SaltyNZ:MikeAqua: The trouble with wealth tax is that wealth isn't always liquid.
If someone owns substantial non-cash wealth but has low income how do they pay their tax? They would have to borrow to pay it, or sell those assets.
I thought the government was actively trying to discourage having lots of wealth tied up in non-liquid assets, like, for instance, having 5 rental properties, because it would be better invested in something that generates benefits to the economy. So in that respect, such a tax would move things in the direction our nominally right-wing government wishes things to go, no?
A capital gains tax is paid when profits are realised, e.g. when you sell your securities or investment property and make a profit. I really feel it's a no brainer, as it would also help cool down the housing market- currently one of the main causes of inflation in NZ and therefore interest rates.