Capital gains tax and negative gearing benefit the 1% and this chart shows it
Summary
The Australian federal budget includes changes to tax rules for capital gains and negative gearing, which are policies that mainly benefit rich people. Most of the tax breaks go to those who earn more than the middle income, with the top 1% receiving more than half of the capital gains tax benefit.Key Facts
- Capital gains tax (CGT) is a tax on profit when you sell something valuable like a house. Investors get a 50% discount if they keep the asset for over a year.
- Negative gearing happens when someone loses money on a rental property, and they can deduct those losses from their taxable income.
- The top 1% of earners have received over $700,000 in tax breaks from CGT, negative gearing, and trusts during their working lives.
- In 2022-23, the top 10% earned 83% of the benefits from the CGT concession and 37% from negative gearing.
- 71% of tax filers benefited from the CGT discount, and 95% of those were people earning above the median income of $58,216.
- More than half of the CGT benefit went to just the top 1% of income earners.
- These tax benefits are often linked to helping rich investors, causing concern that they may increase housing prices by encouraging speculation.
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