Capital gains tax gets ticked from most – but not all – Tax Working Group members



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The Tax Working Group has reached a consensus on introducing a capital gains tax, but the chairman of the working group, chairman Sir Michael Cullen has revealed.

"We have got to the point where we have a central package around the extension of capital income tax which is supported by a clear majority of the 10-person working group," he said.

Cullen said that the minorities who had not backed up were "mainly about some aspects of how you do it, rather than whether you do it".

But he indicated there could be water to go under the bridge before any changes were adopted and enacted by the Government.

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LAWRENCE SMITH / Stuff

Jacinda Ardern on talks on capital gains tax will be introduced.

NZ Labor Coalition partner First, it has to be made to support legislation enabling a tax capital gain before the election, that would come into effect after the election.

Finance Minister Grant Robertson said the Government had "not received the final report yet and had no decisions had been made".

Cullen commented on opinions about a capital tax that he was "actually quite perplexed".

"The majority of the population has some form of capital income tax but it is not necessarily clear that you can win election on that base.

"What people oppose motivates them more than what they support. That is why all American politics is now negative."

Extending taxation on capital gains is popular, but it doesn't mean it's good election policy, says Sir Michael Cullen.

TOM PULLAR-STRECKER / STUFF

Extending taxation on capital gains is popular, but it doesn't mean it's good election policy, says Sir Michael Cullen.

Speaking at the event hosted by Victoria University in Wellington, Cullen said "last chance saloon" for capital gains tax because of politics would be harder as New Zealand's population aged.

"There is no point in 20 or 30 years' time, when demographic changes occur, because it will be even harder because there will be an older electorate that is even less likely to support changes in capital income. taxation.

"This is the 'last chance saloon' in many ways for any significant change in this area."

Cullen also revealed the group was on track to publish its final report by the end of January – a month ahead of schedule.

Sir Michael Cullen says the Tax is a month early.

ABIGAIL DOUGHERTY / STUFF

Sir Michael Cullen says the Tax is a month early.

Cullen said that the working group discussed the alternative options of inheritance tax, despite the instruction from Finance Minister Grant Robertson that should be off the table.

"We are not supposed to be looking at inheritance, but the Tax Working Group appears to have found a partial way around that," he said.

Bill Rosenburg's Council of Trade Unions economist, also speaking at the event, said New Zealand had a problem with quality that the Government had asked to address.

"New Zealand's tax and income support systems would need a major work to reduce capable of New Zealand's high inequality," he said.

He questioned why the income was not taxed when other forms of income were.

John Payne, head of tax at the NZ Super Fund and convener of the Corporate Taxpayers Group, said he was concerned by the "collateral damage that might come from taxing capital gains.

He also questioned the impact on "productivity, entrepreneurship, risk-taking and aspiration".

"From what I have seen, compliance costs are going to be very significant.

"The Tax Working Group is likely to be divided. It was prominent this morning the only unanimous thing is the group seems to think there should be some taxation of capital income going forward," he said.

National Party finance spokesman Amy Adams said he had "clearly worked hard to convince the majority of members to support the proposed new tax".

"The Government has already signed its appetite for the new tax, one of the most important policies that are driving up, including extending bright online tests, ring of losses, more regulations and the ban on foreign investment," she said .

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