Speaking to SMSF Adviser, Mark Chapman, taxation products and services manager at Taxpayers Australia, said tax reform is necessary on a national scale and has been “for quite a few years”.
Mr Chapman stressed the importance of addressing the entire tax system rather than just areas that might be “politically expedient” to look at.
The GST in particular should be re-examined, Mr Chapman said, noting the equivalent tax in other jurisdictions sits at approximately 20 per cent.
“The people who would potentially be hit by that the most are those at the lower end of the income spectrum, so I think we also need to look at superannuation tax breaks to determine whether they are currently too generous for those on higher incomes,” he said.
Taxpayers Australia’s superannuation products and services manager, Reece Agland, has previously told SMSF Adviser the “excessively generous” deductions in superannuation available to the wealthy are unsustainable and need to be considered in any genuine tax reform process.
“While most of us will need superannuation to provide for our retirement, the wealthy do not. Without it they would still be able to make adequate preparations for their retirement years,” Mr Agland said.
Mr Chapman also said negative gearing needs to be looked at to determine whether the tax relief afforded to property investors are too generous.
“There’s no economic rationale, there’s no housing market rationale, which should allow people to be able to use those sorts of tax losses quite as generously as they are now,” Mr Chapman said.
“There is a group of taxpayers typically at the top end of the income spectrum who are being excessively advantaged by the use of those reliefs.
“That’s causing I think all sorts of impacts down the line in terms of where the housing market is structured [and] the ability of first-time home buyers to get into the market.”
I hope that Taxpayers Aust has been misreported. The benefits of negative gearing (for a start) are not a benefit at all unless the property increases by the tax benefit (minus the tax saving on the depreciation and special building allowances)
So are the big taxpayers using negative gearing to grow wealth? My experience shows that they are smarter than that. Generally the smaller high income miners etc are doing the gearing and losing plenty.
Superannuation tax breaks must remain so that we ALL will not retire on a Centrelink pension.
There is nothing wrong with the top tax payers receiving tax benefits if they experience losses or if they spend money on tax deductions.
I really think that there is some view out there that those who make money are the bad guys. Well some “bad guys” have paid tax by the plenty and should be able to retire in peace.
Criticism by those in high places must be balanced, and they must use common sense
To a point I agree. Making superannuation tax free once a pension has started is overly generous and,as the population ages and more money is tied up in super, ultimately unaffordable.
If we are looking at the tax system as a whole, including raising the rate of GST, then surely the rates of superannuation also need to be considered.