Monday, July 31, 2006

Bring on capital gains tax

The greens want to set up a property gains tax .
Their proposal is frankly pathetic - not because it goes too far but because it doesn’t go anywhere near far enough.

1) Taxes need to be simple - you can’t say "I will tax houses as long as they are owned by someone who doesn’t own another house". the problem there is that you get a situation where the second house you buy just has to be under the OTHER partner's name the third one under child's name the fourth under another the fifth in a trust of some sort the 100th is easy enough to get away with because the law can't even figure out whether to tax you on any of the others anyway.

2) Not having a capital gains tax on ALL houses is basically a tax on very poor. Owning an investment which isn’t taxed is a big advantage, but poor people don't own houses so it effectively creates and magnifies the gap between those who do have houses and the very poor. This is both inefficient (talking to national voters) and unfair (talking to green/labour voters).

Anyway if the housing market is going to crash anyway maybe we can push this through and slice the top off the housing bubble.


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