Brotherhood Comment August 2008

ISSN 1320 8632A regul Ar upd Ate from the r ese Arch And policy centreAugust 2008In the national interestAddressing inequities in the tax systemThe forthcoming review of taxed at a concessional rate—with deferral benefits). This encourages Australia’s tax system provides a only 50 per cent of the capital gain speculative overinvestment long overdue opportunity to address subject to tax. The Australian in residential property, and the current distortions which enable Treasury estimates a revenue cost underinvestment in other, socially high-income earners to benefit from of over $7.4 billion in 2007–08. more productive, investments in tax loopholes and concessions, In addition, annual losses from plant and equipment, human capital while discouraging those on income investments that make overall and research and development. support from seeking work. capital gains can be deducted for personal income tax assessment SuperannuationThe Brotherhood of St Laurence (negative gearing). Small businesses From July 2007, most income commissioned Professor John also receive special capital invested into superannuation, Freebairn, an expert on taxation, to gains tax (CGT) concessions, including that funded by the work with its economist Rosanna with an estimated revenue cost compulsory 9 per cent levy on Scutella to review major inequities of $800 million in 2007–08 wages and salaries, attracts a in the present system. While (Australian Treasury 2007). 15 per cent ...