#CapitalGains #IncomeInequality #TaxReform
Hey everyone! 😊 Have you noticed that recent data suggests capital gains are now surpassing wages? It’s a striking trend, especially considering most of these gains seem to flow primarily to the wealthier folks who often don’t pay much in taxes. Let’s break this down a bit!
What’s Going On?
- Capital Gains vs. Wages: Capital gains are profits from investments like stocks or real estate. When these gains exceed our hard-earned wages, it raises some eyebrows.
- Who Benefits?: It looks like the majority of these capital gains go to the rich. While some of us struggle with everyday expenses, wealthier individuals often enjoy untaxed or lightly taxed returns on their investments.
- Tax Implications: This often leads to a situation where the rich are getting richer, while the rest of us are left to navigate rising costs without much assistance.
Why Does This Matter?
- Income Inequality: When capital gains surpass wages, it widens the income gap. This disparity affects overall economic stability and social equity.
- Funding for Public Services: If the wealthy aren’t contributing their fair share through taxes, essential services like healthcare and education can suffer.
Possible Solutions
- Reform Tax Policies: Implementing a more progressive tax system where capital gains are taxed at rates comparable to regular income could help.
- Enhance Transparency: Encourage more disclosure on how capital gains are realized and taxed, ensuring everyone is playing by the same rules.
Let’s Discuss!
What do you think about this shift in capital gains versus wages? Do you have any tips on how we can advocate for fairer tax policies? Share your experiences below! 👇 Let’s brainstorm together!
For some reason everyone always focuses on the capital gains “discount” of 50%, which is meant as an inflation adjustment, instead of the 100% discount that applies to a large percentage of capital gains (PPOR).
And yet the top 10% wage earners pay 50% of the wages tax.
My place has appreciated around 600k+ in 6 years. Less than I earn before tax, but sure as hell I’ve done little to deserve it. None of this “wealth” is productive.
The problem was trusting the Australian institute to deliver you correct information
I don’t get it, isn’t superannuation meant to be a good thing? We’re currently in the middle of an increase in the compulsory super contribution rate, presumably because people see it as a good idea to have more super.
But then when all those investments start to make gains, that’s a bad thing?
But apparently we aren’t in an asset bubble…
Why should my high risk share portfolio be taxed? By all means remove the perverse incentives for taking on huge mortgages, but in return give us investors a tax sheltered account like in other countries.
I’m actually in support for getting rid of CTG discount on property or extending it to a 10 year hold
Am I the only one that has no idea how to read that second graph?
Time to pull the plug!
They say they get this data from tax records, but in the article suggest that this includes unrealized capital gains. Which is it?
I’d like to believe this because it aligns with my internal bias, but given the BS that the Australia Institute constantly blow about the fuel excise credit being a “subsidy”, I have to take this with a huge grain of salt.
This is interesting but think a couple of graphs are used that don’t relate 100% to each other.
The first looks at total capital gains vs wages. The second (from 2020-21) looks at REALISED capital gains by income.
Not sure it can be presented in a way that says the same proportion have had unrealised capital gains, as those on higher incomes are more likely to realise capital gains through more frequent disposal of assets.
Both graphs are interesting in their own right, however.
I wish they had a breakdown by asset type as accumulating shares and building up super isn’t a bad thing.
Most people with an investment property are working class… go be one of them.