Inheritance/Death Tax - Thoughts?

Trying2SaveABuck on 12/09/2023 - 16:06
Last edited 12/09/2023 - 16:49 by 1 other user

https://www.afr.com/policy/economy/political-dynamite-tax-in…

Incoming Productivity Commission boss Danielle Wood has argued there is “simply no policy justification” for how little tax retirees pay, and called for a debate on taxing large inheritances as part of sweeping changes to address intergenerational inequity.

As part of an ambitious reform agenda that would push more of the tax burden on to older Australians, Ms Wood has urged the government to start a “sensible conversation” on reintroducing a levy on bequests to fund a reduction in income taxes for working age Australians.

TLDR - They want to tax your assets that you have 'ready' paid tax on when your NOK inherit them

My 2cents - if any government wanted to pass this without being annihilate next election the trade off would be a LARGE reduction in income tax at all brackets - ie the tax free threshold would need to be double at very least.

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Poll Options

  • 152
    I support a 'death' tax
  • 511
    i do not support 'death' tax
  • 5
    i dont know
Financial

Comments

    • ThithLord on 12/09/2023 - 16:58
      +4

      You want to put pensioners out in the cold? Heartless, but I expect nothing less from TsunamiSurfer

      • tsunamisurfer on 13/09/2023 - 11:31
        -1

        You want to put pensioners out in the cold? Heartless, but I expect nothing less from TsunamiSurfer

        No I actually support the Age Pension because society promised them that we'd take care of them in retirement.

        • ThithLord on 13/09/2023 - 13:05
          +7

          it would be simply to cut our Welfare bill.

          Then why state this? The biggest welfare cost to Australia is the Aged Pension.

          • idonotknowwhy on 13/09/2023 - 17:18
            +1

            @ThithLord: They've probably found ways to avoid paying tax, so they don't get the summary of where their taxes go after submitting them.

          • CowFrogHorse on 15/09/2023 - 22:15

            @ThithLord: THe biggest cost is not the pension, its the medical package. Old people often visit the doctor a lot, medicines arent free and regular operations and visits to the hospital are not free as well, each day costing thousands.

    • AustriaBargain on 12/09/2023 - 18:39
      +7

      Aged pension makes up the biggest welfare spending. If you look at this graph aged pension is the biggest by far, and jobseeker/unemployment benefits make up a tiny sliver https://www.aph.gov.au/About_Parliament/Parliamentary_Depart…

      Family payments, family tax benefit, childcare fee payments make up another huge chunk. You'd really upend our entire welfare system just to spite the tiny percentage that are on job benefits?

      • tsunamisurfer on 13/09/2023 - 11:49
        -4

        We can make small adjustments to handouts to make it painless across the board.

        It could be something as simple as stopping indexation on all payments for a few years, which would hardly be upending anything.

        • AustriaBargain on 13/09/2023 - 22:39
          +2

          Isn't the aged pension basically a stimulus to the economy? It helps prop up the housing market, as they pay rent, they use it for food, which helps make Colesworth some profits, and it's a serious boon to the pokies industry which a lot of people are invested in. Without the aged pension we'd have old people roaming around in gangs, robbing people for their money.

          • CowFrogHorse on 15/09/2023 - 22:14

            @AustriaBargain: Are you serious ?

            If that were true, why doesnt the government just give everyone a million dollars ?

            I cant believe someone would actually think this is true.

      • amsaini15 on 13/09/2023 - 22:13
        +3

        Aged pension should be bare minimum. These peopel had all their life to put things in order but they wasted it on themselves. And now they want to be burden on the society.

        • Assburg on 13/09/2023 - 23:56
          -2

          Man, you really have no idea.

          People get robbed, cheated, screwed over and will still smile and have a chat with you. You'd rather we go after the pittance our government gives them than the corporate welfare grabbers? Tax dodgers? The gas cartel? The people who get every handout and take every chance to look down at you they get, yeah man..we need more people like that.

    • Thaal Sinestro on 14/09/2023 - 04:35
      +1

      Australia is 1 trillion dollars in debt. How to pay it off? Abolish ALL forms of middle class welfare. Rich people who own multiple homes and are constantly going on overseas holidays should receive 0 cents in cash transfer payments, subsidies and tax breaks. Before increasing taxes, scrap middle class freebies aka 'wealthfare'.

  • [Deactivated] on 12/09/2023 - 16:29
    +3

    This has been imposed in some countries and heard about creative loopholes coming from that.

    Such as create a company and put the kids as employee & pay them salary from very young age.

    Doesn't sound like solve anything at all.

    • Ugly on 12/09/2023 - 19:10
      +3

      Or just do what our politicians do and put it all in a family trust.

    • Ch34p on 13/09/2023 - 12:51
      +1

      Doesn't work, you can't have kids as employees under a certain age due to child labour laws.
      I guess it might work after that, although if it was a big salary they'd be paying tax on it anyway, so the government would get its cut that way regardless?

      • [Deactivated] on 13/09/2023 - 13:26

        A lot of child labour law has exemption clause with parential consent. (Think about kid actors. Harry Potter ring a bell?)

        I recall condition is largely about not depriving kid wellbeing which works just fine in this case.

        The idea is leveraging tax bracket rather than getting taxed for lump sum within single tax year. E.g) 1m salary over 30 years vs 30m in an year

  • brendanm on 12/09/2023 - 16:49
    +23

    Great idea, I haven't been taxed enough while alive, now I can get taxed when I'm dead as well, superb.

    • AustriaBargain on 15/09/2023 - 22:17

      If you leave behind 10+ million when you die, maybe you really haven’t been taxed enough.

      • brendanm on 15/09/2023 - 22:40

        Who said anything about $10m? Where did you pluck that number from?

        • AustriaBargain on 15/09/2023 - 23:12

          $10 million is the amount most often discussed because in the US estates over $11.7 million are taxed, so it’s a useful analogue. Why only amounts over double digit millions? Probably because it would mean 99.9% of people getting an inheritance would face zero tax, yet it would still generate billions in public revenue. I guarantee that odds are on you are not staring down a $10+ million inheritance yourself, so it wouldn’t affect you at all.

          • brendanm on 16/09/2023 - 09:22

            @AustriaBargain: I've seen plenty of numbers thrown out, never a decision that $10m would be the number. You've just made that up.

            • AustriaBargain on 16/09/2023 - 17:21

              @brendanm: There is no estate/inheritance tax in Australia matey. Not for any amount inherited. Only capital gains tax, if it relates to the sale of the inheritance.

              • brendanm on 16/09/2023 - 17:26

                @AustriaBargain: Correct, that's why there is no number, and only talk of it, and you have assumed a figure of $10m, others have mentioned far lower.

                • AustriaBargain on 16/09/2023 - 17:39

                  @brendanm: So just how much inheritance are you counting in getting that even talk of a tax free threshold scares you?

                  • brendanm on 16/09/2023 - 17:43

                    @AustriaBargain: Don't know and don't care. I'd rather my parents use the money and enjoy themselves. I don't want my money taxed again before it's left to my kids. Government can stop wasting money on shit and improve efficiency rather than trying to tax people blind.

                    • AustriaBargain on 16/09/2023 - 17:48

                      @brendanm: Do you have 10 million to leave your kids? Five million? Your kids will do just fine then…

                      • brendanm on 16/09/2023 - 17:51

                        @AustriaBargain:

                        Do you have 10 million

                        Lol, here you go again with that.

                        Your kids will do just fine then…

                        Yeah, houses are super cheap now 😂 It's nothing to do with "the kids being fine". It's my money, which I've already paid tax on, and I don't want the government wasting any more of it.

                        • AustriaBargain on 16/09/2023 - 18:34

                          @brendanm: Statistically your wealth wouldn’t be anywhere near any estate tax threshold proposed by anyone. And even if it was your kids would be fine with multiple millions each.

                          • brendanm on 16/09/2023 - 18:48

                            @AustriaBargain: Again, kids being fine has nothing to do with it. Government has enough of everyone's money, it's time they spent it responsibly rather than just trying to tax people more to make up for their incompetence.

                            • AustriaBargain on 16/09/2023 - 18:52

                              @brendanm: If you have so many millions why don’t you spend some of it before you die? An estate tax for estates worth millions could come in before you die no matter what either of us think about it. Why not invest it in your own country industry?

                              • brendanm on 16/09/2023 - 18:53

                                @AustriaBargain: People should liquidate all their assets when they know what the date of their death will be, then spend it? Solid advice.

                                • AustriaBargain on 16/09/2023 - 21:39

                                  @brendanm: Are your kids mentally deficient or something? If you can make 10 million in your life and if you have four kids, shouldn’t they be able to make 40 million between them even with zero help from you and zero inheritance?

                                  • brendanm on 17/09/2023 - 09:02

                                    @AustriaBargain: It seems you are the one who is mentally deficient, as you have failed to read what I have written a number of times.

  • original15 on 12/09/2023 - 16:53
    +14

    If the govt just stop spending all our tax dollars on pwc and the other big4, we’d be sweet..right?
    Have people in high paying jobs, but need to pay experts to figure out what to do..that’s how it works right?

    • Trying2SaveABuck on 12/09/2023 - 16:55
      +9

      Not hosting a com games for 900m probably should be added to the list

      And referendums that does not have bipartisan support as well

      • original15 on 12/09/2023 - 17:42

        How much will it cost to get a voting system online? How much do elections and referendum cost to run and transport the physical ballot forms

        • Trying2SaveABuck on 12/09/2023 - 17:47
          +5

          Would be cheaper and better for the environment

          Also get rid of the annoying socialist trying to get me to vote yes or vote socialist or whatever bullshit agenda they are pushing

        • Thaal Sinestro on 14/09/2023 - 04:36
          +1

          Federal elections are about 400 million. Electronic voting or even voting by mail would be much cheaper.

    • Seni0r El Cheapo on 13/09/2023 - 17:33

      This comment should be framed and posted on a billboard at Fed Square.

      Spot on! Gold mate… pure 24K gold comment!

  • sss333 on 12/09/2023 - 16:57
    -1

    There's already a super death tax

    • [Deactivated] on 15/09/2023 - 23:40

      lol. Crazy that you got downvoted, but shows how little your average person understands about the taxes already in place.

      They effectively put a death tax in place in 2017 when they abolished anti-detriment payments on superannuation death benefit payments. No-one even noticed it happening, yet everyone is up in arms when you say the phrase 'inheritance tax'.

      • sss333 on 19/09/2023 - 16:52

        Someone downvoted your comment too, I upvoted to balance it out but yeah it doesn't get much attention

  • scotty on 12/09/2023 - 17:02
    +6

    Australia used to have federal estate tax but abolished in 1979 under the Fraser government. While many countries have inheritance tax, there are also many associated issues and many loopholes — for example

    • Assets/shares are forced to be liquidated in order to pay tax
    • Companies/trusts are structured to avoid inheritance tax

    So the super-rich ended up not paying much tax after all as all the assets are structured away, and middle/lower class have to foot the bills. Not an unsolvable problem, but far from "just tax the dead!"

    • AustriaBargain on 12/09/2023 - 18:41
      +1

      So who gets OZB if you die, who will be sitting in the big seat on the penthouse floor of OzBargain Towers

      • scotty on 12/09/2023 - 20:12
        +1

        You mean stockpile of Envelope and old OzBargain t-shirts in odd sizes?

        • jackary on 12/09/2023 - 20:14

          How dare you play Eneloops like that!

          PS, I’ll take an XXS.

          • scotty on 12/09/2023 - 20:17
            +1

            @jackary: Darn autocorrect on phone. Gboard certainly hasn't understood the actual value of those rechargeable batteries. And no, those odd size t-shirts are to be inherited, finger crossed that the government won't try to tax those.

            • h4zey on 13/09/2023 - 20:25

              @scotty: well you can also donate them to us, it's tax free….

  • dcep on 12/09/2023 - 17:09

    You get free or cheap house in Japan. Maybe inheritance tax will solve the housing affordability issue?

    https://www.youtube.com/watch?v=6DAw_ISEEcs

    • CowFrogHorse on 15/09/2023 - 22:21

      The affordability issue is caused by the governments opening Australia to the international markets which means massive increases.

      Simple answer is to either stop international ownership or tax them heavily for any purchase they make. Someone from China wants to buy a house, charge them 50% sales tax.

      It doesnt take a genius to see the more Australia is opened to the international scene the worse it gets. Wages go down because well surprise suprise most of the world works for far less etc.

  • garetz on 12/09/2023 - 17:13
    +11

    Remember when they introduced the GST to Australia ? They argued the gst would supersede all other taxes and they would all be abolished.

    Of course that never happened, all the previous taxes continued to exist, and then they added the gst on top of that.

    An inheritance tax is a tax on the poor just like the gst.

    • Trying2SaveABuck on 12/09/2023 - 17:14
      +8

      ahhhhh yes the GST was meant to get rid of stamp duty lmao that never happened….

      • garetz on 12/09/2023 - 17:22
        +4

        Stamp duty was the big one, but there was alot of others as well that was also supposed to be abolished like levies.

        "The policy included a 10 per cent GST, the abolition of wholesale sales tax, pension increases and personal income tax cuts and the abolition of state taxes, including financial institutions duty, debits tax, bed taxes, stamp duties on shares, leases, mortgages and cheques."

        quoted from https://www.afr.com/politics/gst-the-reform-that-divided-a-n…

        However its interesting, things like the GST do not get a referendum, but when things do not really matter as much, they always do.

        • Almost Banned on 12/09/2023 - 22:16
          +2

          Quite a few of those things actually were abolished.
          Stamp duties are ridiculous, but not as ridiculous as payroll tax. Imagine a tax on employing people.

      • KapitaneXtreme on 13/09/2023 - 10:24
        +2

        GST replaced a whole lot of state taxes you're lucky you've never heard of. Stamp duty on property transfers was never meant to be one of them.

      • ribze1 on 14/09/2023 - 10:11
        -1

        Another Liberal lie

  • Lunarboogie on 12/09/2023 - 17:33
    -1

    I support a death tax. It's abhorrent that a good number of wealthy superannuants die with their super balances untouched. It's become a vehicle to pass on wealth to children. The same applies to real estate. I have no truck with that but there ought to be a stronger level of taxation, not least to recoup the preferential tax treatment that these assets received over the course of their lives. This would be good for equality in this country.

    But it would only ignite ways to get around it. For example, rich folk will just give away their assets while they're still alive. Only the unprepared or those who pass suddenly will be stung by this while leaving the fat cats untouched.

    • sss333 on 12/09/2023 - 17:55
      +1

      If they leave it untouched in super the taxable component will be taxed (assuming it's not going to a dependent), if they remove it from super it won't

    • Almost Banned on 12/09/2023 - 22:18
      +2

      Blah, blah, blah - how dare people get to choose what to do with their own money - money which has already been taxed.
      No - the government knows best and they should take it all instead.

      • misu p on 13/09/2023 - 23:07

        All money has been taxed endlessly… I used my money to buy a service from somebody, I already paid tax… do you really expect that company to not pay tax because they got money that has already been taxed?

        Money is an income to the company so of course they should pay tax. Money is an income to the kids so they should pay tax too.

  • afah0447 on 12/09/2023 - 17:35
    +7

    Within reason this is a sensible tax. They exist in the UK and USA. Eg, assets transferred above $10m. This would affect less than two per cent of the population.

    • Trying2SaveABuck on 12/09/2023 - 17:36
      +1

      'If indexation is applied'

    • AustriaBargain on 12/09/2023 - 21:54

      Would I kill a man to be part of that two percent 🤔

  • payless69 on 12/09/2023 - 17:40

    A homicide cop was complaining to me that his job was on the line for not enough murders to deal with.

    Yep a death duty would keep him busier!

  • burningrage on 12/09/2023 - 18:05
    +14

    The morality of death/inheritance tax is repugnant and that itself is the reason why they need to be opposed.

    There is nothing positive out of it. For a start, the argument for this tax is coming out of jealousy that a) wealthy taxpayers who passed their inheritance to their kids who "did not have to work" and started out as "silver tongue". This kind of reasoning also existed against International Students back when I was one ("Oh, their parents are rich so it's okay to tax the f&&k out of them"). Envy is the one of the 7 sins of the world.

    And b) this tax is coming out of laziness just like where we are right now in Australia where a lot of (green) voters say, "A lot of people are 'disadvantaged' so you should give away your wealth and we force you if you don't want to". This is despite the "wealthy" do not use as much Government welfare services as many others and they are the biggest taxpayer (4.1% of taxpayers earning $180k above paid 35.4% of total taxation revenue - https://www.skynews.com.au/australia-news/sky-news-host-tom-…). They are called 'fat cats', insulted and spat on and yet they are expected to pay more.

    And lastly (c) there is nothing productive out of it. It's not like they work, earn more, and tax more. It's just an impost like mafia demanding 'protection' money. So obviously they are going to be loopholed and worst of all, the monies are ALREADY taxed.

    • AustriaBargain on 12/09/2023 - 22:04
      +4

      The problem is the inheritee has no incentive to spend or invest the money which doesn‘t help the economy. And “investing” in existing houses doesn’t help yhe economy either. At least buying a yacht puts money back into the economy with craftsmen and crew being paid. And the kind of money we are talking about, 10,000,000.00+, that is yacht money.

      • burningrage on 12/09/2023 - 22:59
        +2

        How would you know the inheritee has no incentive to spend? The generalization of a typical "rich" people is so demeaning.

        Do you think the Murdochs, Lowies, or the Rineharts don't spend/invest into the nation? Granted the Murdoch and the Lowies kids still have their parents but they are running the show in totality. Gina Rineharts until recently have been running sponsorship for Swimming Australia (before they decided to turn political)

        Even if you think investing in existing houses doesn't help, it actual helps keeping REAs employed and renters having a roof on their head.

        The adage of "spend money to make more money" don't seem to escape these people.

    • mskeggs on 12/09/2023 - 22:09
      +6

      Morally, taxing the rich who will suffer nothing for paying the tax is vastly preferable to taxing the middle class, who will feel it a bit, or the poor, who will feel it a lot.
      How did you end up thinking wealth accumulation is in any way moral?

      • burningrage on 12/09/2023 - 23:08
        +4

        Wealth accumulation is not a sin. Most people here do that or would you rather live on the edges all the time? For many people, wealth accumulation helps giving them safety buffer/comfort in the event of unexpected things happen.

        You may think $1m or $10m is enough but that's your "version" of enough. If my expenses aren't large, I would be content with $1m or $2m before I retire but to others, like enterprising people, $10m may not be enough if they yearly cost (including running business) is closer to $5-$8m.

        It's like saying banks are rich, pocketing profits of say $4b and while this is large, if you look at their equity of say $100b, $4b is only 4%.

        It is all relative. You and I cannot be the judge of what's enough or what's not. Everyone has different profile.

        • mskeggs on 13/09/2023 - 07:28
          +7

          Wealth accumulation is specifically against most religions tenets. But you are arguing the null case, that we don’t get to decide what another does is moral - when, of course, the point you made was a tax on hoarded wealth was not moral.
          You argued the wealthy had no obligation to others, and the idea they pay more was wrong.

          You can certainly make the case you don’t want the rich to pay more because they or you like money, but you don’t get to dress it up as something moral.
          By definition, if we collect more taxes, then the poor and middle class who can afford them less will pay more if the wealthy don’t.

          I can definitely say it is within society’s power to decide that some shouldn’t have much more than others.
          The morality of wealth taxes is not only not repugnant, it is clearly much more just.

        • OZKap on 13/09/2023 - 12:21
          +2

          Wealth accumulation is not a sin.

          Not that religion should play a role, but:

          Matthew 19:24 New International Version 24 Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God."

          • Dorge on 13/09/2023 - 17:28
            +5

            @OZKap: It's a sin that the Australian Catholic church has an estimated $30 billion in assets and still has tax free status.

      • trapper on 13/09/2023 - 15:17

        Using the force of the state to take any amount of money from people is not moral from the get go.

        We accept that it has to be done to some degree to have a functional state, and we strive to figure out a fairish way to do it.

        But ultimately 'pay me money or you go to jail' is never going to be 'moral'.

        • mskeggs on 13/09/2023 - 15:29

          While an anarchist collective operating with the ongoing consent of the governed would be the most just way to organise society, I would go nuts from all the meetings.
          A democratically elected government might persecute a minority, such as the ultra wealthy, but it is a risk I am prepared to take for a more streamlined government.

          • trapper on 13/09/2023 - 15:53

            @mskeggs: Persecution of minorities may well be a risk you are willing to take, but it is certainly not moral.

    • Eeples on 13/09/2023 - 00:00
      +4

      The argument is that if someone has enjoyed the stability of the Australian economy, laws and infrastructure so they can leave over $5 million to their children thats fine. But perhaps they ought to contribute back, say 30%, above $5million to the system which helped enabled their wealth.

      Sounds moral to me.

      • caitsith01 on 13/09/2023 - 12:04
        +2

        Yep, everyone out here acting like grandma and grandpa slaved in their own personal gold mine for 70 years to earn this money, instead of having the benefits of a stable democratic society to help them along coupled with a bit of skill and a bit of luck. Completely reasonable that once they are dead and no longer need the money, some of it goes back into the 'pot' to be used for the benefit of everyone.

        • LFO on 13/09/2023 - 15:44
          +1

          YES indeed!

          Future inheritance beneficiaries here are horrified their relatives's wealth will not end into their pockets.

          How dare !!!! It is THEIR God given right … and they have already half-spent that money already !!!

      • trapper on 13/09/2023 - 13:26
        +1

        Is there a discount if you moved to Australia later in life then?

      • infinite on 13/09/2023 - 21:29
        +2

        Why does someone who worked themselves to the bone their entire lives and dedicated themselves to decades of financial responsibility for the benefit of their children, need to then hand over 30% of their hard earned accumulated wealth to the government instead of their children when they die?

        The government will have already taxed the earnings that the accumulated wealth came from several times over as it already is, when that person was alive.

        That's completely mad.

  • Trance N Dance on 12/09/2023 - 18:09
    +2

    For property there's already a form of tax on the inheritance, once the deed transfers to the beneficiary there's a stamp duty and capital gains liability (unless in situations that will allow it to be deferred). So if an inheritance tax was to be introduced, stamp duty would need to be abolished or exempted if the idea is to increase tax revenue, otherwise it's just taxes upon taxes for no reason other than to raise money for the state.

    The other thing with inter-generational wealth is that with each passing generation it gets diluted the bigger the families are, so there's already a natural mechanic that's leveling out the amount of inheritance each beneficiary will receive. It's not like rich papa dying will continue to allow his multiple children to all maintain his level of wealth. Implementing a death tax just sounds like a way tall poppy syndrome is manifesting because not all of us have a sizeable inheritance to look forward to.

    • AustriaBargain on 12/09/2023 - 22:07

      The fact you assume a wealthy person will have all their money wealth in residential properties really illustrates the property investment sickness gripping the nation. We complain productivity isn’t high enough but we also invest all our money in houses that have already been built!

      • Trance N Dance on 12/09/2023 - 23:23
        +2

        Not assuming that all their wealth will be in property, merely pointing out one equity type where an estate tax will just be double dipping.

        As for inter-generational wealth dilution, merely pointing out that there's a natural reduction in individual wealth as inheritance is passed to multiple beneficiaries. Nothing to do with property at all.

        • AustriaBargain on 12/09/2023 - 23:28

          Well it's a good thing in my book if people are desensitised to invest in existing properties. You call it a bug, I call it a feature. There's plenty of other things people could invest in that would actually benefit us as a nation other than on paper wealth.

    • turbochris on 13/09/2023 - 08:51
      +3

      The stamp duty on an inherited property in NSW is $50.

      • Trance N Dance on 13/09/2023 - 13:36
        +1

        Well learned something new today, no or nominal stamp duty on deceased estate transfers in most states.

    • KapitaneXtreme on 13/09/2023 - 10:26
      +1

      There are significant discounts or exemptions on stamp duty for inheritance in every jurisdiction.

  • mbck on 12/09/2023 - 18:25
    +10

    No matter how much you want to tax, if the government is spending 380 mil on cancelling the Commonwealth Games…yeah nah it'll all be wasted tax money.

    If the government can show they can actually look after the budget, then maybe then.

    • burningrage on 12/09/2023 - 18:58
      +4

      This! Comment of the day. Biggest problem is wasted tax money ($380m Commonwealth Games, $1b VIC East-West penalty, etc) and overweight bureaucracy.

      However, the fault remains with the voters. What do you expect by voting the Government that can't even run chooks' raffles?

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