Friday, July 08, 2011

Labour's CGT goes broader

Last night, Labour leaked more detail about its capital gains tax plan, letting us know that it would apply to farms, businesses, and sales of shares, as well as investment properties. The usual suspects are already screaming, saying it will be a "barrier to investment" and threatening capital flight. But this is the norm in practically every other country in the world, and as with investment properties, you can't take it with you when you go. Which makes their threat rather empty. If they leave or sell up, they'll sell to someone else. That'll be 15% please.

Meanwhile, John Key [video] - whose $50 million net worth and large share portfolio means he is hardly an uninterested party - calls it "crazy", and claims that it is taxing productive investment. Well, we do that already with wages. But I guess that Key thinks we're just unproductive.

Again, at the end of the day, this is about fairness. We pay taxes on wages. We pay taxes on business profits. Why should John Key not pay tax when he sells his shares, or one of his investment properties, or a farm? Why should he avoid paying his fair share?