The head of the property investors' association said it would stop landlords providing accommodation to renters.
Apparently landlords in New Zealand operate largely out of a sense of benevolence.
An alternative point might be there would be less speculation by property investors and more affordable houses for first-home buyers.
It is difficult to see how existing houses would suddenly disappear. Or that we have the most benevolent landlords in the world.
An MP from the National Party then said such a tax is an attack on the Kiwi way of life, such as owning a bach.
I couldn't help but think how many Kiwis under the age of 50 own a bach? This is a Kiwi way of life for a very privileged few.
Yet I want to make my position clear.
I hate the idea of a capital gains tax. I don't trust politicians to spend my money wisely.
And most importantly, the bulk of my income in the past 10 years has come from capital gains.
Yet I support this tax, with some reservations.
I teach part-time. I am fully taxed on my income as a teacher. I am also taxed whenever I buy goods and services at a rate of 15 per cent.
But I am not taxed on the capital gains I get from my shares which has been the bulk of my income over the past decade.
There is something very unfair about this.
Someone who works long hours in a hard manual job in a factory and works overtime has to pay up to 30 per cent of their income as tax. I pay no tax on my shares if they go up in value.
In the past decade, assets such as shares and property have rocketed in value because the Reserve Bank has kept interest rates at artificial lows.
So capital gains have been exorbitant.
Yet there is little tax paid on this income. Those with wealth have got much wealthier, unless they are complete dumb asses.
Those who don't own property or shares have been left far behind. They relied on their time and labour to get ahead and they pay the bulk of the taxes in this country.
I support a capital gains tax, with reservations. It must be fiscally neutral.
I have no desire to fund a political bucket list which includes saving the planet and solving every social ill by throwing money at it.
So if this Government is serious about a capital gains tax it must ensure and prove it is fiscally neutral.
This means that it must ensure any increase in the tax revenue from a capital gains tax is offset by the reduction in tax elsewhere.
The most obvious place must be for those who earn a low income by their own labour. I have no problem in the fairness of this.
The irony is, I suspect we are coming to the end of the massive capital gains in property and shares of the past decade.
This has been driven by ultra low interest rates here and abroad. This has been the legacy of the Global Financial Crisis of 2008.
A capital gains tax may prove a fizzer in terms of government revenue after such a spectacular decade of capital gains in shares and property.
But the rationale for this tax must be fairness and balance rather than additional revenue gathering.
If this tax kicks in, in 2021 as proposed, the additional revenue to the government may be limited.
We may be about to have an intense political debate over a non-issue.
The huge capital gains of the past decade cannot last. We are deluding ourselves if we think otherwise.
But at least this Government has the gumption to address the issue of balance and fairness in our tax system.
*Peter Lyons teaches economics at Saint Peter's College in Epsom and has written several economics textbooks.
