Reintroducing death duties in Tasmania would destroy businesses and farms and force grieving relatives to sell family properties, a taxpayer group has warned.
Bringing back death duties, or estate taxes, for estates worth more than $1 million was one of three suggestions for Tasmanian tax reform detailed in a report by prominent economist Saul Eslake.
He also suggested:
- replacing stamp duty on the transfer of land with a broadly-based land tax which would take in currently exempt owner-occupied housing; and
- extending payroll tax to medium-sized and small businesses, while cutting its rate.
Australian Taxpayers' Alliance policy director Emilie Dye said anyone considering an estate tax was "dead wrong".
"Estates are not liquid assets," Ms Dye said.
"In countries where the estate tax exists, kids who have just lost their parents often also lose their family's life work, forced to sell to pay the estate tax.
"Estate taxes don't make the rich pay their fair share; they destroy family farms and businesses and end family legacies."
Mr Eslake argued his proposals would help make the state tax system fairer and more efficient, and were not aimed at increasing the overall tax take.
Ms Dye said: "We need not only lower taxes, but better taxes."
"With the economy in a recession, we cannot afford to waste money on inefficient taxes."
She had similar views to Mr Eslake on stamp duty and land tax.
"Stamp duty costs the Tasmanian economy more than it brings in revenue," she said.
"The elderly live in homes that no longer fit their needs because it costs too much to downsize and young couples, hoping to start a family, rent because they cannot afford a home of their own."
Ms Dye said land tax was Australia's best tax.
"It doesn't stop people from purchasing homes, or from improving their properties," she said.
"By broadening the base of the land tax, Tasmania could make up a portion of the revenues lost from abolishing the stamp duty and make housing more affordable for everyone."
She was scathing about payroll tax.
"Of all the things we can tax, why jobs?" she said.
"The payroll tax fines businesses for hiring.
"Workers ultimately pay for the payroll tax with lower salaries and fewer jobs.
"If the Tasmanian government wants to get people back to work after COVID-19, they should cut the payroll tax."
Ms Dye said lowering and expanding the payroll tax would be a step in the right direction.
"The government shouldn't punish people for working in medium to large-sized companies," she said.
"The lower and more dissipated a tax, the less painful and the less it distorts choices."