Introduction
Breaking news suggests that Australia is planning to introduce a wealth tax for the rich! This proposal has sparked widespread debate, with many people pushing back against the idea.

Wealth Tax Proposal for Australians with Assets Over 5 Million AUD
Before this week's economic reform roundtable meeting, discussions about Australia's tax reforms gained significant attention. Many organizations and experts put forward their tax reform proposals, which not only affect national fiscal revenue but also directly impact Australian citizens’ lives and economic development.

One think tank suggested imposing a 2% wealth tax on individuals with assets exceeding 5 million AUD, with both property and retirement funds counted as part of this asset calculation.

According to the report, even excluding property and pensions, a 2% wealth tax on assets of 5 million AUD would generate 41 billion AUD annually.

The think tank also called for the reintroduction of an inheritance tax, which had been in place at both state and federal levels in the 1960s and 1970s. Additionally, they suggested ending the capital gains tax (CGT) discount system. The study claims that these three tax reforms would raise an additional 70 billion AUD per year, without negatively affecting low or middle-income Australians.

Economists from the University of Sydney and the University of Melbourne proposed a controversial plan before the summit, suggesting that it's time to end the capital gains tax exemption on family homes, calling it a necessary measure to reduce inequality.

Aruna Sathanapally, CEO of the Grattan Institute, advocated for taxing retirement pensions and reducing capital gains tax discounts. She also proposed a dual income tax system, where wages and other forms of income are taxed separately.

These tax reform proposals have sparked differing views among the public.

Diverse Reactions to the Wealth Tax Proposal
Shane Oliver, Chief Economist at AMP, voiced opposition to the wealth tax proposal. He warned that a wealth tax would "damage the economy."

"Taxing the rich sounds good in theory, but all these reforms will further increase taxes on high-income earners," Oliver said. He pointed out that the top 10% of income earners in Australia already pay nearly 50% of the income tax.

"Initially, this might help the budget, but in the long run, it will harm the economy by reducing work incentives."

Oliver also argued that the call for new taxes at the summit was inconsistent with the summit’s overarching goal of improving productivity.

“More taxes will reduce economic productivity,” he concluded.

Oliver further argued that the government had mixed two incompatible goals—budget sustainability and boosting national productivity—at the summit. He added that high earners take advantage of tax breaks like negative gearing and capital gains tax discounts because they already face very high marginal tax rates.

However, Oliver mentioned that he didn’t have concerns about the inheritance tax or the removal of capital gains tax discounts, as long as these measures are introduced while rebalancing income taxes and focusing more on goods and services tax (GST), similar to New Zealand's tax system.

The Australian Institute's Perspective
On the other hand, the Australia Institute believes its proposed tax reforms would align the country with other developed nations.
“Australia is a low-tax country, and it performs poorly when it comes to wealth taxation,” said Matt Grudnoff, Senior Economist at the Australia Institute. “It’s one of the few developed economies in the world that has neither a wealth tax nor an inheritance tax. Correcting this would bring in significant additional revenue for essential services and address Australia's growing inequality.”

Grudnoff pointed out that many countries, including the U.S., U.K., Japan, and most of Europe, have inheritance taxes or similar taxes. He added, "If we want well-funded schools and hospitals, decent, affordable housing for everyone, a fair welfare system, and other things that can improve the lives of millions of Australians, we can have them.”

Conclusion
The debate over these tax reform proposals is ongoing. The key question is which plan is best suited for Australia's national circumstances and how to balance economic growth with social fairness. Further discussions and practical experimentation will be needed to determine the best way forward.