A qualitative exploration of attitudes towards wealth transfer taxation in Australia

ABSTRACT

Inheritance drives wealth concentration and economic inequality, meaning there is a strong case for wealth transfer taxation as an important element of government redistributive policy. In contrast to many OECD countries, Australia has not had estate or inheritance taxes for 40 years and little is known about contemporary public attitudes towards wealth transfer taxation. This paper draws on qualitative interviews investigating the attitudes of young adult and senior Australians towards wealth transfer taxation. Both groups supported the idea of reintroducing wealth transfer taxation in Australia, largely due to an almost universal absence of expectation that people would or should leave bequests to their descendants. These findings raise the possibility that considering the reintroduction of appropriately targeted wealth transfer taxation in Australia at a time when the Commonwealth Government is experiencing acute fiscal pressures may not generate as much public resistance as might have been assumed.

财产继承推动了财富的集中和经济的不平等。这意味着需要政府将财富转移税作为再分配政策的重要部分。和许多经合组织国家不同，澳大利亚四十年间没有房地产及遗产税。当前公众对于财富转移税的态度尚不为人知晓。本文通过定性访谈调查了青年人和老年人对财产转移课税的态度。两个群体都支持对财产转移重新征税的想法，这主要是因为他们普遍认为人们不会也不该将财产留给后代。这些发现意味着当联邦政府经历严重财政危机的时候，在澳大利亚重新实行目标合理的财富转移征税制度，很可能不至像一些人以为的那样会引起公众的抵制。

KEYWORDS:

• Redistributive policy
• policy attitudes
• wealth transfer
• estate tax
• inheritance tax

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Empirical analysis of probate records in the state of Victoria in 2006 found the mean age of beneficiaries was 53.5 and the mean value of estates was AUD $281,902, with 57% held in real estate (Baker and Gilding 2011).

2 A third type of private transfer also has an impact on wealth distribution: inter vivos gifts made while people are still alive.

3 Not least because the very wealthy generally prefer to hide their riches out of sight of the tax office.

4 With limited exceptions. For example, there may be a capital gains tax liability if the beneficiary is resident overseas, and the way inherited property is disposed of affects whether capital gains tax is paid.

5 O’Dwyer contends that significant inheritances are so unusual that inheritance has a limited impact on wealth distribution across society as a whole.

6 A final estate is one where there is no surviving spouse.

7 This is not strictly true in the case of inheritance taxes – the payee has neither previously received the income nor been taxed on it. Even if it were the case, an objection to double taxation should extend far beyond wealth transfer taxes. For example, people are routinely subject to both income tax and sales or consumption tax.

8 The Anglo-Saxon approach to inheritance has traditionally emphasised testamentary freedom more than the Continental approach, which is more cognisant that inheritance is a social practice and tends to place greater restrictions on how people can dispose of their estates (Cremer and Pestieau 2006, 1125).

9 Some people appear to have evaded wealth transfer tax by timing their deaths appropriately! Research in both Australia and Sweden found that deaths spiked immediately after the repeal of inheritance taxes (Gans and Leigh 2006; Eliason and Ohlsson 2013).

Additional information

Notes on contributors

Veronica Coram

Veronica Coram is a Research Fellow at The Australian Alliance for Social Enterprise, University of South Australia. Her research focuses on political attitudes, social policy and social inclusion.