Tax on unrealised capital gains, which the Labor government plans to implement, is among the most intellectually bankrupt of concepts, even for economically illiterate socialists.
I am surprised by the general acceptance of Capital Gains Tax which I regard as being little better than common thievery, particularly as it pertains to property. Property prices do not rise naturally, they rise chiefly because of government policies the most significant of which is borrowing (debt) and printing money (currency devaluation). The combined effect is to reduce the value of paper money, which in turn causes the value of any asset to increase.
I buy land, hold it for 20 years and then sell it - I am no richer or poorer than when I started (other than holding costs and income). The application of a capital gains tax to the change in price caused by loss of purchasing power is theft, after the sale I no longer have enough money to repurchase the same property or another one like it.
I agree, Andrew. It is plain mafioso extortion. They taxed whatever money (currency) you use to purchase an asset with. They then tax you to buy it, tax you to own it, tax any income it generates, tax everything you buy with the income, tax you to sell it, and then tax you again when you sell. And most of these taxes are purely punitive because the government is so inefficient and incompetent that it spends more money administering most taxes than it collects from those taxes. What do we call that? A liberal democracy? Who agreed to it? Who voted for it? More to the point, given that the majority of Australians aggressively defend the system as being free, fair, effective and uncorrupt, why would anything change?
Thank you, Damon, for shedding light on the complexities and potential pitfalls of taxing unrealised capital gains. Your analysis highlights the significant risks to investment behaviour and economic growth, particularly for illiquid assets like startups and property. The example of forced asset sales to cover tax liabilities really drives home the liquidity issues this policy could create.
I also appreciate the global context—pointing out that no major economy has successfully implemented such a tax underscores how experimental and risky this approach is. It’s a compelling case for why policymakers need to tread carefully and consider the long-term impacts on Australia’s financial ecosystem.
Agreed, Kenelm. Call me cynical, but I think policymakers have absolutely considered the long-term impacts. I just do not think Australia's financial ecosystem is their concern? Hopefully I am wrong. Because, aside from corruption and weaponisation of the tax system, there is only one other rational basis for a UCGT, which I chose not to mention: liquidating and extracting as much wealth as possible before an inevitable financial collapse. That said, assuming that rationality is a factor is a truly crazy conspiracy theory. ;-)
If we are honest with ourselves, I think we all know exactly what type of individual delights in cooking up these "unworkable abominations", Gerardine: the people who can use them to their own benefit.
And where is all this leading to? The WEF of course! OWN NOTHING AND BE HAPPY! When are the people around me going to wake up? Together we could fight back against this evil that has been perpetrated for many years! Even my own husband doesn’t want to know and also my friends and family! 🤬
Absolutely, Isabella. The UN/WEF are not shy about their policies, intentions, or the people and governments onboard with their agenda; including the major parties in Australia. Their slogans, "Build back better" and "the Great Reset" are plain about leveraging a catastrophic collapse from which a "global response" will be "required". So when you see politicians, who are proudly aligned with this agenda, bringing forth all the policies that are transparently described on the UN website, you understand the source and the goal. That said, none of this changes the fact that many of the people involved are as ignorant and incompetent as they are corrupt 'true believers'. So, as with covid, whether you want to blame incompetence or malice really makes no difference to the end result. Like 'green energy', a UCGT is an indefensibly stupid, self-destructive idea, absent of any redeeming quality whatsoever... except the ability for bureaucrats to pillage the public purse.
Bravo for bringing this madcap plan to attention, Damon Hayhow. I hope it is republished on MSM especially TV to gain wide public attention!
I am surprised by the general acceptance of Capital Gains Tax which I regard as being little better than common thievery, particularly as it pertains to property. Property prices do not rise naturally, they rise chiefly because of government policies the most significant of which is borrowing (debt) and printing money (currency devaluation). The combined effect is to reduce the value of paper money, which in turn causes the value of any asset to increase.
I buy land, hold it for 20 years and then sell it - I am no richer or poorer than when I started (other than holding costs and income). The application of a capital gains tax to the change in price caused by loss of purchasing power is theft, after the sale I no longer have enough money to repurchase the same property or another one like it.
I agree, Andrew. It is plain mafioso extortion. They taxed whatever money (currency) you use to purchase an asset with. They then tax you to buy it, tax you to own it, tax any income it generates, tax everything you buy with the income, tax you to sell it, and then tax you again when you sell. And most of these taxes are purely punitive because the government is so inefficient and incompetent that it spends more money administering most taxes than it collects from those taxes. What do we call that? A liberal democracy? Who agreed to it? Who voted for it? More to the point, given that the majority of Australians aggressively defend the system as being free, fair, effective and uncorrupt, why would anything change?
Thank you, Damon, for shedding light on the complexities and potential pitfalls of taxing unrealised capital gains. Your analysis highlights the significant risks to investment behaviour and economic growth, particularly for illiquid assets like startups and property. The example of forced asset sales to cover tax liabilities really drives home the liquidity issues this policy could create.
I also appreciate the global context—pointing out that no major economy has successfully implemented such a tax underscores how experimental and risky this approach is. It’s a compelling case for why policymakers need to tread carefully and consider the long-term impacts on Australia’s financial ecosystem.
Agreed, Kenelm. Call me cynical, but I think policymakers have absolutely considered the long-term impacts. I just do not think Australia's financial ecosystem is their concern? Hopefully I am wrong. Because, aside from corruption and weaponisation of the tax system, there is only one other rational basis for a UCGT, which I chose not to mention: liquidating and extracting as much wealth as possible before an inevitable financial collapse. That said, assuming that rationality is a factor is a truly crazy conspiracy theory. ;-)
We really have to ask what type of individual delights in cooking up such “unworkable abominations!”
Thanks for this, Damon; or maybe not - added a bit more stress to my life 😩
If we are honest with ourselves, I think we all know exactly what type of individual delights in cooking up these "unworkable abominations", Gerardine: the people who can use them to their own benefit.
Yes. It was a rhetorical question. I know exactly what type.
Credit to the author, some good points made which haven't been raised elsewhere.
Thank you Chris
And where is all this leading to? The WEF of course! OWN NOTHING AND BE HAPPY! When are the people around me going to wake up? Together we could fight back against this evil that has been perpetrated for many years! Even my own husband doesn’t want to know and also my friends and family! 🤬
Absolutely, Isabella. The UN/WEF are not shy about their policies, intentions, or the people and governments onboard with their agenda; including the major parties in Australia. Their slogans, "Build back better" and "the Great Reset" are plain about leveraging a catastrophic collapse from which a "global response" will be "required". So when you see politicians, who are proudly aligned with this agenda, bringing forth all the policies that are transparently described on the UN website, you understand the source and the goal. That said, none of this changes the fact that many of the people involved are as ignorant and incompetent as they are corrupt 'true believers'. So, as with covid, whether you want to blame incompetence or malice really makes no difference to the end result. Like 'green energy', a UCGT is an indefensibly stupid, self-destructive idea, absent of any redeeming quality whatsoever... except the ability for bureaucrats to pillage the public purse.