Inheritance taxes and negative gearing: how Australia’s top economists would raise $20bn a year

Australia’s leading economists have proposed measures to raise $20bn annually to fund the country’s economic recovery from the COVID-19 pandemic. Among the recommendations are changes to inheritance taxes and negative gearing. Based on a survey by The Conversation, which sought inputs from 28 economists, the proposed inheritance tax system would exclude assets worth below $2m from taxation while imposing a 35% rate on estates exceeding that value. The economists also suggested reforms in negative gearing that would limit the interest deductions of rental property owners. Many economists have advocated for higher taxes to support public funding for essential services, including education and healthcare. While the proposals may be politically unpopular, on the surface they appear to have significant potential to raise significant revenue. It is anticipated that the proposals will trigger debates and raise questions in the coming weeks for a better understanding of their practicality, impact and effectiveness. The experts indicate that the proposals are vital and timely in generating much-needed resources and aid recovery from the pandemic.