Growing support for ‘political suicide’ inheritance tax: research
The University of South Australia (UniSA) released a new study last week that shows public resistance to inheritance and inheritance taxes may have waned in the 40 years since their abolition.
Dr Veronica Coram, social policy expert at UniSA, said the decline in the bequest motive offers the nation a material opportunity for meaningful Australian tax reform – as well as the opportunity to address the social inequalities that often accompany the wealth transfer.
âThere is nothing more certain than death and taxes. But while people generally assume the combination is notoriously unpopular, our research suggests otherwise, âsaid Dr Coram.
âWe spoke to young adults and elderly Australians and two-thirds of them thought Australia should consider reintroducing inheritance taxes worth over $ 3 million when only one in 10 was definitely against it, âshe said.
Dr Coram said the faltering interest is emerging as an opportunity for Australian tax reform and to deal with growing wealth that often trickles down to those who may not need an inheritance.
“Lack of interest in giving or receiving inheritances meant that most participants saw no reason to oppose the taxation of inheritances, which opens up potential opportunities for much needed tax reform,” said the Dr Coram.
âInheritances generally go to people who are already well off and who do not need it; they encourage inequalities and inhibit social mobility.
Heads of state each abolished inheritance tax in 1979, as part of an initiative led by Queensland National Party Premier Joh Bjelke-Petersen. Then-Prime Minister Malcolm Fraser followed suit soon after and abolished the tax at the federal level, which was seen as a move to bolster his electoral popularity.
The 2009 Henry Tax Review examined the issue in detail and viewed inheritance tax as a “relatively efficient way to tax savings.”
He suggested that the tax could be a progressive part of the tax and transfer system, with most income coming from the richest 10 percent of households, but did not recommend the reintroduction of a personal income tax. estates.
Dr Coram believes the tax could not only help close the inequality gap, but also raise incomes and close a projected federal budget deficit of $ 106 billion for the year 2021-2022, and one too as big as $ 1 trillion in 2025.
âThe Australian government must find ways to generate revenue to support the increased spending demands generated by COVID-19, an aging population, pressure on healthcare systems and increasing environmental disasters,â said Dr Coram .
âReintroducing the inheritance or inheritance tax is a way to increase public revenue while reducing a key factor of inequality. “
Dr Coram said politicians should take comfort in the change in sentiment around the tax both in Australia and in other OECD countries. She said the company is less resistant to inheritance tax than it may have been in the past.
âHistorically, inheritance tax has been viewed as ‘political suicide’,â said Dr Coram. âBut maybe their time has come, ironically due to growing individualism and the associated decline in the assumption that family members should provide for each other.
âMore research on changing views on redistribution policy is needed, but the results of our study suggest that if governments are considering tax reform, they should not assume that Australians are fiercely opposed to it. taxation of wealth transfers. “
John Buckley is a reporter for Accountants Daily.
Prior to joining the team in 2021, John worked at the Sydney Morning Herald. His reporting has featured in various media including The Washington Post, The Age, and The Saturday Paper.