The IEA criticises proposals to double Capital Gains Tax

Capital Gains Tax doubling could reduce the supply of affordable housing and encourage companies to take on more debt

Responding to the proposals to double Capital Gains Tax, Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs said:

“The doubling of Capital Gains Tax would be a huge mistake for Britain. Over the last few decades governments have tried to free up the private rental sector of the housing market. Capital Gains Tax would arbitrarily penalise those involved in the rental market, driving out investors and pushing more people to try and buy their own home, who cannot afford to do so. The move has the potential to reduce access to affordable housing and drive up rents.”

“Capital Gains Tax is severely counterproductive for a number of other reasons as well. It further penalises companies that finance themselves through equity rather than debt and generally represents a "double tax" on holders of shares. Surely we have learned from the financial crash that we should not be artificially encouraging companies to take on more debt.”

“All this comes not long after a point when Britain’s savings reached an all time low. We should be desperately concerned about this decision. It shows a grave error of judgement on the part of the coalition.”

To arrange an interview with Philip Booth, IEA Editorial and Programme Director or Mark Littlewood, IEA Director General, please contact Ruth Porter, Communications Manager, 077 5171 7781, 020 7799 8900, rporter@iea.org.uk.

 

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