ACT’s 10 reasons to oppose a CGT

ACT has listed ten reasons to oppose Labour’s Capital Gains Tax. They are:

1. The rate will increase over time, as income tax has gone from 5% to 39% and GST from 10% to 15%
2. It’s a gift to tax accountants
3. It’s a tall poppy policy
4. It’s double taxation
5. It won’t affect house prices
6. NZ is already taxed highly at 34% of GDP
7. Believe New Zealand is Exceptional
8. A CGT is not inevitable
9. It will affect you in ways you least expect
10. The Greens will force Labour to expand a CGT

I oppose Labour’s CGT, but am not opposed in principle to a CGT if it followed these principles. They are:

1. Revenue Neutrality – there are income tax cuts to compensate
2. Inflation Indexed – tax is on real gains, not just inflation
3. No exceptions – all capital gains are taxed
4. Grandfathering – only assets purchased after the CGT is introduced are tax