Press Release
Stephen Berry
Taxation

Dealing With Housing Market Investment Distortion

Tamaki Independent candidate Stephen Berry earlier this week outlined his opposition to Labour’s planned Capital Gains Tax. “What the media has failed to report, is the other options the Government has available to remove the economic distortion toward investment in housing that is caused by not having a Capital Gains Tax.”

“Economists state that one of the reasons for the housing bubble is because housing is not taxed in the same way that other areas of investment are,” says Mr. Berry. “I am inclined to agree with them but still believe that the implementation of a Capital Gains tax is not the right way to deal with this investment distortion.”

Mr. Berry advocates an option that has been completely ignored in this debate. “Why don’t we reduce taxation on all other forms of investment before eventually eliminating it? It stands to logic and reason that such a step will have exactly the same effect of fixing this distortion as a new tax will have, without increasing the size of Government!”

Stephen Berry believes the mindset of politicians and New Zealanders needs to move from regulating our problems away. “The answer to a problem caused by regulation is not more regulation. The historic evidence in democracies around the world is that regulation causes problems that politicians try to fix with more regulation which causes more problems which politicians then call for more regulations to fix!”

“Instead of using more regulation to deal with market distortions when economic growth is barely over the zero mark, let’s fix the distortion by deregulating and not taxing other areas of investment. Then investment will flow away from housing to these other areas.”

“If people continue to answer economic problems with regulation then the economy and government revenues will eventually stagnate. They will become the dead horse that no amount of flogging can make get up again.”

Ends

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