Have a look at the film series to see how well Gerry and National did(n't).
Christchurch is still suffering from the mess National made.
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National getting back into the dirty politics - what they are best at
Judith Collins apologises over 'misleading' ad after Speaker forces National to take it down
https://www.nzherald.co.nz/nz/news/a...ectid=12361357
CGT exempting the family home would be ridiculous; yet when, if ever, CGT is introduced in NZ, that is what we will end up with. Nothing wrong with a properly designed CGT. Everything wrong with a half-baked scheme, especially when designed especially to appease envy.
As long as inflation is also accounted for those who only earn wages and salaries. Taxing income below the amount of income needed in order to keep an individual alive, whilst allowing capital gains to remain tax free, is illogical and reflects a current system based on vested interests.
Instead of inflation adjustment, perhaps it would be easier to implement a CGT based on a good threshold before taxing both Capital gains and income. Different asset classes have different inflation rates.
Allowing an exemption for the family home makes no sense. Perhaps there could be a concession for the family home insofar as the unused part of any annual tax-free allowance could accumulate and be finally off-set in the period in which the family home is sold.
As FP said, basing a tax system on envy or vested interests is inefficient in the long run. All forms of income and gains should be treated equally by the tax system.
Then the government of the day could make the political decisions as to which sectors or groups of people it would subsidise.
For the record - I was in favour of a CGT.
The devil, though, is in the detail. Such as excluding the family home, taxing all gain even that which is due to inflation.
Some time ago I built a house for $300k (including land).
9 years later I sold it for $630k and built another much the same. Total cost (including land) - $625k. No gain there.
Would that be the Red Zone - that act from Brownlee that the court finally ruled illegal (paying only half the value).
Much like you felt that the Govt had an obligation to business because they forced them to close (with the lockdowns) if you force someone from their land you have an obligation to them - insured or not. Or maybe that only applies to Labour govts?
Agreed. But this is the theory.
Any income tax is easy to implement and difficult to avoid.
Any consumption tax (like GST) is easy to implement and difficult to avoid.
Any CGT however is difficult to implement and easy to avoid. No matter how you design a CGT, it always would be unfair to some people ... and anybody with enough money to pay a good tax accountant will find plenty of loop holes to avoid it (using trusts, companies, overseas assets, ...). As well, the effort to make it at least acceptable is much higher than the income through said CGT. While most countries do have a CGT, am I not aware of any country where a CGT contributes in a material way to the countries income, and this is not even accounting for the additional cost which both taxpayers as well as IRD have to carry to collect this tax.
I don't know whether it would be possible to define some sort of fair to everybody CGT (I doubt it) - but it certainly would not be efficient to implement. I would not want to see a tax created where the collection costs taxpayers and IRD more money than it returns.
Maybe a system of stamp duties levied on disposal and acquisition of assets, in the same way as GST is levied. Easier to levy but not as equitable as introducing a general CGT. But it would help address the gap in the system that currently concentrates on taxing income and consumption.
Does this seem simple:
GST guide (48 pages) +
GST adjustments (20 pages)
https://www.classic.ird.govt.nz/reso...ir375-2019.pdf
https://www.ird.govt.nz/gst/gst-adjustments
GST needs it's own special tax return it's so complicated. I imagine a CGT would be included in a standard income tax return, very simple which is why every country has it.
Though maybe inflation needs to be accounted for in some way.