Taxes & Capital Gains
What is a tax?
Money people pay to the government
What does “equitable” mean?
Fair (not equal, but fair)
Are house prices rising or falling?
Rising
What is inflation?
Rising prices
What does QDNM stand for?
Quantify, Describe, Nature, Meaning
What is a progressive tax?
Higher income = higher % tax
Difference between income and wealth?
Income = money earned
Wealth = assets owned (house, shares)
Are incomes rising as fast as house prices?
No
What is unemployment?
People who want jobs but can’t find them
What is “Quantify”?
Use numbers/data and dates
Who benefits more from capital gains?
Wealthier people (they own more assets)
Give one way government improves equity
Welfare, tax cuts for low income, housing support
What does a low vacancy rate mean (0.7%)?
Not enough houses
Low growth + high unemployment → what type of fiscal policy?
Expansionary (increase spending)
How many relationships?
2
What is the capital gains tax discount?
Tax ruling that reduces the amount of tax you pay on profit from selling an asset (like a house or shares).
What does this show: Top 20% own most wealth?
Inequality
What problem does this create?
If house prices are rising faster then household incomes?
Housing affordability
High inflation + low unemployment → what type of fiscal policy?
Contractionary (reduce spending)
How many trends/patterns do you need?
2 x trends OR
2 x patterns
OR 1 x trend and 1 x pattern
Why can capital gains increase inequality?
Rich people earn more from assets → wealth gap grows
Why is housing important for fairness?
Owning a house builds wealth over time
Why does housing increase inequality?
Owners gain wealth, renters don’t
What is the RBA inflation target?
2–3%
What must evaluation include?
Using the Criterion + 2 perspectives + Final Decision