Richard Denniss had a list of tax rorts in the AFR this morning:
While super is the biggest tax rort, it’s not alone. The 50 per cent tax discount for income from capital gain, which cost the budget $5 billion this year, is as inefficient as it is inequitable. The 100 per cent tax discount on capital gains on family homes worth more than $5 million makes even less sense. And let’s not forget family trusts, fuel subsidies for the miners and that Google pays virtually no Australian tax.
Heaps of wishful thinking there. What really jumped out at me, however, was the notion that the family home be included in the capital gains tax net. What makes this proposal interesting is that if the capital gain were included in your tax, then the expenditure in generating that capital gain should be deductible. So is Richard Denniss really suggesting we extend negative gearing to the family home?
His inclusion of the idea of fuel subsidies for miners indicates that he learned nothing from our debate last week. The Google tax idea is not a go-er. I have a paper on this point (pdf) arguing that there is little actual evidence that corporate tax bases are being eroded.