How much would a CGT raise?
July 7th, 2011 at 1:36 pm by David FarrarI’ve blogged at Stuff on how much money might be raised by a capital gains tax on investment property only.
83 Responses to “How much would a CGT raise?”
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July 7th, 2011 at 1:52 pm
Quote from Bruce Sheppard
Vote:“The quantum of property gains derived by NZ taxpayers that potentially have a tax consequence and are never reported would reach quite exceptional proportions. If tracked down they would have the potential to transfer to the rest of us via the IRD much of the wealth of some middle class baby boomers and others.”
http://www.stuff.co.nz/business/blogs/stirring-the-pot/3263551/What-working-for-IRD-taught-me
July 7th, 2011 at 1:54 pm
The answer is dead easy, David. Didn’t need a column. The answer is ZERO.
The proposed CGT tax wlil raise no revenue in at least the first two and probably three years.
Vote:July 7th, 2011 at 1:56 pm
I guess it had to end, but post-hoc congrats on writing such an excellent and even-handed column on Stuff for such an extended period of time.
Vote:July 7th, 2011 at 1:58 pm
“At this stage it is unknown if Labour’s new tax will be on all capital gains or only investment properties. Reports suggest the latter.”
….Or not
Vote:July 7th, 2011 at 1:58 pm
Danyl
You called it!
Vote:July 7th, 2011 at 2:02 pm
As I said on Stuff, it’s all academic anyway as Labour is not going to be the government on November 27 and might be in three years time. That means the CGT is at least four years away, and with revenue expected 15yrs after implementation then Labour’s $4.5billion is 20yrs away. Plenty can happen in 20yrs, including change of governments – some of which could repeal this stupid idea.
Vote:July 7th, 2011 at 2:07 pm
Nick called it.
If a CGT was applied to rental investment properties there would be uneven effects.
What would be likely to happen in Dunedin where there is an unusually high proportion of student rental housing? The students are never going to buy if landlords choose to exit the market.
Vote:July 7th, 2011 at 2:10 pm
I have to agree with Danyl here – that last sentence ruined an otherwise good column DPF (regardless of whether or not it may be true!)
Let’s hope what Labour actually comes out with addresses the quite valid concerns being raised. I fear they won’t, but hope I’m mistaken – we need more credible policy from the main opposition party.
Vote:July 7th, 2011 at 2:12 pm
LL I thought the main opposition party was the Greens at the moment. Those sitting in the Labor seats a simply nodding sock-puppets.
Vote:July 7th, 2011 at 2:19 pm
alex Masterley: “Those sitting in the Labor seats… …nodding sock-puppets.”
Haha – how true.
Vote:July 7th, 2011 at 2:25 pm
DPF, the reports I have seen suggest Labour’s CGT proposal, like the Greens’ one, would be on all assets other than the family home.
Levying it on investment property only would be economic stupidity. Like GST, a CGT has to be comprehensive to be both fair and difficult to avoid. Otherwise the tax accounts and lawyers will just find loopholes to exploit. I doubt Labour will be that stupid.
Vote:July 7th, 2011 at 2:26 pm
Says lots about our national, myopic focus on property as an investment class when any discussion of CGT is exclusively centered on property. Any taxation scheme should be about encouraging investment in productive, export-centric initiatives… rather than trying to squeeze tax revenue out of Keynesian housing bubbles as they expand.
Vote:July 7th, 2011 at 2:28 pm
At least I have a fair bit of time to work out how much I need to increase my rents by to compensate for any possible tax I may have to pay.
Vote:I will most certainly be passing on as much as I can to the tenants.
Thats how it works folks.
July 7th, 2011 at 2:29 pm
Historical precedent means nothing to you, Toad?
Vote:July 7th, 2011 at 2:29 pm
@toad – “I doubt Labour will be that stupid”
Tui?
Vote:July 7th, 2011 at 2:30 pm
Toad, I’m a lawyer. I would expect a jump in my firm’s activity were CGT to be introduced.
Vote:July 7th, 2011 at 2:36 pm
I thought it was supposed to be a sensible idea to simplify the tax system as much as possible.
Why would people vote for complications?
Vote:July 7th, 2011 at 2:45 pm
A world first! A Luddite doubting Labour stupidity (which is boundless).
Vote:July 7th, 2011 at 2:49 pm
It will be interesting to see if Labour have the balls (and brains) to do it properly. I doubt it, history tells us so.
Certianly will cause a flurry of activity in tax/legal circles as people arrange structures etc and move property around.
Manolo…you didnt happen to do a bit of a wine trip thru South America in ’08 did you?
Vote:July 7th, 2011 at 2:52 pm
Yes, the same one.
Vote:July 7th, 2011 at 2:59 pm
Good Man, keep up the good work!
I will look later for an incriminating photo of you pinching that wine guides arse!
Vote:July 7th, 2011 at 3:05 pm
Goff is a property investor. Clark owned many investment properties… maybe seven, IIRC. I presume other Labour MPs are in a similar situation.
I think we need to be alert to any of them offloading properties between now and the election. That’d be extremely unethical.
Vote:July 7th, 2011 at 3:27 pm
Even though the odds are against Labour implementing their CGT in the next few years how much could all this talk of CGT spook property investors that have already seen a few ghosts over the past few years?
Vote:July 7th, 2011 at 3:29 pm
@davidp says: “I think we need to be alert to any of them offloading properties between now and the election. That’d be extremely unethical.”
It would also be the most optimistic thing witnessed since an ant was spotted crawling up an elephant’s leg hanging on to a piece of confetti, with the intention of wiping the elephant’s arse.
Vote:July 7th, 2011 at 3:37 pm
The loony left yet again fail to understand the motivating factors of incentives and disincentives that state action engenders in the people.
Vote:July 7th, 2011 at 3:43 pm
Toad wants to lecture us on economic stupidity?
This from the people who want to change the weather with a tax. Well hes certainly qualified to speak on economic stupidity.
Vote:July 7th, 2011 at 4:01 pm
Poor people still take out Kiwisaver accounts. The share trades on NZ companies will be subject to Labours CGT. Overseas shares will not. This will mean that Kiwisaver accounts will move overseas or poor people will suffer from Labours CGT
Vote:July 7th, 2011 at 4:01 pm
The legal and accounting professions alway prifit from more and ever complex legislation. Both rub their hands with glee when they see Gumints coming with up complicated policy.
So the Socialists as they are inclined to do benenfit the rich pricks most of whom dont vote for them every time they are in power.
I have always found this ironic and amusing. And dont forget many Socialist voters will have baches and rentals or aspire to have same.
Do you REALLY think they will be like turkeys and vote for an early Xmas. Dont think so.
Vote:July 7th, 2011 at 4:02 pm
Is it true that Goff’s investment property is owned by a company which he owns? If so, would that be a way for Goff to avoid his own tax?
Vote:July 7th, 2011 at 4:12 pm
The socialists (Labour and Luddite Greens) thrive on policies of envy and widespread misery. If allowed, these despicable politicians would tax productive New Zealand to the hilt.
Vote:July 7th, 2011 at 4:23 pm
Love to see Goofy explaining to the useful idiots why rents have risen beyond their ability’s to pay them. Monies extorted for a CGT would soon have to redistributed to the peasants in order for them to remain housed, back to square one for the socialist suckholes.
Vote:July 7th, 2011 at 4:35 pm
@side show bob: Assuming rents do rise beyond “the useful idiots” ability to pay, it looks like it’s bad luck for those that own rental property, what with the decreasing demand and all.
Vote:July 7th, 2011 at 4:39 pm
“Love to see Goofy explaining to the useful idiots why rents have risen beyond their ability’s to pay them.”
He wont. He’ll just use our money to buy houses and rent them out in accordance with “ability to pay”.
Vote:July 7th, 2011 at 4:43 pm
Is this as simple as assuming that a proposed Labour policy must be a sinister socialist plot to seize more wealth? Are there argument for a CGT? Like this one:
Vote:‘Treasury pushes for capital gains tax’
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10576312
July 7th, 2011 at 4:50 pm
mikenmild>Are there argument for a CGT? Like this one
That argument is for widening the tax base. If Labour wanted to replace some income taxes with a CGT then I could support it, although there would still be issues around evasion such as the company ownership structure Goff has used for his own property investments. BUT… Labour wants a CGT as well as increases in income tax. Despite all the wasteful spending of the Clark years, they still think they can spend our money better than we can.
Vote:July 7th, 2011 at 5:08 pm
davidp
Yeah, I get that. But given it seems a CGT would have modest impact initally, it’s not really a cash cow for a spending list, is it? I think I’d be concerned if it was rasing billions to increase benefits, abolish tuition fees, [insert rest of Labour wish list], but the concept seems sound enough.
Vote:July 7th, 2011 at 5:50 pm
A CGT maybe not raise much. However it may result in more tax collected from other sources. As some other forms of income exploiting the tax loophole (not taxing capital gains) will no longer be worthwhile to do (eg providing employees discounted shares which are there onsold for a Capital Gain)
Vote:July 7th, 2011 at 5:57 pm
Great contribution there Danyl. I assume you have never worked in the legal or accounting industry?
Vote:July 7th, 2011 at 5:59 pm
Labour are not going to win this coming election or the one after it.. or the one after that…. mantra
Is it possible to make a building a company?
Vote:July 7th, 2011 at 6:12 pm
The takeaway message is not the back-and-forth arguments over details but the primary reason that a CGT is finally being proposed: the state is running out of money.
Once you understand that a CGT makes perfect sense – as will every other new tax that will have to be created in the next few years.
It seems quite a gamble to think that the state can somehow – across the decades and many economic cycles – consistently push revenue growth ahead of government expenditure growth.
Personally I think it’s a hell of a bet to run. The safer course would be to slash government spending, especially those programmes that are not discretionary.
Vote:July 7th, 2011 at 6:20 pm
And when there’s nothing more to tax?
I can only think of air ( and thats going to change)
Vote:and conversation
July 7th, 2011 at 6:24 pm
Looks like Labour aren’t stupid enough to just tax residential investment property after all – it’s more widespread than that according to 3news this evening which is a good thing. Let’s wait for the details before jumping up and down too much…
Vote:July 7th, 2011 at 6:32 pm
The tax working group suggested $4b pa however did point out it would take 10 years to become effective. It be targeted to one asset class or it will be all but impossible to administer.
In many cases the IRD already has the tools to tax the gains on property transactions as income by determinig whether or not the propoerty was purchased with the intent of resale. If it takes a hard line on this it becomes a bit of a difficult one for home investors. Especially if the propoerty purchase has been structured in such a way that there is no taxable income generated during ownership.
Vote:July 7th, 2011 at 6:34 pm
………. Tom at 6.12.
Vote:Fully agree. Slash Government expenditure is the only realistic option.
That would eliminate any need for increasing tax and need for CGT (and CGT is also dumb anyway)
That reduced need for revenue would allow the elimination of Income tax.
Running on GST only would be fairer to all, and helpful to the lower ‘income’ group.
July 7th, 2011 at 7:15 pm
So, what excites the left-wing in NZ? What gets the happy hormones flowing?
The creation of myriad new businesses from which wealth will flow?
No.
Some random quotes:
A new tax! Woo hoo.
Of course there’s some stuff about how this will be a business incentive (like carbon tax), possibly re-directing investment into new companies or growing old ones, and yada, yada, yada. But it’s all rather a throwaway sentiment. The aspect that really gets the juices flowing is the prospect of sticking it to people who make money in ways that don’t contribute to society – and electoral advantage.
Poignant, yet deeply funny.
Vote:July 7th, 2011 at 8:22 pm
“How much would a CGT raise?”
Three key things really:
1. Lawyers & accountants earnings
Vote:2. Delays in court proceedings (as the commercial hearings clog up the system)
3. Emigration
July 7th, 2011 at 8:39 pm
@bhudson 8:22 pm
To be honest, I don’t give a big rat’s arse how much it raises. I have no idea of the detail of Labour’s policy yet. But from a Green perspective the principal reason for a CGT is not to raise revenue but to divert investment into productive enterprise which employs people, rather than stagnant property speculation which does not.
Vote:July 7th, 2011 at 8:51 pm
Toad
More than willing to invest in some very productive mining ventures but everytime they are mooted there is outrage.
More than willing to invest in diary but more diary equals outrage.
More than willing to invest in some oil well ventures but………..
I may have missed it but what productive enterprises are the Greens thinking of that all this loot ( not much from me) will be diverted to?
Anything beginning with ” Ministry of ..” is disqualified
Vote:July 7th, 2011 at 8:55 pm
Toad, that is disingenious. Russel Norman said today he wants a comprehensive capital gains tax which taxes gains on all assets. So your diverted productive investments are still taxed.
So that argument is a big fat lie. You can’t fool us – the Greens would tax anything that moves even the lifeblood of the universe, Carbon Dioxide, if you had your way.
Oh hang on………..
Vote:July 7th, 2011 at 9:30 pm
@Nick K 8:55 pm
You Actoids really don’t get it.
There should be no fiscal disadvantage to mining, which there is at the moment, because the tax laws encourage investment into property speculation as opposed to mining.
The impediments to environmentally unsustainable mining should be regulatory, rather than fiscal.
Which rules more coal out completely unless someone comes up with a way to address the coal seam methane emissions and CO2 emissions from burning it, but does not necessarily impede other mining operations (such as those for rare earth minerals – or even gold, although the amount of it we have tucked away in vaults doing nothing industrially makes me question the need to mine any more for a few hundred years) if they can demonstrate the benefits outweigh the harms.
Vote:July 7th, 2011 at 9:34 pm
Toad
What are we to invest in that will generate income and create employment?
Vote:July 7th, 2011 at 9:56 pm
The argument for CGT on investment properties is to discourage get-rich-quick investors buying up all cheap properties and creating a supply/demand problem that sees prices spiral up, out of the reach of first-time buyers who just want to buy somewhere to live in.
But globally, that horse bolted years ago. And market forces put an end to the spiral. (While governments worldwide chose at the time to ignore the risks of property bubbles because their economies were doing well out of it).
Most places, owning your home gives you security. In NZ, perhaps it’s better to be a tenant? Easier to walk away from the rubble if you want to.
Vote:July 7th, 2011 at 9:56 pm
A couple of simple things need to be addressed in the CGT rant….
1 – Where are all the alternative investment options that are as safe as housing?
Vote:2 – If a property is purchased with intent of flipping/onsell then tax must be paid and not to do so is illegal. How will a CGT change the behaviour of habitual tax cheats? If the “family home” is exempted there will be holes in the rules you can drive a bus thru.
July 7th, 2011 at 10:02 pm
Pauleastbay 9:34 pm
IT software and hardware, manufacturing, tourism, service industries, sustainable energy, organic agriculture, horticulture, forestry, timber processing, paper production… Hey, I even support the Tiwai Point aluminium plant, only because we can do it with a renewable energy source and if it were to be closed down Rio Tinto would go overseas somewhere and power its repacement with coal.
Vote:July 7th, 2011 at 10:25 pm
Toad
At least you had an answer
The main trouble is that all those industries mentioned already exist and many are niche to the point of being cottage industry.
Vote:Must away
July 7th, 2011 at 10:40 pm
@toad,
“IT software and hardware, manufacturing, et al…”
But your comprehensive CGT would also apply to investments in those areas Toad – making them as equally unattractive as property. Thus not actually having the desired effect of promoting investment into productive areas.
So your plan wouldn’t promote or incent investment at all – it would simply punish it irrespective of whether it was made in productive or other areas.
Russell’s CGT is, in fact, just a tax switcheroo (to use his turn of phrase)
Vote:July 8th, 2011 at 8:26 am
This is Labours attempt to split the ‘aspirational middle class’ vote in two and peel away votes from National. A CGT affects those who have investment property and spare cash tied up in shares. It does not affect those who are currently saving for their first home, those still paying off their mortgage for their first house, and those with no savings at all. That’s a large sector of NZ Society. This hits Nationals ‘base’ more than Labours, making it politically impractical for National to implement. It therefore must only be a Labour government that can feasibly implement this tax.
Thinking long term here, Labour will one day be back in Government. Maybe not this year, maybe not in 4 years time, but perhaps the following election they will squeak in with the Greens and other minor parties clinging together.
So it is only a matter of time before the CGT becomes a reality in New Zealand.
Question: How would National/ Act modify this kind of tax regime to balance a Labour/Green CGT in say 12 years time?
I assume they would reduce income tax first rather than completely remove a CGT.
Would a tax regime with lower income taxes and a CGT lead to a more balanced economy in terms of investment in productive businesses rather than the ‘dead wood’ of houses?
Vote:July 8th, 2011 at 8:44 am
The investments Toad mentions don’t share the same risk profile as property. Not even close.
And what bhudson said.
Vote:July 8th, 2011 at 8:52 am
The industries that Toad promotes are largely low wage low skill industries.
Vote:Paper production and timber processing are some of the highest polluters in New Zealand.
Strange hearing a green promote them.
July 8th, 2011 at 8:55 am
@toad
Yes set up a high tech business in NZ where you get taxed for being wicked enough to conduct R+D (R+D= capitalized and so paid for from taxed income).
Then after being taxed blind and if you do happen to become successful you can join the ranks of the despised rich pricks. Vilified by a significant portion of the population and political hacks scoring cheap points.
Yes an entrepreneurs paradise.
Not to mention Aus offers heavy subsidies and grants to set up business there.
So the left hate business, treat them like shit and now look to them as the way forward?
Vote:July 8th, 2011 at 8:59 am
We go into the election with a clear choice.
Vote:National wants to cut waste and reduce tax and be careful with government spending.
Labour promises to increase waste and increase tax and be reckless with government spending.
If this is a so called circuit breaker it is in fact a fuse……
July 8th, 2011 at 9:01 am
@ Toad
You haven’t even addressed my point at all. You answered Pauleastbay’s point about mining but utterly failed to answer my question. Therefore it is you who doesn’t get it. Answer my concern:
.
Norman said the reason we need a CGT on housing is to divert investment to the productive sector. On RadioNZ he then said that the Greens want a comprehensive CGT across all sectors. So the productive sector asset appreciation would also be taxed.
How do you deal with that hypocricy?
Vote:July 8th, 2011 at 9:32 am
Nick said…
Norman said the reason we need a CGT on housing is to divert investment to the productive sector.
Because Norman is a scum? Why? He is a parasite (someone who doesn’t produce). His living is earned from being an MP. He doesn’t produce anything of real value except acting like a Stalin in proposing to regulate free people who want to be left alone in running their business affairs. That sort of attitude from losers like Normal is unbelievable. Divert investment to the productive sector, who the fuck he think he is? How about he gets out to the real world and get a real job, earn money, then he (& his ilk) can then divert their own resources & money into investing in the productive sectors. It is amazing that the society, just simply sits and accepts the dictatorial commands coming from losers in Parliament as if it is their own resources/properties that they’re issuing command to.
Vote:July 8th, 2011 at 9:58 am
Gee, Falafula, 9.32, an amazingly literate contribution, for you.
Tell me, does this apply to all 121 MPs, or just the ones who policies you don’t like?
By the way, off topic, sorry, but have you had your seminal work disproving whatever is the flaw you think you have found in the AGW Theory published anywhere other than blogs, yet?
Vote:July 8th, 2011 at 10:03 am
Don’t be mean to Falafulu, Luc.
Vote:July 8th, 2011 at 10:05 am
@Nick K 9:01 am
All assets (other than the family home) would be treated equally. All income, whether earned or realised capital gain, would be treated equally. Yes, productive sector asset appreciation would be taxed as well as property, but that is consistency, not hypocrisy. It is the “level playing field” you guys on the right always seem to be on about (except in this instance, for some reason). If a capital gains tax is not comprehensive, it encourages all sorts of rorts, just as exist today where property investment businesses (which should be taxed under current income tax legislation) hide behind the facade of being residential tenancy businesses to avoid tax.
Vote:July 8th, 2011 at 10:08 am
Ah Luc and mikenmild, cut from the same cloth clearly. Neither of you can hold your own in a debate.
Vote:July 8th, 2011 at 10:14 am
mikenmild, how much do you get from the dole a week to sit and post messages all day here on Kiwiblog? If you’re working then you’re a parasite . It means that someone is paying for you to do nothing all day, except posting messages here on kiwiblog. If you’re not on the dole, I suspect that you’re just bored at the rest-home and that explains why you post messages here from sunrise to sunset.
Vote:July 8th, 2011 at 10:17 am
“If you’re working then you’re a parasite . It means that someone is paying for you to do nothing all day, except posting messages here on kiwiblog.”
Vote:mikenmild claims to be a civil servant on $71k.
July 8th, 2011 at 10:25 am
So it’s just another tax then, Toad? No drop in income tax to compensate? Not tax neutral, and therefore takes away yet more investment income, and diverts it to the usual suspects.
Well, that’s encouraging.
Vote:July 8th, 2011 at 10:36 am
Peter, the correct response to the fix almost the entire western world finds itself in is a mixture of increasing government revenue and controlling spending. An increase in tax is exactly what we need. Unfortunately, even in the face of data showing his trickle down economic beliefs don’t work, in fact, the make things much worse, our Minister of Finance continues to hand out tax cuts to the better off while cutting incomes of the less so.
We also need infrastructure spending, with an emphasis on green projects eg solar, wind and geothermal energy projects, mass transit, more dense cities, and energy efficiency projects, all of which at the very least will reduce our current account deficit by reducing our dependence on oil.
Why the west continues to needlessly enrich the east will be one of the great mysteries for future historians to ponder.
Vote:July 8th, 2011 at 10:38 am
RN
An ongoing torrent of abuse and misinformation is not debate.
Vote:July 8th, 2011 at 10:39 am
I am puzzled by Labour’s tactics here.
They are clearly leaking well in advance of the announcement, but don’t seem to be doing anything about trying to manage the inevitable circus. The Government is getting a free run in criticising the unreleased plans, and aren’t burdened by having to discuss the actual plans, since they haven’t been released. And the Greens are getting a lot of air time explaining what has been their policy for a long time. Labour leaders are left to look stupid by not commenting.
My conclusions are that either:
a) Labour, and Trevor Mallard as campaign manager, are incompetent and this is a complete cock-up, showing that they have few ideas and have neither the resources or the brains to run a proper launch;
b) They really do believe that there are a large number of people who voted National at the last election who really do want to see the country lurch to the left and are thus going to switch parties on the promise of more redistributive policies; or
c) They have a cunning plan that involves actually announcing a different tax policy to the one they are leaking.
(b) and (c) are really variants on (a), and I suspect that (b) is the right answer. Labour continue to act as if the 2008 election was a mistake and they are waiting for the population to come to its senses and realise that they actually want Labour’s polices and thus return Labour to its natural state of leadership.
It will only when those members of the Labour caucus who believe this line retire that the party might have a hope of winning the election.
Vote:July 8th, 2011 at 10:41 am
Luc, now you understand that you’re a step closer to being able to debate. Keep up the work.
Vote:July 8th, 2011 at 11:16 am
@Peter 10:25 am
The Greens propose over $3 billion in income tax cuts to compensate for the introduction of a CGT by introduction of a tax-free threshold of $10K.
Vote:July 8th, 2011 at 11:36 am
Here’s a funny one
From Stuff: Stuff
In a joint statement yesterday, Auckland University of Technology academics said a capital gains tax was “absolutely necessary” to better direct investment across the economy.
The average New Zealander would not be affected by the tax because most did not have investment properties.
“Introducing this policy would force the serious investors to put their money into markets that will stimulate economic growth,” the academics said.
Hmmm… I personally know plenty of people who have an investment property – either a rental, or a bach, or a house for the kids to live in while they study, etc etc.
They’re most definitely just ordinary Kiwis. They’re not “rich pricks”.
Vote:July 8th, 2011 at 11:42 am
As I attempt to put together a deposit to buy my first home, I pay tax on the interest that my investment returns.
Why should the growth of one kind of investment in particular (net profit from the sale of rental properties) enjoy any sort of special tax-free status that no other form of investment does?
Vote:July 8th, 2011 at 12:31 pm
They’re most definitely just ordinary Kiwis. They’re not “rich pricks”.
It’s not just property investors that could be influenced by this.
A couple of elections ago the student loan policy only directly affected a small proportion of voters, but there were many family connections that also vote and were influenced by it.
Many property investors will have parents and kids and grandkids, many of whom will have an interest how the investments will perform and how tax changes may impact on the timing of realisation, inheritance and other things.
Vote:July 8th, 2011 at 1:32 pm
why do the greens hate builders, real estate agents, property managers and others who benefit from a strong property market/economy?
All the work created in that industry is surely not unproductive?
another question, if all the people with investment property get rid of them becuase the greens in their ‘intelligence’ want investment in other areas, who is going to buy these properties? the people that will never afford property now, will never afford property no matter how much the greens try to interfere.
also, why of the greens and labour hate middle class NZers who own property? If a CGT causes the rush away from property that they want, this will reduce the value of average homes, why do the greens and labour want average new zealanders to lose value in their homes?
So there you have it:
the greens and labour hate everyone who works in the property sector and consider them unproductive and
the greens and labour hate nzers who own an average home becuase they want it to lose value when they bring in a CGT.
“the greens and labour – hating hardworking nzers for years”
Vote:July 8th, 2011 at 2:37 pm
@toad (11:16am)
“The Greens propose over $3 billion in income tax cuts to compensate for the introduction of a CGT by introduction of a tax-free threshold of $10K.”
Another switcheroo – a triple-take switcheroo in fact…
Tax the ‘rich pricks’ more in the first place (as they are now.) Then increase the top income tax rate for same. Then hit them again with CGT on any form of investment they might choose to make with the disposable income you allow them to have. Then switcheroo the gouged funds to another group.
What is more, your plan doesn’t actually increase country revenues at all – it merely redistributes existing income in a one-sided merry-go-round. Where is your plan to grow GDP?
Norman’s talk of increasing revenue is disingenuous nonsense – he is not creating more money – just taking potential investment money off one group so the Govt can spend it on another – which also reduces the amount of money available for investment, thus reducing investment and, in effect, contracting the economy relative to other countries.
toad – you can only redistribute other people’s money if they are able to earn it in the first place. In order to continue your tax and spend game you actually have to help the ‘rich pricks’ earn more in the first place.
Vote:July 8th, 2011 at 5:42 pm
It says much about Labour’s intended CGT that they still admit they would borrow more in spite of introducing a new tax they say will raise 4.5 billion per year:
http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10737071
Vote:July 8th, 2011 at 6:28 pm
The economic-illiteracy-o-meter is redlining on that statement.
Vote:July 9th, 2011 at 11:17 am
I shall look forward to reviewing the many ways to legally avoid this tax on my assets. I can see a few immediately – the balance will be for my Accountants.
Initial reply from them is “Easy – we will send you the bill accordingly”.
Its nothing new, really as there are many ways already of incurring CGT.
Its up to the IRD to persue this more vigorously than at present.
Vote: