As soon as the Tax Working Group released an interim report that considers how to implement a capital gains tax in New Zealand, experts were paraded on the mainstream media to say how such a tax would solve all our economic problems.
The report also considers taxing owners for the unpaid work they do on investment property. See https://taxworkinggroup.govt.nz/resources/future-tax-interim-report
Capital gains taxes in numerous other nations have not solved the problems that are expected to be solved here. All a capital gains tax does is collect another form of tax.
Intense debate prompted the Taxpayers’ Union to launch an “axe this tax” campaign, and Tax Justice Aotearoa to launch a poorly-supported billboard campaign.
But it all ended on the afternoon of April 17, 2019, when Prime Minister Jacinda Ardern ruled out the introduction of a capital gains tax in New Zealand while she was Labour leader.
She failed to get the support of coalition partner, Winston Peters’ New Zealand First party, long-time opponents of a capital gains tax.
Right up until the end, the Prime Minister was still saying that only a very small percentage of New Zealander’s would be affected.
These assurances were not based on facts.
There are around 250,000 owners of rental property, 200,000 lifestyle block owners, 250,000 bach owners, 600,000 small and medium-size businesses, and 1.2 million kiwi savers in New Zealand.
It soon became apparent that a capital gains tax was supported only by those who didn’t think they would have to pay it.
When one poll found that 90 percent of kiwi savers objected to having to pay the tax, it was only a matter of time before some savvy politician would pull the plug on it.