Monday, September 08, 2014

Why we need a capital gains tax

The Mana Party's John Minto makes a conclusive case for a capital gains tax:

The minimum wage worker on 40 hours per week earns $29,640 and pays $4,207 in income tax and $4,149.60 in GST giving a total tax of $8,356.60 or 28% of income.

On the other hand the Prime Minister earns $428,000 from his PM’s salary along with this year’s $5,000,000 increase in his wealth (according to NBR’s rich list) which gives him a total income of $5,428,000. On this total income he pays just $132,160 in income tax and approximately $21,400 in GST giving a total tax of $153,560 or 2.8% of income.

This is simply obscene. And what makes it possible is tax-free capital gains, which allow the rich to accumulate and enjoy wealth without any contribution to the society that makes it possible and protects it.

We need to end this outrage. Taxing capital gains will restore fairness to the tax system and ensure the rich pay their fair share.