Either of the Tax Working Group’s proposed taxes on capital would damage investment, says the New Zealand Taxpayers’ Union.
Taxpayers’ Union Economist Joe Ascroft says, “One of New Zealand’s key economic challenges is the lack of entrepreneurial capital – why would we tax that?”
“New Zealand benefits when savers take a risk and invest their money. Investment in capital allows workers to be more productive, lifting incomes over time.”
“A capital gains tax on productive commercial investment would undermine investment and wage growth, while an ‘RFRM’ equity tax that excludes the family home just encourages New Zealanders to pour hundreds of thousands of dollars into their house, while avoiding investment in the sharemarket or local businesses. It’s a recipe for a strange world where home-owners build mansions, but entrepreneurs struggle to attract investment and grow their businesses.”