By Andrew Mackinnon
Last updated: 9th September, 2023
Capital gains tax (CGT) in Australia constitutes less than 10% of all tax revenue collected in Australia by the Australian federal, state and territorial governments.
In fact, the percentage of total tax revenue collected that is attributable to capital gains tax is so small that I have not been able to find out what this percentage actually is on any Australian federal government website. The Australian federal government has deliberately concealed this information from Australian citizens.
The Australian federal government does not levy capital gains tax on Australian citizens and Australian entities because it needs tax revenue from capital gains tax. The Australian federal government levies capital gains tax on Australian citizens and Australian entities only because it does not want them to have the full capital gains to which they are legitimately entitled. Capital gains do not constitute income and should not be taxed under any circumstances.
Capital gains tax is in direct opposition to property rights and should be abolished. With capital gains tax in force, if somebody saves up some money and then invests it in shares (or any asset), they quite obviously don’t have full property rights to the asset they purchase, because if they later sell this asset for more than they paid for it, the government wants a cut of the capital gain via capital gains tax. If they have full property rights to the asset they purchase, they could sell it and keep the full amount they receive for it without paying any capital gains tax.
Somebody who trades shares in order to make capital gains and who then withdraws a portion of their accumulated capital, in order to fund their living expenses, does not earn any income and should not be taxed on the capital gains they make. Instead, they are consuming a portion of the capital they have accumulated, in order to fund their living expenses. (However, any dividends they receive from any shares that they own do constitute income and should be subject to income tax, which is currently the case.)
The Australian federal, state and territorial governments could manage on income tax only, collected from Australian citizens at a flat rate of no more than 20% on all income earned, which would currently amount to a maximum of about $169 billion per year. The tax-free threshold which exempts all income below the threshold from income tax should be abolished.
(As far as I can tell, the number of Australian citizens who submit a tax return in Australia is currently about 13 million and the average taxable income declared on these tax returns is about $65,000.
If there was only income tax in Australia at a flat rate of no more than 20% on all income earned, then the maximum taxation revenue that the Australian federal government would raise in one year is 13 million x $65,000 x 0.20, which equals $169,000 million or $169 billion.)
The only reason why the Australian federal government also levies capital gains tax, the Goods & Services Tax (GST) and company tax on Australian citizens and Australian entities is that it is sadistically trying to squeeze the maximum amount of tax revenue out of Australian citizens and Australian entities, so that it can spend it as it pleases, such as by showering entities which win tenders to deliver Australian federal government contracts, such as construction contracts, with unearned and undeserved super profits amounting to billions of dollars each year. In this manner, the Australian federal government uses taxation revenue in order to redistribute wealth from Australian citizens and Australian entities who and which pay tax to the Australian citizens and Australian entities who and which benefit from government spending.
In addition to deliberately raising much more taxation revenue than it needs, the Australian federal government has deliberately saddled Australian citizens with around $1,000 billion dollars in debt. The Australian federal government did not incur this debt on behalf of Australian citizens out of necessity. This debt is a deliberate and vehement expression of derision and contempt by the Australian federal government towards Australian citizens. In effect, it is conveying the message to Australian citizens, “We own you and you will continue to pay excessive taxes to us in order to pay the interest on the enormous debt we have incurred on your behalf and in order to repay the principal of this enormous debt.”