Capital Gains Tax finally on a major party's agenda

[BoristheBiter]

Too mechanistic and cynical for my tastes. Love is not caring for someone in exchange for sex, protection, shelter or some other advantage. Compassion isn't to look good to others. Undoubtedly many do feign these and other "affections" for social advantage but that doesn't mean the real deal does not or can not exist. Believing no only that we are no more than the sum of our parts, but further that we are constrained by our biology to act and think in certain ways is.... unskillful. We can do better than that.

Evolutionary Bio is fascinating but not the last word. A friend risked death repeatedly for the benefit of others. He gained nothing but the knowledge he was helping sick children. He's very quiet about this matter and would want no public accolades or even private praise. He does not know, and will never meet, the people he helped. He gains nothing by this, nor do his descendants. But it was the right thing to do and he is sufficiently enlightened to have made the decision. Explainable? Yes, but not by EvBio. People have been doing this for centuries.

Note this isn't a plea to a higher absolute morality or deity, or even an appeal to the soul. I don't even think I have one of those - and certainly not a permanent one - and I'm definitely not big on deities. But I can tell you it's entirely possible (and fortunately not uncommon) for people to concern themselves the others for no personal gain at all.

I think you are mistaking the "good of society" with empathy.

If you look at the "hive" culture all is done of the survival of the colony, there is no room for empathy in "hive" culture.

Until you take out the undesirables you will never have what you are looking for.
And who gets to decide who is undesirable.
With free thought comes free will and all its associated problems

[rainman]

I think you are mistaking the "good of society" with empathy.

If you look at the "hive" culture all is done of the survival of the colony, there is no room for empathy in "hive" culture.

Until you take out the undesirables you will never have what you are looking for.
And who gets to decide who is undesirable.
With free thought comes free will and all its associated problems

Not really, empathy is all about recognising the suffering of others as being valid and "made of the same stuff" as your own suffering. Basically, seeing that others are worth giving a shit about because they are kinda like you. Once you get there it's not a big leap to true compassion. The "good of society" logic is perhaps based in considerations of empathy, but can be motivated by duty or obligation as well, or even self-sacrifice.

There isn't that much room for empathy in traditional hive cultures because bees and ants have simpler brains, probably without the mirror neurons we have that may underpin empathy. There are those that say they possess no qualia - or that they aren't aware of their experiences in a subjective way, but I'm not sure we can know that to be honest. Anyway, it was an analogy - we're quite different to bees really, but just as the hive can act as one to protect the queen during a swarm, without needing a bunch of managers and government to tell them what to do and when, and without having to worry about their taxes and those lazy bludger male bees sitting on their arses and eating more than their share of the nectar, I did hope we might have understood that society or community is also an emergent property of the things called all of us. And what determines how good a society is, is what we each do.

Free will is important, but ask yourself: what makes someone exercise their free will to do things that disadvantage others, rather that those things that benefit others? Perhaps rampant individualism, "survival of the fittest and fuck the rest" economics has a lot to answer for. Maybe we should teach our kids "we first", not "me first", and see how that goes?

[Winston001]

Not really, empathy is all about recognising the suffering of others as being valid and "made of the same stuff" as your own suffering. Basically, seeing that others are worth giving a shit about because they are kinda like you. Once you get there it's not a big leap to true compassion. The "good of society" logic is perhaps based in considerations of empathy, but can be motivated by duty or obligation as well, or even self-sacrifice.

Nicely put.

So how do you explicate our advancement to a co-operative empathic culture (6000 years of social advancement to this point) with 20th century events - Rwanda, Pol Pot, the Japanese in Manchuria, Mao's purges....??

Please don't suggest its because these were backward societies. Russia the home of Dostoevsky, Catherine the Great, the Hermitage et al - Stalin eradicated whole populations: Germany the home of European culture with Wagner, Goethe, Freud...by state fiat murdered 6 million human beings. Unimaginable brutality. Carried out by other human beings who went home each night and loved their children... They had plenty of empathy.

[rainman]

So how do you explicate our advancement to a co-operative empathic culture (6000 years of social advancement to this point) with 20th century events - Rwanda, Pol Pot, the Japanese in Manchuria, Mao's purges....??

Humans are indeed an interesting (and frequently unpleasant) lot; I don't propose we could all transition to a happy state of co-operative mutualism overnight, and I certainly don't expect this to occur any time soon. Doesn't mean progress towards a more enlightened state is impossible, of course, either individually or collectively.

I do think devoted individualism is heading in exactly the wrong direction, though. Thus my objection to strident calls of protest along the lines of "the bastards, they're taxing meeeeeeee.....". There's more to life.

[mashman]

Humans are indeed an interesting (and frequently unpleasant) lot; I don't propose we could all transition to a happy state of co-operative mutualism overnight, and I certainly don't expect this to occur any time soon. Doesn't mean progress towards a more enlightened state is impossible, of course, either individually or collectively.

I do think devoted individualism is heading in exactly the wrong direction, though. Thus my objection to strident calls of protest along the lines of "the bastards, they're taxing meeeeeeee.....". There's more to life.

The problem I have with the "ideal" is that we're all waiting for someone else to go first to prove that "it (the ideal)" (peace and love man, for want of a better description) does exactly what it says on the tin. People love using the past as proof of what hasn't worked and what is absolute (usually prior human behaviour and social structures ), and only sneek a peek at the future when challenged... and unfortunately when challenged they, more often than not, role out and hide behind the "Red" carpet (communism, socialism etc...) before dismissing any further thought on the subject. Shame really. Or at least that's my simple take.

You could "change" society tomorrow and noone would bat an eyelid as long as everyone else was in the same boat... after all, it has been decided by those uber brains that it's the best way for people to live, I mean, they wouldn't just change society for the sheer hell of it, TPTB would have had real reasons for the social shift.

[Winston001]

Ha, we seem to have strayed a long way from the original topic - I had to go back up the page to see CGT.

I do consider that evolutionary psychology/biology provides us with answers to the mysteries of why humans think and act in certain ways. Despite the veneer of civilisation, we are only a moment away from primal responses.

Still, none of this gainsays unselfish high-minded ethical behaviour. I'm all for it. Indeed we probably will evolve into a cooperative entity which may be biological or virtual - a cloud of self-aware electrons and photons with the power of Gods.

I do think devoted individualism is heading in exactly the wrong direction, though. Thus my objection to strident calls of protest along the lines of "the bastards, they're taxing meeeeeeee.....". There's more to life.

Ok, we'll just have to differ. The view of man which rings true for me is the integrity of the individual. Not at all costs to others, but each person is worthy of respect and should not be harnessed to the collective plough. Except...except the individual must owe and contribute to the collective. Therein lies the rub. How much?

[Winston001]

Was listening to Jim Mora on National Radio talking to Bernard Hickey who said the greatest period of growth experienced by the West was post World War II. At the same time taxation rates were very high by todays standards, yet that did not stiffle innovation and new business. There was an explosion of wealth which spread throughout society.

I'm choking at changing my point of view but it would be silly to ignore the evidence of history if Hickey is correct.

Maybe....just maybe, higher income taxation is justified. I do agree with him that capital or wealth taxes make sense but of course the devil is in the detail. I maintain that the best tax is a simple tax: applied evenly to all with no exemptions and exceptions.

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

[Ocean1]

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

There'd be a great deal of house swapping going on. "I'll sell you my house for $50k and buy your house for $20k, OK?

Stick with your instincts, it's either simple, with no exceptions or it's amenable to avoidance.

Oh, and you're not so simple minded as to link post WWII economic growth to high taxation, are you? Try constructing a Laffer curve, start with a big bag of variables and some basic regressive analisys. Take your time, with practice you can get any answer you want...

[Winston001]

Cheers, just struggling to keep an open mind.

I believe in taking the long view and studying history to see if its all been done before. For example the current slump the world is experiencing is not new or even unusual. The one difference is we can discuss it in real time instead of Letters to the Editor and delayed cable news as they had during the Great Depression, which makes events appear more urgent and apocryphal.

[mashman]

Was listening to Jim Mora on National Radio talking to Bernard Hickey who said the greatest period of growth experienced by the West was post World War II. At the same time taxation rates were very high by todays standards, yet that did not stiffle innovation and new business. There was an explosion of wealth which spread throughout society.

I'm choking at changing my point of view but it would be silly to ignore the evidence of history if Hickey is correct.

Maybe....just maybe, higher income taxation is justified. I do agree with him that capital or wealth taxes make sense but of course the devil is in the detail. I maintain that the best tax is a simple tax: applied evenly to all with no exemptions and exceptions.

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

Whilst you're choking, instead of lumping it all on the 1 tax, why not think about bringing in the financial transaction tax that has been mulled by the Greens and Mana to give the instant injection that CGT won't? If that allows for GST to be dropped completely, as has been touted, there may well be enough left over to bring in CGT at a lower rate?

[The Stranger:Me]

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

There is no gain on the sale of a private home.
I buy a house for 100k and sell it for 200k 5 years later.
To buy a house of equivilent value I have to spend how much? 200k. Sorry, where's my gain?
If I have to pay tax on it then I'm out of pocket.

Investment property well ok, it was bought as an investment, but a private dwelling?
Doesn't make sense to me to push people backward (by taxing them) because say they have an extra kid and the current house is too small. Sure some may well get a windfall as an area becomes more popular etc, but try to look beyond the green eyed monster.

Private dwelling should not be taxed.

[Winston001]

Whilst you're choking, instead of lumping it all on the 1 tax, why not think about bringing in the financial transaction tax that has been mulled by the Greens and Mana?

Jim Anderton advocated this 15 years ago. In truth I don't know enough about it but it seems an odd sort of tax - taking money from people because they move it from one account to another, or one bank to another. Change a term deposit and you are taxed?? People would put money under their mattresses. The wealthy would establish off-shore accounts - lots of Kiwis already have Oz bank accounts.

A clean (but politically unacceptable) alternative is an annual assets tax on everyone.

There is no gain on the sale of a private home.
I buy a house for 100k and sell it for 200k 5 years later.
To buy a house of equivilent value I have to spend how much? 200k. Sorry, where's my gain?
If I have to pay tax on it then I'm out of pocket.

Investment property well ok, it was bought as an investment, but a private dwelling?

Understood.

The problem is defining a private home. What do you do if you own rental properties in the names of your children and move into each house as your "domicile" before selling? There are legal and illegal ways round CGT if exemptions are allowed.

If everyone was taxed the same, selling prices would drop to allow for it, otherwise nothing would ever sell.

[Usarka]

There is no gain on the sale of a private home.
I buy a house for 100k and sell it for 200k 5 years later.
To buy a house of equivilent value I have to spend how much? 200k. Sorry, where's my gain?
If I have to pay tax on it then I'm out of pocket.

Investment property well ok, it was bought as an investment, but a private dwelling?
Doesn't make sense to me to push people backward (by taxing them) because say they have an extra kid and the current house is too small. Sure some may well get a windfall as an area becomes more popular etc, but try to look beyond the green eyed monster.

Private dwelling should not be taxed.

I'm failing to see the problem. You bought an item for $100,000, sold it at $200,000. You are now $100,000 better off than when you purchased the property 5 years ago. You have earnt 100k. If you want another $200k house, take out a small mortgage.

You might instead decide to buy that $150,000 yacht that you wanted instead of buying another house. You couldn't have done it until you'd made the extra $50k from your capital gain....


Edit: I'm fairly sure it was going to exclude personal homes anyways...

[Ocean1]

I'm failing to see the problem. You bought an item for $100,000, sold it at $200,000. You are now $100,000 better off than when you purchased the property 5 years ago. You have earnt 100k. If you want another $200k house, take out a small mortgage.

You might instead decide to buy that $150,000 yacht that you wanted instead of buying another house. You couldn't have done it until you'd made the extra $50k from your capital gain....


Edit: I'm fairly sure it was going to exclude personal homes anyways...

Re edit: it was proposed as such.

The rest: He raised the inflation issue; he'd have to spend the total $200k from his old house to buy another of equivalent quality. You're effectively taxing inflation, penalising him for moving to a new location.

You could inflation adjust it, but who's inflation index do you use? Besides, government doesn't really care if it's actual "Gains" they just want to maximise the take.

[The Stranger:Me]

I'm failing to see the problem. You bought an item for $100,000, sold it at $200,000. You are now $100,000 better off than when you purchased the property 5 years ago. You have earnt 100k. If you want another $200k house, take out a small mortgage.

You might instead decide to buy that $150,000 yacht that you wanted instead of buying another house. You couldn't have done it until you'd made the extra $50k from your capital gain....


Edit: I'm fairly sure it was going to exclude personal homes anyways...

Of course you fail to see the problem - because unfortunately you look at things the way the vast majority of people (incorrectly) do.
They fail to comprehend what money is and thus seek money as if it were a possession or a goal in and of itself.

It is not.
It is quite simply a store of value.
It is the value that is relevant not the money.
That value may take many forms and is not always accurately conveyed via a dollar value.
But - there has been on increase in value as a result of the sale of a family home - in general terms.

Whilst the proposed GCT was going to exclude the family home (and rightly so) Winston's example included it.

Whilst your yacht example is "possible", lets get real, how often does it really happen - compared to say a divorce causing a forced sale?
So now in a divorce not only does your equity get split AND the lawyers get their cut the govt says thank you too.
As if there isn't enough shit going on you now got to pay the govt for what? Nothing, just because they can.

I feel that the American system of if it is reinvested the CGT either doesn't apply or only applies to a portion not reinvested is fairer - at least to the family home. Let's face it there a a few basic necessities in life - shelter is one of them.