company while looking for the chalkie article.
http://www.stuff.co.nz/dominion-post...lingtons-power

I don't buy the capital flight threat, worst case scenario income generating assets and land become more affordable to NZers and a declining NZ dollar makes our productive exporters more competitive.

I think you can always put a negative or positive spin on something.

[SBQ]

No doubt a CGT would be huge and the effects of introducing one may not be fully appreciated but as long as the reasons behind it are valid I say go for it. The reasons for a CGT would be to broaden the tax base. Reduce tax on labour, hard work and entrepreneurship (except when you sell the business for a capital gain).

I don't have a problem with CGT in NZ. But I do have a problem when CGT erodes and discourages investment in NZ. Without investments, you lose jobs, it's that simple. If you disadvantage those that have the $, then you will have what many other nations experience, a 'flight of capital' (Brexit is a good example)

Does NZ really want to encourage people with foreign trusts, on the whole they sound like a bunch of rotten, selfish self-centred scumbags should we really be helping them. Let them flee somewhere else.

Foreign capital investing that involves building or improving industry/assets in NZ is no doubt good for the country, not so sure if buying existing businesses and farms and taking the dividend offshore is a good idea or even worse thin capitalisation(see link below).
http://www.stuff.co.nz/business/opin...carpet-rollout

We're not trying to encourage foreign trusts in NZ. What we don't want is to signal the global investments community that NZ is anti-investment and pro-tax. Every OCED nation has foreign trusts laws and it was about time NZ tax laws had aligned to their level. But to talk of a CGT that is not aligned to how other nations treat CGT?

Also you have to stop thinking NZ is a major player in the global scheme. It has no real currency controls so $ can flow freely in and out. When you have something like a CGT that thwarts investment in NZ by foreigners, then it will impact everything. Your Kiwi Saver, your economy, jobs, nothing will escape, and sadly it translates to a lower standard of living. Anotherwords, do you understand how dependent NZ is on foreign trade and investment? Just because farmers can sell more product at lower exchange rates (makes them more competitive), on the other hand you have to import goods that NZ doesn't produce AT THE higher cost (as most trade is based in USD). Also how do you produce an income generating asset in NZ when locals alone don't have the funding? You realise that when the NZ gov't privatised it's assets, a lot of it went to foreign ownership. Ever questioned why?

Also came across a bit of history regarding this company while looking for the chalkie article.
http://www.stuff.co.nz/dominion-post...lingtons-power

I don't buy the capital flight threat, worst case scenario income generating assets and land become more affordable to NZers and a declining NZ dollar makes our productive exporters more competitive.

I think you can always put a negative or positive spin on something.

Again IMO, a very weak NZD is a drop of standard of living in NZ. Again quite simply because NZ is a very small country and is more dependent on international trade than what large nations can simply produce their own products. NZ will never be in that position.

As I said before, tax concessions are nothing new and almost every OCED nation has it. I do not believe it's an excuse that NZ needs to have a simplified tax roll for the sake that "the avg NZ person can't understand what concessions are and who don't believe accountants know what they're doing". It's a poor excuse. Not trying to be anti-CGT. It's just that the world has become a small place and if NZ sends the wrong message, the general population as a whole will suffer.

[Aaron]

It's a poor excuse. Not trying to be anti-CGT. It's just that the world has become a small place and if NZ sends the wrong message, the general population as a whole will suffer.

I don't disagree with all that you say, a lower dollar increases competitiveness and as you point out NZ is more dependent on international trade. A lower dollar is a drop in your standard of living and an increase in the price of imports. I have read economic textbooks that say this. How big a drop might be hard to measure.
I don't think NZ is a major player globally in anything (other than maybe rugby and sailing).

I just don't buy the argument that a CGT will cause capital flight and cause the ruination of our society. If the well-off are threatening the rest of society because their wealth is so great they can destroy a country pandering to them and letting them become even more powerful won't make society any better.

Did you read the example of the wellington electricity lines company above? Do you believe Asian investment in Auckland's housing market has been beneficial to anyone other than those selling up? How much went into new houses compared to existing. I don't know myself but don't see foreign investment as the be all and end all. I may be proven wrong but you will probably be gone long before you get a chance to say I told you so.

[Aaron]

I don't have a problem with CGT in NZ. But I do have a problem when CGT erodes and discourages investment in NZ. Without investments, you lose jobs, it's that simple. If you disadvantage those that have the $, then you will have what many other nations experience, a 'flight of capital' (Brexit is a good example)

I guess the very well off will go where ever they get the best deal.
https://www.msn.com/en-nz/news/world...cid=spartandhp

[SBQ]

I guess the very well off will go where ever they get the best deal.
https://www.msn.com/en-nz/news/world...cid=spartandhp

It's not just the UK. The world is full of places where the rich can choose to reside.
This is what I mean about a slow exodus of capital flight. The gov'ts don't understand the benefit rich people have to their economy.

Look what's happening in NY. Fortunately the US has plenty of other states. In NZ, our NZ1st/Labour coalition needs to understand what motivates the rich to leave?

https://www.marketwatch.com/story/ch...hq2-2019-02-15

The video of Munger says it all. “They’re old. They keep your hospitals busy. They don’t burden your schools, the police department, your prisons. They give a lot. Who wouldn’t want rich people?”

Yet somehow in NZ, if you own a lot of houses or some asset, you're frowned upon and the gov't is just trying to find ways to take that wealth away citing "it's not fair!!!".