Alan Kohler

Why can't investments, property, dividends, capital gains, et cetera, be taxed exactly like income tax but in a separate bucket?

Why can't all income from assets have a tax-free threshold, e.g.

$18,200 like income, then scale like income tax?

Wouldn't this simplify the tax system, reduce reliance on income tax and still encourage investments?

What am I missing?

Well, that's kind of what capital gains tax does.

The reason I've got the different tax for capital gains tax, capital gains, is the idea that we shouldn't be paying tax on gains that are the same as inflation or the inflation component of your capital gain tax.

Now, you know, you can disagree with that principle or not, but that's the idea.

Anything else?

Yeah, that's right.

And it's worth noting that income actually – tax on income is also subject to inflation, but on the brackets.

So we have bracket creep, you know.

So you're sort of – and that's given back occasionally, but nowhere near enough.

So –

And the main tax distortion in Australia is that we don't tax consumption enough, or as much as other countries do.

I think most countries tax consumption 15%, 20%, some go 25%.

We're at 10% now, so there needs to be possibly more of that, which would take some pressure off income.

Yep, absolutely, absolutely.

Yes.

Well, speaking as one of those who is obsessed with the massive assets...