Lord Lawson backs Capital Gains increase (radio 4)

brit1234

Lord Lawson backs Capital Gains increase

Here is a link to Nigel Lawson responce to capital gains increase.

He blames the property bubble on buy to let and says that the capital gains system at the moment is encouraging tax avoidance.

http://news.bbc.co.uk/today/hi/today/newsid_8712000/8712540.stm

Heyman_2

Personally I shall be doing everything I can to avoid paying as much tax as possible, clearly millionaire MPs aren't interested in setting any example with their own activities so if it's good enough for them it's good enough for me.

I can't stomach listening to a hypocrite like Lawson who probably employs a Cabal of accountants to ensure the public purse sees absolutely none of his millions.

brit1234

Heyman wrote: »

I can't stomach listening to a hypocrite like Lawson who probably employs a Cabal of accountants to ensure the public purse sees absolutely none of his millions.

Maybe you should listern to the end of the interview before passing judgement. He is very clear on declaring his second home and how he thinks it is right to pay 40% capital gains on it.

JP45

brit1234 wrote: »

...the capital gains system at the moment is encouraging tax avoidance.

I think he's absolutely right. It seems extraordinary to me that it was a Labour government that lowered CGT to 18% and in so doing opened up a whole new world of possibilities for relatively wealthy folk to avoid paying income tax.

As Lawson says, the rates on capital gains should be equivalent to those on income but with the crucial caveat that such gains must make allowance for inflation. To apply CGT without any kind of indexation would be entirely wrong.

Rinoa

brit1234 wrote: »

Maybe you should listern to the end of the interview before passing judgement. He is very clear on declaring his second home and how he thinks it is right to pay 40% capital gains on it.

He is also very clear that taper relief should be applied.

Which it will, unless the rate is substantially less than 40%.

brit1234

Rinoa wrote: »

He is also very clear that taper relief should be applied.

Which it will, unless the rate is substantially less than 40%.

Sorry but I didn't hear a thing on taper relief on this interview. Taper relief goes against the principle he was arguing, have you a link.

Vince Cabel also called Taper Relief unworkable on last nights Any Questions, thats why Labour got rid of it.

Rinoa

brit1234 wrote: »

Sorry but I didn't hear a thing on taper relief on this interview. Taper relief goes against the principle he was arguing, have you a link.

Vince Cabel also called Taper Relief unworkable on last nights Any Questions, thats why Labour got rid of it.

He said there should not be a tax on 'inflationary gains' ~ i.e. there should be taper relief.

It's your link.

chucknorris

Rinoa wrote: »

He said there should not be a tax on 'inflationary gains' ~ i.e. there should be taper relief.

It's your link.

He is absolutely right because otherwise someone could end up paying tax on a purely 'inflationary gain' that could be an actual loss in real terms after discounting for inflation.

Although something akin to the old indexation would be fairer than the taper system which I believe was brought in as a simplification to indexation.

Entertainer

Ahhh Lord Lawson making a reappearance with his idiotic 1988 Budget fallacies.

It's not about second homes.

I've said it so many times before on here but I'll say it again for the slow learners amongst us- capital gains and income are not equivalent because capital gains includes investments where you can lose your money which you never can with income. Therefore, if you tax gains too punitively you deter the investment in said risk assets. For example, if you buy shares in a start up company, you can lose your investment very easily even with a company with good products- they still fail. But if you are lucky enough to win you pay a high rate of tax. Would you take a deal like that? Thus the investment doesn't get made and you get 40% of nothing and even worse you don't get the economic growth and job creation that this country desperately needs. Plus, you can't offset these losses against your income- in some cases they never get used- so Lawson/Cable believe in equivalence but in the next breath they don't believe in equivalence when it suits them. Everyone's equal and some are more equal than others- that's the motto of Saint Vince.

Plus where was/is the tax avoidance that he or Cable talk about- where are the figures- I haven't seen any? It is just guesswork on their part.

This is why every other country in the world has rates of 15%, 20% or even 0%.

Lawson's 88 Budget and his continuing support for it now demonstrates the economic illiteracy of politicians and I'm disgusted that the BBC can't manage to pose the few basic points I have made above to him.

carolt

Entertainer wrote: »

This is why every other country in the world has rates of 15%, 20% or even 0%.

Sounds unlikely.

Do you have a link for this?

Entertainer

carolt wrote: »

Sounds unlikely.

Do you have a link for this?

http://www.telegraph.co.uk/finance/personalfinance/capital-gains-tax/7778729/Capital-Gains-Tax-Britain-would-have-highest-rate-in-western-world.html

Of the 30 leading countries who are members of the Organisation for Economic Co-operation and Development, not one has a rate higher than 30 per cent, if citizens have held on to their assets for at least three years.

The average rate is just 15 per cent, with many countries not levying the tax at all.

Peter Young, of the Adam Smith Institute, who compiled the data pointed out that many countries, including Austria, Belgium, Switzerland and Germany function perfectly well – and raise plenty of tax revenues – without having a capital gainst tax.