Returning to the two main goals of this report into CGT, assessing its impact on economic efficiency and improving the legitimacy and progressivity of the tax system, this section aims to review the evidence as we move on to key recommendation.
A realisation-based tax as outlined above would be far from perfect, but as with any potential public policy, the comparison must not be to an unattainable theoretical ideal, but to the deeply flawed system currently in place in New Zealand. The current system is inequitable, inefficient, and creates large challenges for tax administration and compliance. We maintain that a realisation-based capital gains tax regime would be an improvement against all of the criteria for good tax policy.
As noted above, the current loopholes in capital gains taxation in New Zealand create strong incentives to invest in unproductive and inefficient tax shelters. Of particular note is that the current regime heavily favours investment in housing. Taxation of all gains at the same rate as other income would significantly reduce opportunities for arbitrage for taxpayers. 
Moreover, the revenue that comes from capital taxation could potentially be used to lower other forms of taxation. While one may argue that this would directly undermine the progressivity of the tax system, goal number two, this fact is at least worth noting; future scholarship could further analyse this hypothesis. However,
“ revenue could be used to lower both corporate and higher income taxation as well as reducing GST, thus helping to increase efficiency and New Zealand’s economic competitiveness, while at the same time helping lower-income households for whom GST is disproportionately onerous.”
As shown earlier, taxing capital gains clearly improves vertical equity, since higher income households earn most capital gains in New Zealand. It would clearly boost horizontal equity as it would eliminate the inequity of gains from capital not being taxed the same as gains from wages. One issue for equity concerns is that the capital gains can be lumpy. For example, a small business owner might realise a large gain one year and never realise any other gains. Under a progressive income tax, this would push the owner into the higher tax bracket. One possible solution would be to tax capital at the same flat rate no matter what gain was realised. This reduces complexity at the expense of progressivity.
Having taken these issues into account, this report recommends the introduction of a CGT in New Zealand based upon certain parameters, as outlined in the following section.
 Burman and White, “Taxing Capital Gains in New Zealand: Assessment and Recommendations,”19.
 Burman and White, “Taxing Capital Gains in New Zealand: Assessment and Recommendations,”20; Inland Revenue Department and New Zealand Treasury, “The Taxation of Capital Gains Background Paper for Session 3 of the Victoria University of Wellington Tax Working Group,” 15; Australia’s Future Tax System, “”Report to the Treasurer: Part One,” http://taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/Publications/Papers/Final_Report_Part_1/index.htm (accessed 25 August, 2011).
 Burman and White, “Taxing Capital Gains in New Zealand: Assessment and Recommendations,”21; Australia’s Future Tax System, “Final Report: Detailed Analysis Part 2,” http://taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/Publications/Papers/Final_Report_Part_2/index.htm (accessed 23 October, 2011).