Quote:
Originally Posted by Pierre
Looks Capital Gains is going to cop it.
There’s already a risk associated with investing.
So you invest your cash, and if you invest it wisely they’ll take more off you.
So if you invest it and lose it all, I doubt they’ll come and compensate you.
So then less people will be inclined to invest in the economy………….genius. There’s a policy for growth right there!
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If you own a small business - or even a somewhat bigger one - you can choose to pay yourself mostly or almost entirely in share dividends. This income is taxed as capital gains at a far lower rate than income tax.
And yes, if you make profits some years and losses in other years, then you can offset your losses against your profits to reduce your tax bill - in that sense they absolutely do ‘compensat’e you.
Well-off business owners with wily accountants are legally avoiding significant amounts of tax by being able to choose the way their income is taxed in the way a regular PAYE employee can’t. It’s a loophole that needs closed on a point of principle and which will bring more money into the exchequer into the bargain. It’s hard to make a direct comparison but federal income tax and capital gains tax rates in the USA, for example, are much more closely aligned than they are here, and the USA has a far more positive attitude towards capital investment than we do.
If aligning our income tax and cap gains tax rates causes investment here to plummet then we have far deeper problems than a tax rate.