Hasn’t the appropriate amount of income tax already be paid by the person who saved the inheritance?

The way Australians spend before they retire, and their assumptions that they will be able to live as well, if not better, in their retirement than they did while they were working, makes those ‘intentions’ to leave money behind for their families a huge joke. These poor, naïve and economically challenged people are still ignoring the warnings that they will not have enough money to live the lifestyles they plan, let alone leave anything except bills and reverse mortgages behind them for the survivors.

Most people simply do not have enough super, and they will need a part pension, at least, to make ends meet. It’s all talk, folks.

Inheritance tax is a disgusting idea, hitting only those who have taken the trouble to plan financially; 80% of the people will not have enough to tax, as anyone who takes note of the way people throw around money they don’t actually have, as politicians do the same thing and tell the fools how good the economy is.

Of course there is “…a widespread distaste of unearned income or wealth windfalls...” – by people who hate anyone with forebears with the skills to accumulate money to leave behind; the ones who are already bludging off money belonging to other people, doled out to them by socialist politicians who stay in power because of their largesse with other peoples’ money.

People who look to punish the rich – or just people careful with their money – would be no better off, because they (the freeloaders, socialists and other no-hopers) would blow in a few weeks it what took others a lifetime to accumulate.

Hi Julie,

When you speak of “inheritance”, “wealthy households” and “estates” I immediately see these as emotive words. I also see much of the rhetoric surrounding many of these debates as rude, trivialization of achievements and a threat.

Allow me to explain. Our first house was a tip in the outer suburbs, we had some “hand me down furniture” but in our free time we did the place up and sold it. We did this about twelve times in 40 years. After finishing uni. I worked in corporate, in the early days for much less than some of my mates were earning “making things”. Whilst working I also did three diploma courses and another degree.

I regularly worked 70 hours a week, was either interstate or overseas for about 100 days a year, we made some sacrifices for the kids’ education, paid most of our income tax at a marginal rate of 48c in the dollar, got no tax breaks, paid for our own super, paid for private health care and now own our home.

We are not state dependent in any way and anything we have is fully tax paid.

So when I say “rude”, I mean that whatever we decide to do with anything we own must be our decision, it is absolutely nothing to do with anyone else. When I say “trivialization” I mean we worked damn hard for whatever we have and were not given anything. And when I say “threat” I mean that there are those who see what we have as ideologically bad and want a slice of our action.

We all have the same chances, we have to take them and work for them. If we chose to give our kids and grandkids a leg up, that should be our choice.

On the other hand there are lots of little green, socialist envy monsters out there who want more of other peoples money to go into the trough that their state dependency snouts are buried in.

One of the problems with surveys by financial orgs is that they are self serving. Some kids, by the time they turn 50 or so with the extended longevity of their parents, might get $500K, but most won't.

According to Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) Survey, the mean inheritance peaked at $109,285 in 2006 was, up from $50,861 in 2002. That's before the GFC. Consider the Boomers will chew through about 3-4 per cent of out GDP until about 2050.

I wouldn't be lowering taxes just yet.

Grumbler
It is by no means likely that the person leaving the inheritance has paid the 'appropriate' amount of income tax. Take negative gearing, for example, which is only available to those with some disposable income to get a foot on this lucrative ladder: they can reduce their income tax by claiming against their investment mortgages. The loss of tax revenue is made up by other taxpayers and they get to accumulate a property portfolio. People with a lot of wealth can afford top financial advice and arrange their affairs to pay very little tax. I have no problem with people having buckets of money, but I do object to their ability to avoid paying tax under our current system.

We need a complete overhaul of the tax system rather than just tacking on an inheritance tax. The Henry report provided a blueprint for tax reform, but none of our politicians have the guts to implement it.

Candide,
Let's push for a flat tax. No negative gearing no nothing, the same for everyone.