Capital Gains Tax finally on a major party's agenda

**Blackflagged** · 17th July 2011, 16:17

It`s a fairer system.

Say your (Fat Cat) local dairy owner , works 12hr a day 7 days a week for just above minimum wage.15% of his Business sale profit, goes to fund tax cut for the unemployable, with no tax up to $5000.

Sale price less -15%Cgt -15%Gst - 0-39% Income tax & Accountants cut.

Sounds way Fairer

**BoristheBiter** · 17th July 2011, 17:31

Originally Posted by Blackflagged

It`s a fairer system.

Say your (Fat Cat) local dairy owner , works 12hr a day 7 days a week for just above minimum wage.15% of his Business sale profit, goes to fund tax cut for the unemployable, with no tax up to $5000.

Sale price less -15%Cgt -15%Gst - 0-39% Income tax

Sounds way Fairer

Only if you take away all the out goings as well.

**JimO** · 17th July 2011, 17:39

Originally Posted by BoristheBiter

Only if you take away all the out goings as well.

what ?? like the stuff that gets shoplifted, or when the local black mongrel power prospect holds them up for the days takings or are you referring to them being able to feed the family out of the shop stock? bloody criminal shopkeepers

**Winston001** · 17th July 2011, 18:08

Originally Posted by slowpoke

So does anyone actually know what problem a CGT is supposed to fix?

From folks on here I'm hearing it's targeting untaxed income.

From my local labour pollie I'm hearing it's supposed to:
1. make housing more affordable
2. stop housing price bubbles
3. help us retain national assets
4. align us with most other developed nations

Commonsense tells me that "most other nations" with a CGT also experienced massive housing bubbles pre-GFC.

As for retaining assets, what's the go with selling them in the first place? Why sell something that can make you money? Sure a decent wad of cash helps balance the books....

Nice post so I'll just respond to a couple of points.

Capital gains tax is aimed at capturing some of the effects of inflation which otherwise is not touched by government. Arguably they should not want to.

Social theory suggests all wealth should be taxed for the greater benefit of society. Not only wages and consumption (income tax and GST) as it is currently.

Another theory suggests that CGT encourages savers to invest in assets which provide a better return than owning land.

CGT will not cause house prices to drop. CGT will not stop housing bubbles. It hasn't had these effects in any other OECD country.

Asset sales - I don't like this. The governments position is that NZ needs $7 billion next year to repay existing loans. NZ cannot afford to roll over those loans. If - if that is true, selling everything in sight makes complete sense if we want to continue with our schools, hospitals etc.

**Usarka** · 17th July 2011, 18:12

Originally Posted by Winston001

Asset sales - I don't like this. The governments position is that NZ needs $7 billion next year to repay existing loans. NZ cannot afford to roll over those loans. If - if that is true, selling everything in sight makes complete sense if we want to continue with our schools, hospitals etc.

Same position I am in. But I really like the idea of CGT. The guy on the news the other night saying he'd made $6million and was using the same roads, hospitals etc but didn't pay tax is why. Not to get the rich, but to make it fair.

My concern is that Labour won't make it fair, they'll use it to get the rich. And they'll continue with social spending like they've always done, damn the torpedoes.

But at least we'll have a fairer system that future Nat governments can tweak. And we'll still have assets. Trouble is if the Nats are right we'll also be fucked up the arse Greek-style.

Arrrrghhhh!????

**short-circuit** · 17th July 2011, 18:16

Originally Posted by Winston001

Asset sales - I don't like this. The governments position is that NZ needs $7 billion next year to repay existing loans. NZ cannot afford to roll over those loans. If - if that is true, selling everything in sight makes complete sense if we want to continue with our schools, hospitals etc.

As I posted earlier....

No response from the usual pack of tossers in that thread

**JimO** · 17th July 2011, 18:22

Originally Posted by Usarka

Same position I am in. But I really like the idea of CGT. The guy on the news the other night saying he'd made $6million and was using the same roads, hospitals etc but didn't pay tax is why. Not to get the rich, but to make it fair.

whatever he does with that 6mil he will pay tax on, so 6 people sell shares or whatever make a killing and the rest of us that have assets get penalised because of them?? fuck the CGT i say, typical labour wanting more of OUR money to give to THOSE who wont look after themselves, its a small step to include the family home once its been introduced as well, a vast majority of people who rent wouldnt be able to buy a house even if prices did drop

**Usarka** · 17th July 2011, 18:32

Originally Posted by JimO

whatever he does with that 6mil he will pay tax on, so 6 people sell shares or whatever make a killing and the rest of us that have assets get penalised because of them?? fuck the CGT i say, typical labour wanting more of OUR money to give to THOSE who wont look after themselves, its a small step to include the family home once its been introduced as well, a vast majority of people who rent wouldnt be able to buy a house even if prices did drop

You don't get taxed on the assets, you get taxed on the income you make when you sell them. Just like every other person gets taxed on their income. This tax doesn't just go to dole bludgers - that's only a minor part. It gets used for things like infrastructure, health, roading, paying national debt etc.

I'd suggest that people who make income without paying tax are just as much bludgers as the beneficiaries they complain about.

**Ocean1** · 17th July 2011, 18:54

Seems from what I've heard that some economists like the idea, particularly the more academic flavoured ones. Those more interested in the practicalities seem less impressed. Except accountants, they mostly seem to be rubbing their hands at the prospect of a hugely increased workload.

We've finally managed to contrive to have a relatively simple tax system, which sort of limits opportunities for shuffling income around for the purpose of avoiding tax. The wildly differing taxation offered by labour's scheme will re-open many doors for that sort of creative pea and shell game again.

Also, who reckons the government valuation might be subject to some ongoing debate beyond CBT day, eh?

**JimO** · 17th July 2011, 19:00

Originally Posted by Usarka

I'd suggest that people who make income without paying tax are just as much bludgers as the beneficiaries they complain about.

really, you think someone who has worked hard, taken risks mortgaged themselves to the hilt and accumulated some assets or a few renters, paid tax on the way etc and make a few bucks on selling the renters are as bad as the cunts who dont work cos they cant be fucked getting out of bed and get by on the dole and the odd burg. your obviously a labour voter,fuck them greedy rich cunts eh!!

**trustme** · 17th July 2011, 19:07

Originally Posted by Usarka

What do you think?

Personally i reckon that if we are going to have to pay tax it should be fair. And this means that some members of society shouldn't have an avenue of making money where they don't contribute especially when it's usually the more well-off. It also means that tax breaks shouldn't encourage people to invest in non-productive assets.

I've never given a party vote to labour before (gave them a electorate one once) but if they make this fair, and reduce the paye and company tax a bit to compensate then Labour will definitely be a choice for me for the first time ever come this election.

I expect a lot of opposition from farmers and investment property owners, but that sounds like to me a bunch of people who are having a good run and don't want their toys taken away

In the famous words of Bill Clinton, this could be an interesting erection after all.

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!

**Ocean1** · 17th July 2011, 19:16

Originally Posted by trustme

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!

Complete the set: 55% of the population represent a net loss to the system.

**Usarka** · 17th July 2011, 19:23

Originally Posted by JimO

really, you think someone who has worked hard, taken risks mortgaged themselves to the hilt and accumulated some assets or a few renters, paid tax on the way etc and make a few bucks on selling the renters are as bad as the cunts who dont work cos they cant be fucked getting out of bed and get by on the dole and the odd burg. your obviously a labour voter,fuck them greedy rich cunts eh!!

I've never voted labour, always voted national. But I'd suggest unlike you I'm able to open both my eyes and think about what's good for the country rather than just what's good for me or blindly arguing the line of the party that I normally vote for.

Originally Posted by trustme

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!

I agree, raising the top tax doesn't help their cause and I'd be more supportive if they flattened the tax. But are you suggesting that the scale should be reversed and lower earners should pay tax higher rates???

Income is income. Tax it all or tax none of it.