Analytical Framework

Given the literature available, there are two important issues to consider when assessing the potential impacts of a capital gains tax; firstly, when a CGT would be applied and secondly, how the CGT would be designed.

As capital gains taxes are common around the world, looking for guidance on the implementation of one in New Zealand naturally lends itself to comparative institutional analysis. Comparative institutional analysis offers the chance to take in what scholars have said about a given public policy, and see how it has been implemented in a real-world setting. As Mintrom has described, “comparative institutional analysis is predicated on the view that effective policy responses to current problems are most likely struck on when policy design is closely informed by knowledge of actual working policy settings found elsewhere.”  [1]

Similarly, risk assessment allows us to examine whether the intended intention of the implementation of the CGT, that is, equity and efficiency concerns, could possibly be undermined by unintended consequences. This allows us to use the experience of previous scholarship and the experiences of other countries when designing a CGT. In the sections below, the possible options available for the implementation of a CGT are examined, what Australia’s CGT looks like, and what possible unintended consequences must be considered.


[1] Mintrom, Contemporary Policy Analysis, 210.