A capital gains tax is being pitched as the best way to avoid overtaxing the poor.

Most of the 10-member Tax Working Group have reached an agreement that the tax on profit from asset sales should be a part of our system.

Chair Sir Michael Cullen told Mike Hosking without it, the money will have to come from raising income taxes.

"New Zealand has a very flat tax system by international standards, and it needs to be weighted towards taking more from higher income earners."

Cullen says using the capital gains tax as an election pledge, as we have seen time and time again, needs to be seriously looked at.

"You have to go into the election with the full programme absolutely clear so everyone understands it."

The group is due to deliver its report to the Government no later than February.

LISTEN ABOVE AS MICHAEL CULLEN SPEAKS TO MIKE HOSKING