1500 words max

Begin by detailing the nature of the capital gains exemption for personal residences in Canada, and also describing the American system. What kind of economic arguments could be made in favour of such an exemption, and what arguments could be made against it? Discuss in some detail the issues of horizontal and vertical equity implicit in the exemption. Can you come up with a rough estimate of the cost to the government in this exemption (this will be the hardest part of the paper, since it will require you to do some digging and to make some fairly wild assumptions!)? Given how lucrative such a tax would be for both federal and provincial governments, why do you think they have shied away from it? Finally, would you be in favour of or opposed to the imposition of such a tax? Explain your reasoning.