Q+A with Jack Tame Expert on capital gains tax fairness, pitfalls of wealth tax
14 snips
Oct 4, 2025 Michael Keen, former Deputy Director of the Fiscal Affairs Department at the IMF, discusses crucial tax issues in New Zealand. He advocates for a comprehensive Capital Gains Tax, arguing it promotes equity and aligns with income tax principles. Keen praises New Zealand's GST system while cautioning against high corporate tax rates that could hinder productivity. He also explores the practical challenges of wealth taxes and emphasizes the need for fair tax systems that address inequality.
AI Snips
Chapters
Transcript
Episode notes
Leverage GST To Raise Revenue
- Use New Zealand's broad GST as an anchor for revenue increases by adjusting the rate.
- Moving to European VAT levels could raise around four to five percentage points of GDP.
Incoherence In Capital Gains Treatment
- New Zealand's current capital gains treatment taxes some gains but leaves many out, breaking coherence with income tax principles.
- A consistent approach would include all gains by default and carve out specific exemptions.
Accrual Vs Realisation In CGT
- Taxing accrued (unrealised) gains aligns with comprehensive income but is rarely used due to practical difficulties.
- Realisation taxation creates hold‑on incentives and lets wealthy asset owners access lifestyles via borrowing against unrealised gains.