A fascinating research has revealed that while older people are keen to spend their well-earned savings, rather than passing them on to their kids, the younger generation is just fine with this scenario, claiming that no one owes anyone anything.
Cash in on the kids’ inheritance and spend up big on the retirement plans, this is the message coming from a study by researchers at the University of South Australia.
The study explored contemporary attitudes towards wealth transfer taxation in Australia, finding that public resistance to inheritance and estate taxes may have declined in the 40 years since they were abolished in Australia.
Inheritance is the only major form of income that is untaxed in Australia.
“The lack of interest in giving or receiving inheritances meant that most participants saw no reason to object to estates being taxed, which opens potential opportunities for much-needed tax reform,” said social policy expert Dr Veronica Coram.
“Inheritances generally go to people who are already well-off and don’t need them; they encourage inequality and inhibit social mobility,” Coram added.
The researchers talked to young adults and senior Australians and two thirds of them thought Australia should consider reintroducing taxes on estates worth more than $3m, while only one in ten were definitely opposed.
“Reintroducing inheritance or estate taxation is a way of increasing government revenue, while reducing a key driver of inequality at the same time,” Coram noted.
Historically, inheritance taxes have been considered ‘political suicide’.
“But perhaps their time has come, ironically due to a growing individualism and associated decline in the assumption that family members should provide for one another,” Coram said.