A big thumbs down to Goff's CGT. Taxing capital without a comprehensive review of our whole tax system is both dumb and dangerous. Even more dumb is to begin your election campaign by promising more tax.
It couldn't be a worse time than the present to talk about taxing assets, especially property. Since the global financial crisis, NZ home and farm values have been treading water, kept alive mainly by the grace of the Australian banks in controlling the rate of morgagee sales and Mr Ben Benanke's money machine keeping global interest rates artificially low. We've been collectively kicking the can down the road seeking time for rising incomes or inflation to restore some semblance of balance. So far the strategy has worked but it is highly at risk should unemployment or interest rates rise.
Along comes goofey Goff and his mates who think they can fix the original property bubble by a new tax long after the horse has bolted. They'll fix it alright! The tax will likely destroy market confidence and unleash a wave of deflation of house and farm values. Look at what is happening in the USA and then consider how inflated the ratio of income to house values is in NZ. What would a 30 - 50% drop in values do to our economy. Those most affected will be the labour supporters themselves, and the battlers, as they struggle with their underwater mortgages.
I'm not against comprehensive tax reform but Labour's policy is a very dangerous attempt to harness the green eyed monster of the left.
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