Exposed: Labor’s radical Left tax plan that’s so extreme no other nation has ever attempted it. We explain the raid on YOUR assets that Albo is hoping is too complex for voters to understand

Anthony Albanese’s Labor government is so radical that it wants to introduce a tax unlike any other country in the world. And chances are you’ve never heard of it.

Australia’s most left-wing government has been trying to quietly introduce a tax on ‘unrealized profits’ since Gough Whitlam ran up the national debt in the 1970s.

In layman’s terms, Australians would have to pay tax on the increased value of an asset they still own and have yet to sell, namely retirement savings above a certain threshold.

That’s an unprecedented departure from the usual approach where someone pays capital gains taxes on an investment property or shares only after selling those assets – and not before.

The proposed tax has flown under the radar and has been overshadowed by Labour’s plans to hike taxes on Aussies with more than $3 million in their super. The press barely mentioned it early last year and there has been virtually no mention of it since.

A Google search for “unrealized gains” yields a single news result from a mainstream media outlet and a handful of blog posts – remarkable given the implications for people planning their retirement.

And the proposed tax is not only mysterious, but also confusing.

Professor Robert Breunig, director of the Australian National University’s Tax and Transfer Policy Institute, says Labor’s policies are very confusing – and he has been a tax expert for 26 years.

“I don’t think they’ve really thought through the implications of how difficult this is going to be,” he tells me.

“Frankly, we are in a world where the government continues to introduce policies that they have not really thought through how they are going to implement.

“They just leave the mess up to the people on the ground to sort it out.”

There are fears that the Labor system could be so complicated that even the Australian Taxation Office would struggle to apply the new laws.

Professor Robert Breunig, director of the Australian National University’s Tax and Transfer Policy Institute, says Labor’s policies are very confusing – and he has been a tax expert for 26 years.

“Making things too complex makes things expensive, makes the system difficult to run and makes it difficult for the ATO to carry out compliance checks,” notes Prof Breunig, widely regarded as Australia’s most respected expert. the field of public finances.

“You want to avoid those things.”

Professor Breunig has contradicted Treasurer Jim Chalmers – who argued last year that a tax on unrealized profits would apparently be simple.

“That is the advice of the Treasury, working with other relevant agencies, that this is the most efficient, simplest and best way to go about this, and so that is what we intend to do,” said Dr . Chalmers to reporters in Brisbane.

Dr. Chalmers, who was promoted over former Labor Prime Minister Paul Keating, acknowledged in June that crossbench senators were concerned about the policy.

“We are obviously having discussions across Parliament to try and legislate for it,” he said.

“And this is one of the issues that has emerged: the issue around unrealized profits.”

He failed to acknowledge how Keating, as treasurer before becoming prime minister, only applied capital gains tax to assets after they were sold, when Labor introduced that policy in 1985.

While the Greens want to lower the threshold for unrealized profits to $2 million, Teal MPs are concerned that the Better Targeted Superannuation Concessions Bill is too complicated and will backfire.

The federal government announced a plan early last year to double the tax to 30 percent for Australians with superannuation balances of more than $3 million.

But hidden in the details was a plan to tax unrealized gains on self-managed super funds.

The clause, known as Division 296, will make Australia the only country to tax unrealized gains on retirement savings.

“It is quite unusual worldwide to tax unrealized profits,” says Professor Breunig.

If the Labor legislation is passed by Parliament from July 2025, anyone with more than $3 million in pension savings will be taxed on super savings above that threshold.

That means someone with nearly $3 million in retirement savings would have to divest some of their retirement savings to fall below this threshold.

In layman’s terms, Australians would have to pay tax on the increased value of an asset they own and have yet to sell, namely retirement savings above a certain threshold (stock image)

This would create a new level of complexity if assets were difficult to sell and someone suddenly found themselves with a retirement savings balance of more than $3 million.

“It can potentially be very complicated if people have very illiquid assets,” says Prof. Breunig.

“So if you had big blocks of houses, it’s hard to sell a two-hundredth of your properties to pay your tax bill.”

“It’s going to be quite confusing: people have small businesses within their self-managed super funds.”

Professor Breunig gives an example of how complex the proposed tax could be in practice someone with a self-managed super fund who owned a farm would struggle to calculate how much the property was worth in a financial year if there were no other similar farms in the area that had recently been sold to compare it to.

“It’s often a pretty rough approximation,” he adds.

“Valuing those things is going to be difficult, and for people who don’t have liquid assets, paying for them is going to be difficult as well.”

Sweden and Germany taxed unrealized capital gains in the 1970s and 1980s, but the policy was notoriously difficult to implement.

And France still has a wealth tax that applies to assets worth more than €1.3 million (AU$2.1 million).

But even European countries, known for raising income taxes to finance more services, aren’t touching down on retirement savings in this way.

One of Australia’s most respected tax experts has contradicted Treasurer Jim Chalmers (pictured), who argued last year that a tax on unrealized profits would apparently be simple

US Democratic presidential candidate Kamala Harris is campaigning to tax unrealized gains on wealth – but only on the ultra-rich with assets worth US$100 million (AU$151 million) or more.

But then again, the vice president has not chased retirement savings in her campaign against Republican Donald Trump.

Shadow Treasurer Angus Taylor compared the tax on unrealized gains on super to something you would find in a dictatorship.

“That’s why governments around the world have always been very reluctant to pursue unrealized capital gains, unless there is some crazy, left-wing communist dictatorship,” he said.

‘So this really crosses the line seriously. It definitely crosses the line.”

Taxing unrealized profits is a policy so radical for Australia that even the Treasurer of the Whitlam government, Jim Cairns, a self-described socialist and former academic, did not even go there, preferring to vainly fighting for higher income taxes and price controls.

This former Labor deputy prime minister, who once signed up to join the Communist Party, at least recognized that the electorate was generally suspicious of his side of politics.

“History is not on the left’s side,” he said.

If only the Albanian government had the same political self-awareness.