Labor’s proposal to increase tax on superannuation balances over $3 million will treat symptoms instead of the disease. Here are six simple proposals for an optimal tax agenda.
Labor’s proposal to tax unrealised gains in some superannuation funds is typical of the kind of bad tax policy that both sides of politics have foisted on Australia in the past 20 years. These proposals are not tax reform. They treat symptoms instead of the disease. They make the system worse by adding complexity. They encourage wasteful game-playing by taxpayers and create costly compliance activities for tax authorities.
What would we ideally do if we were going to do tax reform right? What are the kinds of bad policies that we should definitely avoid? What are sensible policy changes that Labor could undertake that are politically do-able and put us on the right track?
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Robert Breunig is director of the Tax and Transfer Policy Institute at the Australian National University.
