What Labour should have done is demand that the income tax and capital gains tax rates be aligned.
But if it is true that corporation tax falls only upon capital then to align the total tax rates on both then the CGT rate must be lower than the income tax rate.
Stumps, eh?
Ritchie wasn’t so worried about low CGT when he got an effective 10% rate when selling Murphy Deeks Nolan….
http://www.t*xresearch.org.uk/Blog/2010/08/06/ireland-undermines-investment-in-south-africa/comment-page-1/#comment-578728
Only if your intention is to have a level playing field for tax rates.
If your intention is to ‘soak the evil 0.3%’, as we can reliably assume the LHTD’s intent to be, then “equalising the rates” is merely a good bit of misdirection.
Today I have proposed a statue to Robert Maxwell, perhaps the leading economist of the 20th Century.
The rationale for different tax rates is that the activities are different. Capital gains tax is levied on capital which to some extent may have been risked, whereas the capital which produces income is generally guaranteed.
So if CGT is aligned with Income Tax in the hypothetical ‘Curajus State’ He is looking for CGT of 99% top rate (his sums require a base rate of 90 – I have no idea if there will be gradations between 91 and 99) as well as Income Tax at that level – barking doesn’t even come close – the guy is an absolute lunatic who really needs to be bundled into a plane bound for Pyongyang with some urgency…..
VP, why assume he’ll stop at 99%?
Richard – I am assuming we all by the ‘Cappucinos’ he uses as a metaphor in ‘The Curajus State’ and in order to do that we need 1% – my children have prevented me reading ‘The Joy of Tax’ thus far so have no idea what his current fetish is….