Matt Grudnoff

You've made a $300,000 capital gain.

Now, normally, if you weren't $300,000 as wages or interest or dividends on shares or however it might come,

you'd pay your marginal tax on that.

You'd pay your tax on it.

But if you earned it as a capital gain, we give you a special 50% discount.

So what the tax office says is, let's pretend of that $300,000, half of it doesn't exist.

We'll only pretend you made $150,000 and we'll add that $150,000 to your taxable income.

And then depending on how much other income you earned, you'll have to pay tax on that.

So it effectively halves the tax rate on capital gains.

I think that they should definitely just get rid of it.

They probably won't go that far, but I think that capital gains as a form of income should be treated like any other income.

Why should we be encouraging people to earn income as a capital gain as opposed to, say, going out and working or running a business or earning income from shares or earning even money from interest in a bank account?

Right now, all of those forms of income, you pay a certain rate of tax.

And for some reason, only for capital gains, we halve it and you pay half as much tax.

So I think it should be treated like every other form of income.

But there are rumours, there's rumours that they might reduce it to 33%.

So rather than it being 50%, halving it, they'll only take 33% of it.

So going back to that $300,000 capital gain, they would pretend only 100,000 of it

didn't exist and they would tax you on $200,000.

The other way, which is probably a better one, is they'll go back to the old way before the capital gains tax discount came in.