Stop messing with GST and start investigating a CGT

The Tax Working Group currently toying with GST proposals needs to spend more research time looking at why New Zealand is the odd one out in the OECD over Capital Gains Tax, Green Party Co-Leader Dr Russel Norman said today.

Earlier this week Dr Norman wrote a letter to Finance Minister Bill English suggesting the Government urgently looks at introducing a Capital Gains Tax – excluding the family home.

“A Capital Gains Tax – that excludes the family home - will raise revenue for the Government while discouraging a resurgent housing bubble,” said Dr Norman.

“The housing boom of the last decade saw many New Zealanders shut out of home ownership, pushed up interest rates and failed to deliver tax revenue to the Government.”

Dr Norman said it was time the Tax Working Group and the Government started giving serious consideration to a Capital Gains Tax – a tax that is found in most OECD countries including the United States, the United Kingdom and Australia.

“The Finance Minister has stated he is ‘sceptical’ about a Capital Gains Tax while the working group he has set up is busily investigating raising GST,” said Dr Norman.

“It’s time Mr English became a little more sceptical of some of the ideas floating out of his Tax Working Group.
“Any moves to raise GST would hammer those in the lower and middle income brackets and likely send New Zealand into a deeper recession.

“For most New Zealanders even a small rise in GST will wipe out any financial advantage they may have gained in last December's tax cuts.”

Link to Dr Russel Norman’s letter to Bill English
http://blog.greens.org.nz/2009/08/17/beat-the-bubble-before-it-beats-you/