Abolish capital gains tax.

[timcowlishaw]

Maybe a contentious one (and I'm perhaps being a terrible entryist trot here :-)), but I'd quite like to have a serious debate around why cap gains are taxed separately to income.

In my view, the seperation between the two is purely an ideological one, based in the capitalist assumption that 'wealth creators' should be especially rewarded for creating economic activity and therefore employment. A claim which I've never actually seen any real evidence for. If anyone can provide some, please do!

There's also practical reasons for this. Treating earning income as capital gains is a common tax-avoidance technique, and this would close that particular loophole in one fell swoop, as well as simplifying the tax system overall).

[Floppy]

I'm all for simplification of the tax system and closing loopholes, but I don't feel knowledgeable enough in the area to vote on this yet. Anyone else?

[stringfellow]

Ditto, would love to know more about the difference. Can you link us up to some facts and studies? (Both sides of the argument if possible)

[timcowlishaw]

No problem at all, will look something out this week!

[PaulJRobinson]

Sorry I'm not onboard for this one. Apologies if I'm 'teaching granny to
suck eggs' etc but Capital Gains Tax is levied on any profit an individual
makes from the growth in value of an asset, at the point at which that
asset is sold. That could be a company, shares, a property, a Van Gogh
masterpiece, a classic ferrari. So the tax ensures that those people who
are already wealthy, and have invested that wealth in assets they think
will grow, are taxed on any profit they make when they sell their
investment. If their asset falls in value, there is no Capital Gains Tax to
pay.

It is a brilliant tax that ensures people who haven't 'earned' their income
through hard work and graft each day (they could sit and watch telly and do
nothing whilst their assets rise in value), make a contribution.

Income tax though, is a tax that targets people who go out every day and
graft. The harder you graft, the more you earn, the more you pay.
Personally I think people who work extremely hard should be encouraged to
do so.

That's why I'm not in favour of this PR. Sorry!

with kind regards,
Paul Robinson

about.me/pauljrobinson

On 13 January 2014 08:07, Tim Cowlishaw notifications@github.com wrote:

No problem at all, will look something out this week!

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[Floppy]

Is the upshot of this PR not that capital gains are taxed at the same rate as income though, not a lower rate as it is now? I agree with taxing capital gains, but I think the idea here is that it's taxed just the same as income.

[PaulJRobinson]

But they shoudn't be taxed at the same rate. Capital Gains should be taxed
more than Income that has been 'honestly' earned. That won't happen if they
are merged, or if Capital Gains is abolished.

with kind regards,
Paul Robinson

about.me/pauljrobinson

On 13 January 2014 09:10, James Smith notifications@github.com wrote:

Is the upshot of this PR not that capital gains are taxed at the same rate
as income though, not a lower rate as it is now? I agree with taxing
capital gains, but I think the idea here is that it's taxed just the same
as income.

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[timcowlishaw]

aah, @PaulJRobinson makes an excellent point. Perhaps we could change the proposal to "harmonize the rate of capital gains and income tax, and pool their allowances, to ensure that work is incentivised at least as much as investment". This gives us scope to increase CGT > Income later on if we wanted too. (I'd probably be in favour of a higher rate of CGT than Income to be honest, but I don't yet know if the openpolitics consensus is as far to the left of centre as I am, and in spite of jokes I might have made on twitter, I'm trying not to be a one man entryist trot tendency here :-)

[timcowlishaw]

If we are all grizzled old reds though, bring it on, obviously! :-)

[Floppy]

That wording seems to reflect the general consensus more, yes. Want to update your proposed change?

[philipjohn]

I like the current wording on this one, the harmonisation route makes
sense. We should also be careful not to penalise people for making the
choice to earn a living through assets, given it's probably where they've
found they have skills and it isn't inherently a dishonest way to earn
(antiques dealers come to mind).

[Floppy]

We may have reached consensus here - can we get some votes? I'm a 👍.

[timcowlishaw]

Obviously a 👍 from me

[PaulJRobinson]

Sorry I'm 👎 as I prefer taxing unearned wealth over earned income so I don't wish to abolish CGT.

[Floppy]

@PaulJRobinson have a read of the current changes - it's more about harmonization of rates than abolition. The title is misleading. The current text is "The rate of capital gains tax for individuals will be harmonized with the rate of tax on earned income, and all allowances for each will be pooled, in order to ensure that work is rewarded and incentivised to the same extent as investment."

[Floppy]

@timcowlishaw might be worth updating the PR title here.

[PaulJRobinson]

Sorry you're right I was focussing on the title. 👍

with kind regards,
Paul Robinson

about.me/pauljrobinson

On 29 January 2014 09:30, James Smith notifications@github.com wrote:

@timcowlishaw https://github.com/timcowlishaw might be worth updating
the PR title here.

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