Even the IMF Thinks We Need a Capital Gains Tax

New Zealand’s disturbing levels of inequality will only deepen unless all candidates contesting this year’s election commit to a tax system that treats income and wealth fairly, Peter Malcom of the income equality group Closing the Gap said today.

One immediate need is a broader capital gains tax, which even the IMF has called for, he said. The IMF argued in its recent 6 March “mission statement” that such a tax would help shift investment money away from property.

“That comment was underscored by yet more reports of houses being ‘flipped’ for quick and easy profit — profit for the speculators; homelessness and unaffordable housing for everyone else,” Mr. Malcolm said.

The IMF’s Global Housing Watch shows New Zealand as having the world’s fasted growing gap between housing prices and incomes.

“The tax system needs a complete rethink, and it’s heartening to see some political parties raising the issue,” Mr. Malcolm said. “But we need more discussion as well as firm commitments to do more through the tax system to level the playing field for all New Zealanders.”

As well as a capital gains tax, Closing the Gap would like to see a more steeply progressive income tax; fairer executive pay levels that are either capped or tied to median worker pay; and possibly a wealth tax.

“All people need enough to thrive, not just survive,” Mr. Malcolm said.

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