One of the latest stories doing the rounds, according to the article below, is that the Capital Gains Tax (CGT) Labour are looking at introducing will be a very "light" one targeting mostly second properties such as rentals and holiday homes.... think of it as an extended brightline tax but including baches and for all second/third/fourth etc properties regardless of how long they are owned. The hardsell they'll have is to the left of the party and to their potential coalition partners is it looks as if a wealth tax has already been dismissed.... Labour like the idea of taxing a lot many people at lower rates with a CGT than targeting a few which could be seen as a "tax of envy" like a wealth tax could be seen as.
But, one of their main problems with selling their proposed CGT is that they've been told by both the IRD and tax consultants that they can't have a CGT and not allow landlords to claim their interest on mortgages as it effectively taxes people twice.... so, it looks like the so-called tax breaks for landlords will stay. And that will be an easy target for the current government parties at election time.... Labour spending so much energy attacking the changes brought in by the current government as a tax break for landlords and then having to allow it if Labour wants to bring in a CGT. Has anyone noticed that the mention of "tax breaks" for landlords from the likes of Renney and Hickey has reduced a bit lately?
There's also other speculation going around, not in the article below but on FB, that Labour isn't going to campaign on a wealth tax for the next election but will allow one to happen in order to form a government with either support from the parties on the left or in coalition with one or both of them. That way, Labour can't be held 'responsible" for it.... even if some in the party do want it.
Labour's other problem that they are the champions of a "progressive tax system" yet a wealth tax is seen as more "progressive" than a CGT.
Labour's main hope, it would appear, is that the electorate is too sick off National's cut and burn policies and elect Labour without giving much thought to a CGT or Wealth Tax as a protest vote against Luxon, Winnie and Seymour.
Watch this space folks because there's going to be a lot of backtracking taking place before the next election as Labour try to sell their tax policy to the electorate.... especially when the two other parties on the left constantly dismiss a CGT in favour of a wealth tax.
OPINION: What's the party's new tax plan – and who is designing it?
www.nzherald.co.nz
www.nzherald.co.nz
