Stephen Knight

No,

no, no, no.

There's only one type of income, which is what you get paid into your bank.

And they're saying, oh, well, well, you know, the increase in value of businesses and properties, oh, that's economic income.

Well, no, there was no income because nothing came into your bank account.

And so I think, okay, you can come up with these fictitious percentages and tax rates based on imaginary income over a very small time period while we ignore some other factors.

But actually, I appreciate what you're trying to do, but I'm not buying it.

I'm surprised you're not buying it.

You just probably don't want to pay your GST tax either.

Now, my last argument I've got to say is that a capital gains tax is very, very easy to avoid, right?

The way you don't pay your capital gains tax and the system is you just don't sell the property or you don't sell your business, you don't sell your asset, and then you don't pay the tax.

And so what we've seen is that a capital gains tax actively discourages people from selling their assets.

And what that means is that capital and money and wealth can get stuck in the wrong places.

So let's say you've owned a property for a long time.

It's gone up in value.

In an ideal world, you'd like to sell that to invest in a business.

Well, if you've owned that for 20 years, it's grown in value.

Selling that property, if there's a capital gains tax in place, could mean a massive tax spill.

And so you think, OK, even though I could have a better use for that money, I'm not going to sell that property even if a better investment comes along.

And this is what us economists call the lock-in effect.