'Death Tax' could return to THIS country after 46 years. Here's why it was abolished

Australia is trying to raise $70 billion in tax revenue, and some experts are calling to bring back a law from the 1970s that could help achieve this goal. A report from the Australia Institute says that if the country reimposes the inheritance tax, it would be able to raise $10 billion. This would also reduce "intergenerational inequality" as the wealth passes on to the next generation. Additionally, it added that a whopping $41 billion a year could be raised if a two per cent wealth tax in imposed on people with a worth of more than $5 million. The calls for these taxes come ahead of the government's landmark economic roundtable in Canberra, which will see participation from several business, union, and community leaders. Notably, an inheritance tax used to exist in state and federal form in the 1960s and 1970s in the country. Also Read: Australia cuts interest rates amid economic slowdown and inflation relief

What is Inheritance Tax, or “death tax”?

An inheritance tax is the tax a person pays to the government after they inherit money or property from a deceased person. The tax has been panned by some critics, who have dubbed it the "death tax". Advocates of the tax, as mentioned in the report, believe that this imposition could be done without hurting the low- or middle-income citizens. Australia Institute senior economist Matt Grudnoff told Nine News that Australia "does not do a good job of taxing wealth," and is "one of the few developed economies in the world which has neither a wealth tax nor an inheritance tax." He urged to correct this practice as a change could "raise huge amounts of extra revenue for essential services and ease growing inequality in Australia." Also Read: VIDEO: Meteor jolts Earth in Victoria, Australia. Was it linked to meteor shower?

Why is Inheritance Tax called “death tax”?

The report also suggests a way to reduce property prices and make housing more affordable. The researchers stated that scrapping the capital gains tax discount would raise another $19 billion a year, thus helping people to crack the property market. Inheritance tax, or "death tax", has been a point of debate in the country for years. By 1979, it was abolished in all Australian jurisdictions because of the objections raised by the public, claiming that it could negatively impact family businesses. Critics argue that families that are handed down the businesses could end up giving up their assets or going out of business because of high tax requirements.