Taxing inflation
A New Zealand Taxpayers’ Union report claims that two-thirds of forecast revenue from the Tax Working Group’s proposed capital gains tax is created by the proposal’s failure to adjust for inflation. “Michael Cullen defends his proposal on the basis of ‘fairness’ but it is not fair to tax New Zealanders for inflation that they have no control over,” executive director Jordan Williams said. “If the Government fails to fix this aspect of the tax, it will be guilty of a cynical revenue grab. This tax will hit New Zealanders at far higher rates than advertised, it would thieve from those who are not necessarily getting any richer, and it would reward politicians who fail to control inflation with extra revenue.”