Save
Should the wealthy pay a charity levy?
A world where the wealthiest pay a percentage of income to charity would be a better world, sustainability experts at Monash University have argued.
Should the wealthy pay a charity levy?
A world where the wealthiest pay a percentage of income to charity would be a better world, sustainability experts at Monash University have argued.
Researchers at the Monash Sustainable Development Institute, Professor Dave Griggs and Associate Professor Liam Smith have this week argued that altruism may be a “win-win” situation for everyone.
Proposing a “giving for good” system in which those earning an income of around US$200,000 are required to contribute a small percentage of income on a rising scale to charities of their choice, the researchers said that charitable giving benefits both the givers and the receivers.
“It benefits those doing the giving and those receiving the donations and changes how we see the richest ‘one per centers’. Perhaps more importantly, how they see themselves. The more you have, the more you give, the more you do for society and the higher that society holds you in its esteem,” Mr Smith said.
The researchers aren’t the first to suggest additional levies on the wealthy, and the idea bears a resemblance to the Abbott government’s Budget Repair Levy imposed on Australians earning annual incomes greater than $180,000 between 1 July 2014 and 1 July 2017.
Speaking on the system in the Public Money & Management journal, the researchers noted that the richest one per cent of the world’s population owns as much as the rest of the world combined, according to an Oxfam 2017 report.
“While some question these particular figures, whatever figures you use show a remarkable concentration of the world’s wealth in the hands of very few people.”
Inequality fuels drug abuse, poor social mobility, poor mental and physical health, violence, imprisonment, teenage pregnancies and poor child wellbeing, while better distribution of wealth has the power to boost trust in governments and the use of taxes, the researchers said.
“Clearly some mechanism is required to close the gap between the poorest and the richest in society,” they said, arguing that there are two ways to do this. The economic “pie” can be increased or the size of the “slices” can be reviewed.
In theory, growing the pie should make it possible for the poorest to boost their wealth at a faster rate than the richest. However, the researchers pointed to ACOSS 2015 research finding that that is “exactly the opposite of what is actually happening”.
The other option isn’t perfect either, given the sheer unpopularity of taxes thanks to mistrust in government spending and poor efficiency.
The researchers said that a “charity levy” is a different way of looking at the pie.
“It begins to address the issue of wealth inequality, but there are other aspects that are also potentially attractive,” they said.
“You get to decide where your donation goes, so this system retains an element of individual sovereignty and hence overcomes the lack of trust in [the] government to spend your money wisely.”
A recent Nest Egg poll found that most readers (53 per cent) consider a wealthy Australian to be one earning an annual taxable income of at least $200,000, while 22 per cent think you’re wealthy if you’re earning between $150,000 and $200,000. Only 15.6 per cent think you’re a wealthy Australian if you’re earning between $80,000 and $150,000, while 9 per cent think you’re wealthy if you’re earning between $60,000 and $80,000.
RELATED ARTICLES
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- Accountants Daily 30 Under 30 Awards
- ACE25
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian Aviation Awards
- Australian Broking Awards
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Space Awards
- Australian Space Summit
- Better Business Summit & Awards
- Broker Daily Business Awards
- Corporate Counsel Summit & Awards
- Cyber Security Summit & Awards
- Defence Connect Budget Lunch
- Defence Connect DSR Summit
- Fund Manager of the Year Awards
- ifa Excellence Awards
- ifa Future Forum
- Investor Daily ESG Summit
- Lawyers Weekly 30 Under 30 Awards
- Lawyers Weekly Women in Law Forum
- New Broker Academy
- Partner of the Year Awards
- REB Awards
- Reinnovate
- SME Broker Bootcamp
- SMSF Adviser Technical Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Law Awards
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show
PODCASTS
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.