Australia's tax system already hits wealth. A billionaire levy alone won't fix it

One option is a wealth tax applied to billionaires directly, capturing wealth accumulated outside the annual income tax system. Another is taxing unrealized gains each year as they arise, treating appreciation like wages. Few countries attempt this. Assets are hard to value, valuations bounce from year to year, and annual mark-to-market taxation creates liquidity problems for owners who cannot sell a share of a private company to pay the bill.

Australia already taxes some wealth

Australia has several wealth taxes in place: land tax on investment properties, a tax on superannuation balances above $3 million, and tax on inherited super benefits. The family home, the largest store of household wealth for most Australians, is excluded from all of them except stamp duty at purchase.

The system taxes savings inconsistently. Real estate, which has high barriers to entry, gets favorable treatment. Savings accounts, which are accessible to everyone, face heavier taxation. Recent changes to negative gearing and the capital gains tax discount move in the right direction, but they do not resolve the structural inconsistency.

The real question

A billionaire-specific levy, on its own, does not fix the broader problem. The Australian tax system already taxes wealth in some forms and exempts it in others. The inconsistency applies across the entire economy, not just to the top 0.01%. Building a system that treats different forms of wealth more consistently would reduce inequity and improve economic growth. That task is larger than any one levy.

Treasury officials have examined the question internally but have not proposed legislation. The U.K. and California debates will provide case studies on design, enforcement and revenue outcomes. Australia can learn from both before deciding whether its own approach needs a change.