The family home is sacrosanct, but not to Labor
Last week we saw two new Labor tax ideas floated in the media. First, a “slug the rich tax” – if you earn $150 thousand a year, the Rudd lot consider you are rich so they think a surcharge of 3% on those earning $150 thousand would raise some billions of dollars.
Secondly, a “lets slug everyone tax” with a capital gains tax on the family home. The family home is sacrosanct but not to Labor.
They first wanted to tax it as far back as 1980 when in opposition. In fact we did not have a capital gains tax till Paul Keating imposed it in 1986 (retrospective to September 1985).
Even then he didn’t attack the family home and left it Capital Gains Tax free, but he did give us the Fringe Benefits Tax, The Recession we had to have and 17%interest rates.
The usual pro tax on the family home arguments are advanced. The main one being that leaving it out distorts the tax.
Well it does. But to me that’s a good reason to abolish the Capital Gains Tax altogether and replace it with a speculative gains tax which would impose the tax at the taxpayers top margin rate if the asset is disposed of within one year of acquisition. The tax rate would then reduce for every year the asset is held and phase out altogether at say seven years.
The family home would remain exempt, but the distorting effect is much reduced as there is an incentive to spread investment because of the phase out of the tax after seven years.
Tax reform should be to assist individuals invest and create wealth and not to be an exercise to simply gathering in as much tax as the government can get its hands on.
Again and again the Treasurer has been given the opportunity to rule out imposing a capital gains tax on the family home and has refused to do so.
Treasurer Swan tries to tell us that the tax revue being carried out by the head of his department is independent. What rubbish! A departmental head answers to his minister and, in this case, Mr Henry answers to Mr Swan.
Treasurer Swan has already told Mr Henry to rule out consideration of the GST and the tax-free status of superannuation payments (from a tax paying rule out) to people over 60, so why not rule out tax on the family home.
The answer is that Labor will always wield the blunt tool of tax to the disadvantage of the individual. By taxing and pretending they can spend people’s money better than they can; they deny the individual the right to manage his or her own money in the belief that they can spend it better on the tax payers’ behalf.
So it is with the proposed Carbon Tax, but that’s for future debate.
If a week’s a long time in politics 3 months is an eternity.
If you listen to the Minister for Sport and Youth Affairs, Kate Ellis, you are supposed to believe that thousands of university students are going to beg Parliament to pass the government’s legislation to make them pay $250 each per year as a compulsory levy to provide services they don’t want.
Fair suck of the sauce bottle – even Rudd shouldn’t swallow this one.
Joke of the week. Minister Albanese accusing someone in the Liberal Party of not being a sophisticate – he’d sure know one if he met one. Really!
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