The Impact of Tax Rate Changes on Capital Gains Realisations: Evidence From Australia

32 Pages Posted: 17 Jan 2019

See all articles by John Minas

John Minas

University of Tasmania

Youngdeok Lim

UNSW Australia Business School, School of Accounting

Chris Evans

University of New South Wales

Date Written: August 9, 2018

Abstract

Australia experienced a major reduction to the rate at which capital gains are taxed on the introduction of the “50% CGT discount” in the 1999‑2000 fiscal year. Claims made at the time of this effective capital gains tax (CGT) rate reduction suggested it would lead to increased realisations as well as an increase in tax revenue. Using time series data from 1988‑89 to 2014‑15, the authors estimate the capital gains realisations response for Australian personal taxpayers. The authors’ elasticity point estimates imply overall revenue losses from the introduction of the CGT discount.

Suggested Citation

Minas, John and Lim, Youngdeok and Evans, Christopher Charles, The Impact of Tax Rate Changes on Capital Gains Realisations: Evidence From Australia (August 9, 2018). Australian Tax Forum, Vol. 33(4), 2018. Available at SSRN: https://ssrn.com/abstract=3311234

John Minas (Contact Author)

University of Tasmania ( email )

Newnham Drive
Newnham
Launceston, TAS
Australia
+61 3 6324 3221 (Phone)

Youngdeok Lim

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia

Christopher Charles Evans

University of New South Wales ( email )

School of Taxation and Business Law
Australian School of Business, UNSW
Sydney, NSW 2052
Australia

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