There are growing calls to increase taxes on the wealthy in advanced economies such as the United States and Australia. For instance, US Congresswoman Alexandria Ocasio-Cortez controversially wore a white evening dress with the words Tax the Rich written in red across it to the 2021 Met Gala. To get an informed and objective view on taxing the wealthy, I invited Professor Miranda Stewart from the University of Melbourne Law School onto my Economics Explored podcast for Episode 112 Taxing the Rich – Billionaire and Inheritance Taxes. Miranda is the Director of the Tax Group at the Law School, and she is also a Fellow at the Tax and Transfer Policy Institute at the Crawford School of Public Policy, the Australian National University.
I reached out to Miranda after I read her comments in an Australian Nine media article titled Death duties: Why experts think this tax should be re-introduced. We haven’t had death duties in Australia since Sir Joh abolished them in Queensland in the seventies and other states followed his lead. I expect there will be growing pressure to re-introduce politically unpopular death duties in Australia over the coming decades, particularly given what John Quiggin has labelled The coming boom in inherited wealth. This is definitely an issue to watch.
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Gene, tax the rich is what happens all the time. Whilst, the rich may have ways to minimise that with depreciation allowances etc they still pay more tax than “the not rich” who often are net recipients of welfare. At what high bar would this be brought in? $1B or $1M as it depends on your definition of rich. Many people I know in my age bracket would be considered rich to the young who have yet to make their mark. What I do know is that we would need to increase the number of University places for lawyers and accountants as that will be a growing industry as people attempt to get around any “death” tax laws.
Good points Russell. I think I made the point in the episode that there’s probably more capacity to increase taxes on the (ultra) rich in the US than in Australia where our tax system is much more progressive. The carried interest and stepped-up basis tax rules in the US mean that, arguably, many of the super rich hedge fund managers and tech titans don’t pay their fair share.