Australia\u2019s wealth gap is widening, and despite promises from politicians, it seems like the issue of inequality might only get worse if we don\u2019t change the way we tax capital. It\u2019s a tough conversation, especially when it comes to taxing inheritances and the rich, but it\u2019s one that\u2019s long overdue. So, why should we focus on taxing wealth rather than income? And how can we make sure the rich don\u2019t keep getting richer while the rest of us keep struggling?<\/p>\n\n\n\n
It\u2019s no secret that income inequality is growing, but what\u2019s more alarming is the shift that\u2019s been happening in the economy. Over the last 50 years, the portion of wealth going to labour\u2014basically, wages\u2014has dropped significantly, while profits from capital (like company earnings and investments) have soared. In 1975, labour took up 62% of the economy, but by 2025, it will be closer to 54%, reports ABC News<\/a>. This change is only set to get more extreme as AI and automation replace even more jobs that once belonged to humans.<\/p>\n\n\n\n The problem? Capital is not taxed enough in Australia. You see, wages are taxed heavily\u2014no surprises there\u2014but capital gains (profits from investments, property, etc.) get the golden treatment. The result is a wealthier class that isn\u2019t contributing fairly to the country\u2019s finances, while everyday Australians are left struggling to keep up with the rising cost of living. If the government hopes to close this gap, taxing capital more is the answer.<\/p>\n\n\n\n