Capital Gains tax nonsense

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I actually can’t believe I have to publicly talk about this because anybody doing 5 seconds of research will see that it is a ridiculous argument.

We are once again being told that a capital gains tax on investment property would keep house prices down and should be considered as an effective anti bubble and affordability strategy.

So if you were a policy maker and thought of this then the first thing I would do is look at the countries that had CGT on property to prove my theory before I opened my mouth in the media, wouldn’t you??

And a sensible man would look at several markets to see if this effective price control worked right?

Ok so lets pick the USA, they have CGT, and the UK and our nearest neighbour Australia.  If there was the tiniest bit of sense in the current CGT debate we should see that house price growth has been effectively muzzled in these nations.  That would be the proof that this might be a good idea.

Never let the facts get in the way of a chance to be on TV I guess.  Only the USA has had lower growth than NZ.  And their housing market did fine in the global recession didn’t it??     Hello??

And our closest neighbour both geographically and politically etc. has had the highest growth.  So introducing a capital gains tax into New Zealand, based on the last 20 years of data available from other countries is most likely to INCREASE house prices even more and the evidence of it controlling affordability is around zero, zip, nada.

As traders and developers already pay income tax the increased revenue is not going to be as great as anticipated but revenue gathering would have to be the only possible reason for floating this idea.

Look at that graph again.  Promoting it as an affordability control is just drivel.  As I said I can’t believe it is being talked about seriously.

Our real issue is of course our low wages compared to all our neighbours but no one knows how to solve that yet, easier to pick on housing.

You can see how bad we are when you look at our income per person in NZ measured against our countries GDP. LINK

You will note that basically only 3rd world and banana republics are below us.

Stay Inspired and Stay Safe ~ Dean Letfus @ www.MassiveAction.tv

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