French economist recommends hike in taxes on wealth property owners to curb rising inequality in Australia

Inequality in Australia has risen to its highest level in 50 years, warns French economist Thomas Pikkety, author of the 2014 bestseller “Capital in the Twenty-First Century.” To address the situation, he recommends increasing property taxes on wealthy property owners.

On one hand, fewer Australians could actually afford to move from renters to property owners, especially among young adults who need parental help to purchase property in cities such as Sydney and Melbourne. On the other hand, rich Australians use their property to transfer their wealth to their children.

“For the young generation today, it's much more difficult if you want to access property and become an owner ... if you don't have family wealth, and if you just have your labour income, as compared to the generation of your parents or your grandparents, this is much more difficult,” Pikkety points out.

Although it is also a common practice in other countries, Pikkety says the tax system is often “manipulated in favour of the most favoured.” It is a serious problem globally and must be corrected if nations want some sense of fairness in the tax system to prevail.

If the current system remains unchanged, the government risks losing trust in the country’s tax system. “People at the bottom or the middle feel that people at the top are paying less than they should,” Sydney Morning Herald quotes the economist at Paris School of Economics.

He says the time to reform Australia’s tax system to reduce income taxes on lower- and middle-income earners and increase taxes on the rich is now. Pikkety explains it is timely to reform the system now when property values in Australia are historically very high.

Since Pikkety’s book has become the most important economics book for cinema as well, a New Zealand movie maker signed in mid-September an agreement to direct a documentary adaptation of the book. Justin Pemberton, co-director of “Chasing Great,” a biopic of Richie McCaw, will be joined in the venture by Matthew Metcalfe, producer of “The Dead Lands” and “Beyond the Edge, after the two acquired the rights to the book in 2013, Stuff.co.nz reports.

Pemberton and Metcalfe announced at the Cannes Film Festival in May that they are working on the documentary project. “It’s an epic story that spans 400 year, and capitalism is a mesmerizing protagonist. It’s both the beauty and the best,” Pemberton says.

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Source: Municipal Property Assessment Corporation