Policy Proposal: Prohibition of Inheritance Tax in Australia

Policy Title: Inheritance Tax Ban Policy

Policy Objective:
To enshrine in Australian law a prohibition on the introduction or implementation of inheritance taxes (in any form) by the Federal Government or State Governments, ensuring that wealth transfers between generations are not subject to additional taxation.

Preamble:
Australians work hard to build wealth over their lifetimes, paying income tax, capital gains tax, and other levies on their earnings and investments. Taxing inheritances, which represent after-tax wealth, would amount to double taxation and would place an unfair burden on Australian families. This policy aims to prevent the introduction of inheritance taxes at any level of government, fostering fairness and protecting generational wealth transfers.

Policy Statement:

1. Federal Prohibition on Inheritance Taxes:
   a. The Federal Government will not impose inheritance taxes, estate taxes, or any equivalent levy on the transfer of assets following the death of an individual.
   b. The prohibition will extend to any federal legislation that seeks to tax inheritances indirectly through other mechanisms.

2. State and Territory Prohibition on Inheritance Taxes:
   a. State and Territory Governments will be prohibited from introducing inheritance taxes, estate taxes, or any equivalent levy under their jurisdiction.
   b. This prohibition will be enforced through constitutional amendments or federal legislation under the powers granted to the Commonwealth.

3. Definition of Inheritance Taxes:
   For the purpose of this policy, "inheritance taxes" include any levy, duty, or charge imposed on the transfer of assets, property, or wealth from deceased individuals to their beneficiaries.

4. Rationale for Prohibition:
   a. Wealth passed down through inheritance represents earnings that have already been subject to taxation.
   b. Introducing inheritance taxes would create a punitive financial burden on families and discourage saving and investment.
   c. A prohibition aligns with principles of economic fairness and stability, promoting family welfare and protecting generational wealth.

5. Implementation Framework:
   a. Legislation will be introduced to amend relevant sections of the Income Tax Assessment Act and State and Territory Taxation Acts to reflect this prohibition.
   b. The policy will ensure no legal loopholes exist for the reintroduction of inheritance taxes in disguised forms.

6. Review and Safeguards:
   a. The policy will be reviewed every five years to ensure compliance across federal, state, and territory levels.
   b. A federal oversight body will monitor state and territory governments to ensure adherence to the prohibition.

Expected Benefits:

1. Protection of Family Wealth: Families can transfer assets without the financial strain of additional taxes.
2. Economic Fairness: Prevents double taxation and upholds equity in the tax system.
3. Encouragement of Saving and Investment: Families will be incentivised to save and invest without fear of punitive taxes on generational wealth.

Conclusion:

The prohibition of inheritance taxes across all levels of government is a commitment to fairness and respect for hard-earned wealth. By ensuring that Australians are not subjected to double taxation, this policy safeguards family welfare and promotes confidence in the nation's tax system.