A Parliamentary Budget Office analysis has revealed that the controversial capital gains tax (CGT) discount policy will cost Australian taxpayers an eye-watering $247 billion over the next decade. What started as a way to encourage investment has evolved into a financial burden on ordinary Aussies. With housing prices soaring and the wealth gap widening, many are now questioning if the CGT discount is contributing to the problem.<\/p>\n\n\n\n
The CGT discount, introduced in 1999 by the Howard government, allows property investors and asset holders to pay only half the tax on capital gains from assets held longer than a year. On paper, it was supposed to boost investment and stimulate the economy. Fast forward to today, and this policy has resulted in an estimated $247 billion cost to the federal budget over the next 10 years. That\u2019s $247 billion that could have been spent on public services, infrastructure, or even housing affordability initiatives, but instead, it\u2019s going largely to Australia\u2019s wealthiest investors.<\/p>\n\n\n\n
The CGT discount has long been criticized for disproportionately benefiting the top 1% of earners, who have accounted for nearly 60% of the benefits. Meanwhile, the top 10% of earners collectively take home 82% of the entire discount, details 9News<\/a>. The disparity in who benefits from the CGT system is hard to ignore. This is a policy that was supposed to help create wealth for everyone, but it seems to be doing the opposite, with ordinary Australians paying the price.<\/p>\n\n\n\n