Josh Frydenberg today needs to confirm that 70 per cent of the benefit of the capital gains tax discount flows to the top 10 per cent of income earners.
The Liberal Party continues its pathetic defence of tax concessions that benefit the wealthy while refusing to properly fund Australia’s schools and hospitals.
The fact is that there is no tax concession or discount that is so heavily skewed towards high income earners – the capital gains tax discount was created 20 years ago in a high inflation environment and it’s time that it was reformed.
The repeated use of taxable income data by the Liberal Party goes far beyond being misleading, it’s just plain embarrassing.
It has been repeatedly called out by independent economists like the Grattan Institute too.
Taxable income data shows the amount of tax paid – it does NOT represent your financial position. Higher income earners are in a better position than low or middle income earners to drive down their taxable income through use of tax concessions and deductions.
Despite the obvious flaws with using taxable income data to demonstrate who benefits from tax concessions when they are deliberately designed to drive down your taxable income, the Liberal Party’s pet data does show:
- The average capital gain for all people in the top income bracket was 78 times higher than that of all income earners in the middle income bracket;
- Just 1 in 25 of all taxpayers received a capital gain in the middle income bracket which compares with 1 in 6 taxpayers in the top income bracket – that is, people on lower income don’t typically have capital gains compared with higher income earners;
- Almost two thirds of capital gains that were realised went to income earners in the top income tax bracket.