WHILE the Federal Government was quick to rule out speculation earlier this week that it was considering a capital gains tax on the family home, those reports would have sent a chill to the heart of many home-owners, particulary at a time when the International Monetary Fund is specifically advocating just such a tax.
And those who tend to scepticism - probably most of us - when it comes to such government “reassurances” may have derived little comfort from the denials. Especially as Treasurer Wayne Swan refuses to rule out the prospect of a tax on the rising value of family homes.
But what about the issue itself? Should we be outraged at the suggestion of a tax on this particular form of capital appreciation – particularly if it were to be levied, as has been suggested, only on the owners of the most expensive homes.
Well, many people would argue that since we have paid with post-tax dollars for our homes, we should be entitled to take advantage of their appreciating value without the prospect of a tax penalty.
After all, the capital appreciation of a home is something you don’t actually get to “capitalise” on – not until you sell up, and then, the probability is you’re in the market for another home, so your capital gain is going to be accounted for pretty quickly unless you’re down-sizing.
But there are other arguments – one of them being then old probate, or “death duty” argument. For what is the moral foundation of inherited wealth?
Why should the wealth accumulated by one hard-working generation be passed on completely intact to the next? Shouldn’t we all make our own way in the world on a relatively level playing field? After all, it’s not contemplated (is it?) that a capital gains tax on family homes should have the effect of confiscating any capital gains altogether, only that – perhaps - a tax might be “considered”.
The answer to the rhetorical question posed above might be pretty simple. Why shouldn’t I be able to pass on my assets to my kids without the threat of the government getting their grubby paws on my hard-earned wealth? For to paraphrase the late Kerry Packer, governments don’t spend tax receipts – fundamentally our money - all that wonderfully well.
But for all that, taxation is an inescapable reality; one of the two great certainties of life. Governments levy taxes in virtually every economic sphere. And there is no serious argument that our society could continue with out taxation. As emotional as the issue might be, our consent to the payment of our taxes is what the keeps society running, so why do we have such an emotional reaction to a tax on our homes?
Perhaps are part of the answer is that such a tax would act so blatantly as an income redistribution measure – a Robin Hood tax if you like. Why would any hard-working person be in favour of that?
But again, a measure of income redistribution is something we expect of our governments. Don’t we want disadvantaged schools - for example - to be given a dose of positive discrimination? Don’t we want governments to play a role in providing help and support for the less well-off? Public housing, unemployment relief, means-tested child care assistance – they’re all about income redistribution at their core, and those measures are supported, to a greater or lesser degree, on both sides of the political spectrum.
Anyway, I guess we all stand by, expecting the worst. Having spent a poultice on the “stimulus package” which has been responsible, we are told, for the fact at we are now emerging from the worst recession since The Great Depression, it shouldn’t come as any surprise to anyone that the government might now start to think of ways to get some of that cash back.
The depressing thing is just the lack of certainty. If governments would simply allow us into their thinking without considering the political consequences of absolutely every sentence, life would be a whole lot simpler.
Like we expect that to happen…
Facebook Recommendations
Read all about it
Punch live
Up to the minute Twitter chatter
It's a Sydney thing, but 95.3FM... Why? It used to be all Bohemian Rhapsody and Walk this Way; now it's Father to Son and Country Road. Wah.
Recent posts
The latest and greatest
We don’t deserve this huge, exciting scientific project
I’d like to be able to say that sharing the world’s largest radio telescope with South Africa…
Mining money talks the loudest in Australian politics
When North Queensland Liberal MP George Christensen got the idea of launching a new political organisation…
Please enter your password
Help! I’ve succumbed to a crippling modern illness that can strike at any moment. Symptoms include:…
Nosebleed Section
choice ringside rantings
From: They must pay for one’s bitter disappointments
Michael S says:
"A teacher at Geelong Grammar had criticised her for using words that were too long, which had left her confused and had made her doubt her ability to write essays. She became ''quite distressed'' when her English marks began to fall." I can sympathise. My scholastic mentors conveyed to me a causal relationship… [read more]From: Welfare for breeders is a bonus for everyone
Change Up! says:
I have no problem paying my taxes. As a single, childless person on a very decent income, I can afford it and not have my life severely altered. Plus I understand that my taxes paying for things like schools, childcare and infrastructure is ultimately a good thing. A better community is better for me… [read more]Gentle jabs to the ribs
They must pay for one’s bitter disappointments
A private school girl’s family is sueing her elite, extremely expensive private school for not… Read more
Most commented