How the CCIT works

Gareth MorganTax and Welfare8 Comments

This infographic explains how my tax proposal would work in practice. Hint: it is NOT a capital gains tax

CCIT_Infographic_v5

How the CCIT works was last modified: June 14th, 2016 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.

8 Comments on “How the CCIT works”

  1. What are the implications for someone who is asset rich but income poor? e.g. retired with a holiday home?

    1. Firstly, it is tax on assumed income gained from appreciation of asset. It is not a tax on the initial capital value. Tax accrues, to be realised when asset is sold, to some degree off-set by any capital valuation gains in the interim (hope I remember that correctly, feel free to correct any details). Thoroughly recommend reading GM’s Big Kahuna book to understand how this works as part of an overhaul of the entire tax and welfare system.

    2. The Dutch tax private housing at a deemed value increase of 4% annually. This is calculated as part of your annual return. Allowances (deductions) are made for mortgage debt and there is some minimum house value before it activates, but it is not very high compared to typical values. The result is that people calculate the benefit of not paying off the mortgage compared to paying the tax…

  2. What if (e.g a retiree) you have a large asset base and enjoy the use/unrealized gains. But are not earning a cash return and have little income. Inorder to pay this tax you may be forced to sell assets. Assets are not valued at the rate of cash return.

  3. ‘Assume’ makes an ‘ass’ of ‘u’ and ‘me’.

    You can’t tax someone on the basis of an *assumption* about their income. You can only tax them on the basis of their ACTUAL income because you can only PAY tax with ACTUAL money!

  4. Do you have any projections of tax income from your CCIT? Would this mean a % decrease for PAYE contributors?.

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