Australia stands up for ordinary taxpayers against private equity

This, from Reuters, is to be greatly welcomed:

Australia ruled on Wednesday that gains from asset sales by private equity firms would be taxed as income.

Of course, toys will be thrown out of prams:

The Australian Tax Office's (ATO) ruling also ensures that private-equity lobbyists will head to Canberra in the new year to call on the government to legislate to overturn the ruling.

The ruling stems from a dispute over a particular sale, where private equity firm TPG was hit with a $628 million tax bill on the $1.4 billion profit it made on the sale of a department store chain.

Wednesday's ruling specifically targets private equity firms that are domiciled in international tax havens. The tax office, which is aggressive in tackling offshore tax avoidance, said it would crack down on offshore company structures it believed were being used to reduce their tax bills.

There is no reason at all why the exceedingly wealthy should be provided with special tax subsidies. They do nothing to make the world a more efficient or productive place. It would be nice to see governments around the world doing lots more of this.