Taxing personal capital gains in Australia - is the discount ready for reform?

The 50 per cent Capital Gains Tax discount for individuals has become an entrenched feature of the Australian tax system, despite the fact that there was no promise of it being a permanent tax reform at the time of its introduction in 1999. Although the prospects for reform of the individual CGT in the immediate future appear limited, this paper compares a number of alternative options for taxing individual capital gains. The paper argues that the CGT discount need not be considered a permanent tax change. The effects of the CGT discount should be subject to some empirical scrutiny in order to ascertain whether it is achieving its original objectives.