PracticeAuditLSE professor defends chancellor and CGT change

LSE professor defends chancellor and CGT change

LSE professor urges chancellor to go ahead with CGT changes despite protests from business groups

A
London
School of Economics (LSE) professor
has defended chancellor Alistair
Darling’s proposed changes to the Capital Gains Tax (CGT), saying further reform
of CGT is necessary.

In an open letter to the editor of
Financial
Times
, Willem Buiter, professor of European political economy, LSE European
Institute, urged Darling not to listen to his attackers, saying taper relief had
‘no more justification on grounds of efficiency or fairness than would tape worm
relief’.

‘Further reform of the capital gains tax is required, integrating it fully
with the taxation of other forms of capital income, and indeed with the taxation
of labour income,’ he said.

‘Through trivially simple financial engineering (varying dividend payouts,
borrowing and share repurchases) listed companies can seamlessly transform
dividends into interest or capital gains. The same can be achieved by unlisted
companies when their owners sell the business. This means that, for simple tax
administration reasons and to preserve the capital income tax base, only a
common tax rate for all capital income, dividends, capital gains and interest,
makes sense. Sector, holding period, type of capital, nature of ownership, size
of firm, corporate form are all irrelevant.’

Further reading:

Private equity bosses happy enough with fallout from
PBR

Bipartisan stance against disliked CGT proposal

Related Articles

PwC found negligent by US judge over Colonial Bank's $2bn fraud

Audit PwC found negligent by US judge over Colonial Bank's $2bn fraud

3w Alia Shoaib, Reporter
Deloitte South Africa investigated over Steinhoff audits

Audit Deloitte South Africa investigated over Steinhoff audits

1m Alia Shoaib, Reporter
Top 5 audit fines of 2017

Audit Top 5 audit fines of 2017

1m Alia Shoaib, Reporter
PwC replaces EY as Domino's auditor

Audit PwC replaces EY as Domino's auditor

1m Alia Shoaib, Reporter
The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

Audit The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

2m Carl Johnson, Stephensons
BDO holds off Big Four to retain top position as AIM auditor

Audit BDO holds off Big Four to retain top position as AIM auditor

2m Alia Shoaib, Reporter
FRC urged to fine Big Four firms penalties over £10m

Audit FRC urged to fine Big Four firms penalties over £10m

2m Alia Shoaib, Reporter
EY to audit Standard Chartered bank

Audit EY to audit Standard Chartered bank

2m Alia Shoaib, Reporter