Whale Oil is unhappy with Bill English mentioning a capital gains tax. Specifically he says:
In times of recession it isn’t that the government should be looking for more taxes.
But there are two reasons why I think Bill English is correct at the moment.
- Bill English appears to be saying that he wants income to be taxed more broadly to remove the “incentive” to shift income into housing. As a result, he is saying that he wants to broaden the tax base, which implies that they can improve incentives and REDUCE other taxes.
- During a recession we could “stimulate activity” by saying we will increase taxes IN THE FUTURE. This isn’t what he is saying, and I’m not saying it is a good idea, but it is another potential way of viewing things.
Ultimately, there are incentive problems with the tax system and when Bill English says he is interested in a CGT it is because he realises that these problems exist and that they are causing structural imbalances. Good on him for being brave and admiting he is willing to do look at these difficult issues.