Capital Gains Tax

Hey Readers

Worried about Capital Gains tax and thinking it’s new?

Seeing it as the end of our Kiwi way of life or to quote Soimon, the fearless leader of the opposition, “the end of our Koiwoi woy of loife”?

Well its not new at all. In fact, all those nasty developers who buy land, invest money on roads and services to produce sections then either build houses on the sections for sale or just sell the sections, well they have been paying GST and tax on their profits for years and that is a capital gains tax. What is new is that those sneaky types, (often school teachers and others including politicians, all paid by taxpayers) who buy a house, do it up and sell it in the same market as the nasty developers will now also have to pay GST and tax on the profits.

So what’s wrong with that?

Think about the poor old retailer who buys goods, displays them in stores, then marks them up and sells them, hopefully at a profit. Well they pay GST and tax on the profit. This is an existing Capital Gains tax.

Farmers who have been farming for the capital gain, rather than profits, (which have eluded many who basically paid too much for their land), might well have to contribute finally via a tax on the profit on selling the farm. This might bring down the price of farms so new entrants might farm for profit.

So what’s wrong with that?

New tax raised from Capital Gains tax will be offset by a reduction in tax on those relying only on income.

So what’s wrong with that?

One of the few actual moves by the last National government was to introduce the Bright-line test on house resales which effectively was the introduction of a capital gains tax.

Where was Soimon on that?

All these seem sensible measures to ensure a fair and even tax system, which recently received useful help by dragging big, mainly American owned multinationals into paying at least something. How come so many of my colleagues (and sadly me) paid way more than Uber and Facebook running relatively small businesses?

So far media commentators have included TV weather readers, radio shockjocks, rental home owners wishing to avoid fixing their houses and start-up owners yet to make a profit. Pullease! Can we hear from dispassionate informed economists and successful business people whose companies are robust enough to face a fairer tax system.

Let’s hope we can have mature debate on this rather than the hysterical self interest from well-heeled tax avoiders.

Editor

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