Can you think of a worse tax than this?
Look, nobody likes taxes—but let’s be honest: while all taxes have downsides, they’re not all created equal. Some are more tolerable because they’re predictable, proportionate, or at least tied to actual income or profit. But then there are taxes like the Victorian Windfall Gains Tax, which, frankly, represent a complete breakdown in fair policy and rational thinking. This is not just a bad tax—this is, in many respects, one of the worst taxes ever conceived.
Why? Because it’s fundamentally unjust at its core. It punishes landowners not for making a profit, not for developing property, and not for earning income, but simply for existing in the right place at the right time when the government changes a zoning rule. That’s it. You didn’t build anything. You didn’t sell anything. You didn’t earn anything. But suddenly, the government steps in and declares that your land is now worth more on paper—and then, unbelievably, turns around and sends you a massive tax bill for this so-called “windfall.”
In some extreme cases, the amount owed under this tax can exceed the actual increase in value, effectively taxing people at over 100%. Think about that for a second: you’re being taxed more than the amount you supposedly “gained.” That’s not just absurd—it’s confiscatory. It’s the kind of thing that, in any other context, would be considered legalised theft. If a private citizen tried to do this to someone, it would be fraud. But because it’s the government, it’s somehow allowed?
And what makes it all even more outrageous is the reasoning behind the tax. You’re not being taxed because the government invested in infrastructure or improved public services that genuinely increased your property’s value. No, you’re being taxed because the government stopped actively suppressing the value of your land. They removed a planning restriction, or rezoned a block, or lifted a bureaucratic obstacle that they themselves had previously put in place. That’s it. Your property was artificially devalued by government fiat, and now that they’ve simply undone their own interference, they want to charge you as though they did you a massive favour.
It’s a bizarre and backwards logic. Imagine someone holding your head underwater, and when they finally let go and you come up gasping for air, they hand you a bill for the “privilege” of breathing again. That’s the Windfall Gains Tax in a nutshell.
This kind of policy doesn’t just punish landowners. It creates huge disincentives for investment, development, and long-term planning. It adds unpredictable risk to an already complex property market. And it sends a chilling message: any increase in value—even a paper one, even one caused by government red tape being removed—can and will be taxed into oblivion.
So, can I think of a worse tax than this? Honestly, it’s hard to imagine. It violates basic principles of fairness, discourages productivity, and punishes people for circumstances entirely outside their control. It’s not just bad—it’s destructive.
