Australia's proposed tax changes - our parliamentary sumission
And how you can have your say!
Australia is looking to significantly increase capital gains taxes. This adversely impacts all investors. The changes not only make investors poorer, but make Australians as a whole poorer. They undermine productivity, and are tantamount to a tax grab. But, the problem is tthat they doom Australia to a shrinking economic pie by deterring founders and investors.
The legislation has been referred to a Senate Inquiry. Anyone can submit their views here. We have prepared a tool to help you prepare a submission. You can find it here. More information about this is below.
Our parliamentary submission
Our submission focuses on the impact of the capital gains tax (CGT) changes on investing, including on investing in startups. We strongly advise against increasing CGT, argue that CGT should be reduced, not increased, and view the CGT changes as extremely negative for investing in Australia. Our concerns are significantly more severe in relation to startup and venture investing. We argue that the legislation is unsalvageable, should be abandoned, and that any changes of this nature be taken to an election and carefully considered. We also contend that Australia’s CGT rate was already too high and should be significantly lowered. Australia’s productivity was already low; the proposed changes would doom Australia to a stagnant, moribund, economy.
In short, our recommendations are:
Any tax increase must be put to an election. To do otherwise is undemocratic.
The proposed laws should not be passed. At present, they are unsalvageable.
Capital gains should only be taxed on real gains. This part of the proposed legislation moves in the right direction (but see other recommendations).
Capital gains tax rates should be lowered relative to prior rates and short term gains should not be taxed differently from long term gains. Capital gains tax rates must compete with other jurisdictions that attract capital, meaning that CGT rates must not be higher than around 15% of real gains.
Capital gains tax rates must not be higher on ‘good’ decisions than they are on ‘bad’ decisions. To do otherwise would be to impose a productivity tax.
Losses on investments must be able to be indexed to inflation much like gains, meaning investors can offset the real value of losses. To do otherwise, is to significantly increase effective tax rates.
You can read the full submission below
Have your say!
It is important that you let parliament know about these bad changes. They significantly harm Australia and set Australia back.
To this end, we have prepared a tool to help you prepare a submission. Using this tool, you can select your key concerns about the legislation and generate a submission. The submissions so generated involve iterations on carefully curated concerns about the proposed tax hikes. The backend involves using generative AI (specifically Claude Haiku) to text that covers concerns about the legislation. It is designed to create unique submissions.
We encourage you to make a submission. We must let parliament know about how bad their proposed changes are!