Australia already has a Capital Gains / Wealth Tax
YLC's article about taxing the capital of the wealthy, seems to completely ignore the fact that Capital Gains Tax (CGT) was introduced from 20 September, 1985 - nearly 36 years ago. I completely agree with the need for Australia to retain CGT.
Many 'Baby Boomers' have been inheriting from their parents for quite some time, and if and when they sell their inherited assets, they will pay a lot of tax. In this sense, we already have a wealth tax - in a format which is completely sustainable because beneficiaries of deceased estates don't pay any tax until they actually sell the assets which have significantly increased in value. They don't have to sell assets to pay tax, they only pay tax after they have sold. This trend of increasing CGT revenue will continue indefinitely to grow into the future, as long as individuals continue to be encouraged to accumulate wealth.
Socialism in the form of a Death Tax which taxes the asset value of deceased estates which have not been sold stymies such incentive. This type of death/wealth tax causes the type of decay apparent in the UK where families have had to sell homes and income-producing properties that have come down through generations for no other reason than to pay tax on unrealised capital growth. Income earning capacity is thus constrained, and this flows on eventually to cause unemployment which doesn't help anybody in the long term. This type of tax is not sustainable indefinitely.
Coming from a person who doesn't earn a lot, but always pays tax, it's exasperating to see really rich people not paying ANY tax, simply because they have the means to shuffle profits from one subsidiary company to the other so that on paper their actual income 'disappears' into more investment and more assets = wealth.
I don't like the idea of Death Duties, certainly not for people who own relatively little (an average house, car and boat - none of the multi million luxury stuff), but how can we get very affluent people and their families to pay their fair share of tax, so that our governments can provide education for children, provide a health system and pay for Medicare, provide law enforcement, pay for a defense force, upkeep the roads we all drive on and provide safety nets for those too ill or disadvantaged to look after themselves?
I know some (most) of these government services are provided by the States, but the Federal government needs to collect enough tax to fairly pass this on to the States. Very wealthy people can afford to pay.