Should Capital Gains be Taxed

This was the headline on an article in the Press on Saturday (no on-line version that I can find). The sub- head says that the article reports on both sides of the debate. This is a bit of an obsession of mine (see my earlier posts, here, here, and here), as most of the arguments I have seen on this seem to be making incorrect partial-equilibrium arguments.

So I was keen to see what arguments would be put forward by the expert economists interviewed for this article. In a telling, but perhaps not surprising, commentary on the relevance of our profession for public policy, the number of economists cited in the article on either side of the issue was zero.

There was a quote from an Auckland professor of taxation law and policy to the effect that the absence of a capital gains tax causes "over-investment in property", but as I noted in the second of the posts linked to above, the chain of reasoning needed to get this conclusion is a lot more complicated than one might think, and the combined assumptions needed are somewhat heroic.

I continue to search for a coherent economist rationale for a CGT.