Time to Cut CGT – Centre for Policy Studies

Time to Cut CGT – Centre for Policy Studies

CGT is a damaging tax and the current high top rate is likely to be undermining our economic recovery, reveals a new Centre for Policy Studies Pointmaker The Case Against CGT by Howard Flight and Oliver Latham.

They conclude that Capital Gains Tax (CGT) is an economically bad tax:

  • It discourages entrepreneurship, savings and investment and so reduces economic growth.
  • It distorts capital markets by encouraging individuals to hold on to assets that would be better off under different ownership.
  • It channels funds into tax-exempt assets rather than those with the highest return.
  • The sheer number of exemptions introduced by governments of all stripes is a tacit admission that CGT is a bad tax.

These are conclusions business owners and wealthy individuals know only too well.

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