Australia is a low tax country, with increasing demands for government spending. There is
bipartisan support for increasing spending in areas such as defence, healthcare, and
housing. At the same time, both politicians and pundits make frequent calls to reduce the
budget deficit. This can be achieved by increasing taxation.
Australia has a long history of taxing wealth lightly: it taxes capital gains concessionally; it
does not have a wealth tax; nor does it have an inheritance tax.
This paper proposes three ways that the government could raise revenue by taxing wealth.
• More comprehensive taxation of capital gains.
• The introduction of an annual tax on wealth above a specified threshold.
• The introduction of a wealth transfer tax, that is, taxes on transfers via bequests at
death and gift duties.