|Submission No. 40||Back to full list of submissions|
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8th April 1999
Abolition of Capital Gains Tax
Capital Gains Tax is payable on any real capital gain made on the disposal of an asset that was acquired on or after 20th September 1985 and that is otherwise not exempt. Thus, Capital Gains Tax has two components.
The consequence of Capital Gains Tax being a wealth tax is that it discourages capital accumulation and savings, exacerbating Australias Current Account Deficit, whilst the consequence of Capital Gains Tax being a transactions tax is that it reduces capital mobility and increases economic inefficiency. Therefore, in fairness to all Australians, as Capital Gains Tax is both a wealth tax and a transactions tax, it should be abolished.
If Capital Gains Tax is abolished, it would liberate capital from the burden of its wealth tax and transactions tax components, as well as encouraging millions of Australians to save for, invest in, and enjoy Australias future.
I very much hope your Committee will recommend that Capital Gains Tax should be abolished.
L. Middleton BEc(Hons)