The myths surrounding superannuation tax concessions, negative gearing and capital gains tax may be exaggerated, but that doesn't mean they shouldn't be reformed.
That's the view of consultants Deloitte in the second of the 'Mythbusting tax reform' series.
"These three issues are all shrouded in myths, so we've attempted to shed some light," Deloitte Australia head Cindy Hook says in the report released on Monday.
It comes as the new Turnbull-led government says "everything is on the table" under its tax reform white paper.
The report says while super tax concessions costs are "huge", they do not cost more than the aged pension as some critics paint them.
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But Deloitte also disagrees with the myth that the rules around super can't be changed because the system needs stability to win back trust.
"If our super concessions costs lots but achieve relatively little, then Australians are spending a fortune on 'stability and trust' in super settings while actually achieving neither,' Deloitte says.
Improving the system would provide a reform dividend of around $6 billion in 2016/17 alone, it says.
Likewise, negative gearing is not a "evil tax loophole" but Deloitte concedes it is over-used because of low interest rates, easy access to credit and heated property markets.
It simply allows taxpayers to claim a cost of earning their income, a feature of most tax systems around the world.
Deloitte also says it is interest rates that drive the fate of house prices and not negative gearing, meaning that the impact of its removal would not send rents soaring.
Finally, Deloitte does not believe the current discount on capital gains is an appropriate reward to savers as its supporters suggest.
It says the discounts Australia adopted back in 1999 assumed inflation would be higher than it has been, meaning that the 50 per cent capital gains discount is too generous.
"That not only comes at a cost to taxpayers, but to the economy as well," it said, recommending a lower discount of 33.33 per cent.
