The good news and the bad news on capital gains tax

Digital image credit: Pixy1

The good news is the tax working group hasn’t recommended the implementation of a capital gains tax and the bad news is Grant Robertson really, really, really wants one: Quote:

The Tax Working Group is understood to have stopped short of recommending a broad-based capital gains tax in an interim report, but Finance Minister Grant Robertson has played down its significance.

The working group chaired by Sir Michael Cullen was tasked with designing a capital gains tax for consideration by the Government, but is believed to have pushed back any firm recommendation until it publishes its final report in February.

Robertson confirmed the Government had received the interim report which he said would be released soon.

But he said the work was “always supposed to be a two-stage process” and commentators were “getting a bit ahead of themselves”.??End Quote:

I know who’d I’d trust with my finances and it isn’t Grant Robertson. If Michael Cullen can’t see a way to make it work and realises that it has never worked anywhere in the world, then it can’t be done. Quote:

National Party?finance spokeswoman Amy Adams said it had?been?proved?right that a capital gains tax made?”no sense” and was not a magic bullet for housing affordability.

The lack of a recommendation in the interim report would not be surprising, she said.

“We have been saying all the way through that a CGT would not achieve what the Government is setting out to achieve,” she said.

“It would be very interesting if the Government’s own hand-picked tax advisory group was not able to deliver to the Government the one thing that the Government has been suggesting is the panacea to all ills.”??End Quote:

You don’t have to look very far to find out that a capital gains tax doesn’t deliver what the left-wing thinks it will deliver. Quote:

It had been widely expected that the Tax Working Group (TWG) would recommend a broad-based capital gains tax on the likes of sharemarket and property investments as the centrepiece of tax reforms on which Labour would fight the next election.

However, doubts began to creep in earlier this year that the Government would ultimately back the plan, amid concerns the new tax would be unpopular and would cause rents to rise without delivering much in the way of extra revenue for at least a decade.

Deferring the matter back to ministers would appear to amount to a recognition that changes to the tax system are too “political” to be outsourced to an expert group. End quote.

I really hope Labour intends to fight an election on capital gains tax. I really do.