I agree with you. Thanks for taking the time to reply with something meaningful. It's not an area I'm really familiar with so it's great to hear other opinions and learn about different perspective.
I think by adding CGT, you increase everyones tax liability a bit, so by reducing income tax, you'd ensure that everyone was basically in the same place, except for people who were abusing the system in the first place.
I'm not an accountant so I should just defer to those who know better :)
Yeah, that's a fair enough approach. I don't necessarily want to increase the overall tax burden, just distribute it more fairly. Ideally the policy mix should put such downward pressure on prices that people end up paying very little in capital gains taxes.
I don't think offering an offset for capital gains tax is the right thing to do though; you're still essentially taxing capital gains at a lower rate, e.g. someone that earned a 100k from their job would pay more than someone that earned 50k from their job and 50k from capital gains. Instead the income tax brackets could be adjusted to account for the new income stream such that the total tax take remained the same, then both 100k earners would pay the same rate but on average nobody would be paying more.
Not sure if you're Kiwi or not, but TOP had a very interesting tax policy this election - http://www.top.org.nz/top1 - along those lines, no increase in tax take but a massive change to where it comes from, which would have meant large income tax reductions.
I think by adding CGT, you increase everyones tax liability a bit, so by reducing income tax, you'd ensure that everyone was basically in the same place, except for people who were abusing the system in the first place.
I'm not an accountant so I should just defer to those who know better :)