Call for death tax on Australia’s richest families
The Community Council for Australia (CCA) are calling for the federal government to introduce of a death tax, aiming to raise approximately $5 billion per annum in federal revenue. Only 100,000 of the richest Australians will be impacted by this tax if it is introduced.
The death tax is already implemented over a number of countries at differing rates and thresholds. In the Organisation for Economic Cooperation and Development (OECD), the following tax rates are applied:
The proposed tax is intended to be used to take back a portion of the inheritance rich Australians are leaving for younger generations. The implementation of this tax has been recommended by the OECD, following findings of growing income inequality with Baby Boomers holding 40% of the country’s wealth.
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Data from the ATO and the ABS indicate that approximately 100,000 Australians have a net wealth of over $5 million. Of these, 25,000 Australians have a net wealth above $10 million. If these richest 4% of Australian families paid an inheritance tax at 35%, the federal government would be able to receive an approximate revenue of $5 billion per year. With this $5 million tax free threshold, the impending tax would only affect 1% of Australian families, thus helping to counter the growing inequality within Australia.
The United Kingdom’s death tax is levied once individuals pass the $665,000. Of this however, there are discounts on offer for those whom leave assets to charities, encouraging donations. This would also be beneficial in Australia as we have a much lower rate of charitable giving from the rich that is seen in countries such as America and the UK. Through implementing discounts on donations, the Community Council for Australia (CCA) CEO David Crosbie estimates that at least $100 million worth of additional donations would be made.