Warnings that startup founders will flee Australia to avoid paying a higher capital gains tax are unfounded, a Senate inquiry has been told.
Under changes proposed by the federal government, the capital gains tax discount of 50 per cent will be replaced with an inflation-indexed model and a 30 per cent minimum rate.
That means the maximum marginal tax rate for startup founders, who often have a negligible initial capital base, will double to near 47 per cent.
Business groups and entrepreneurs have warned that would force founders overseas to countries where the capital gains tax is lower or even zero, such as New Zealand or the UAE.
But that's easier said than done, Miranda Stewart, a tax professor at the University of Melbourne, told a Senate inquiry into the changes on Tuesday.
