Currently in the UK, Capital Gains Tax (CGT) is charged on profits from selling assets like second homes or shares, and the rates are generally lower than Income Tax rates. Proponents of alignment argue that it is unfair for a wealthy investor to pay a lower tax rate on their passive profits than a nurse or teacher pays on their wages, and that closing this gap could raise billions for public services. Opponents argue that low CGT rates compensate for the risk of investing and the fact that asset values are often inflated by inflation over time; they warn that equalization would cause capital flight, where investors move their money to countries with more favorable tax regimes.
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