If applied more broadly, it could at last tax rich Australians in something like the same way the rest of us.

High-wealth Australians are taxed differently from other Australians because they earn much of their money in a different way.

Most of us get taxed at standard rates on the only income we have, which is income from working, and interest on savings in bank accounts.

High-wealth Australians make a lot of their money in other ways, from investments in shares and properties. And while the dividends from shares and the rental income from properties are taxed at standard rates, what happens to profits made by selling those shares and properties is anything but standard.

The profits made from buying and selling shares and properties are called capital gains. Until 1985, most of them were untaxed.

Sure, a section of the Tax Act said if you made a profit selling an asset after less than a year you would pay tax, but you could avoid that by waiting for more than a year. It also said if you sold something for the purpose of making a profit you could be taxed, but you could avoid that by saying profit wasn't your purpose.

The capital gains tax, introduced in 1985, changed that. Income from the profits made from buying and selling shares and properties was taxed as income - but with two exceptions. One is that less of the income would be taxed than for other types of income. At the moment only half of each capital gain is taxed.

(During its unsuccessful 2016 and 2019 election campaigns Labor promised to halve the discount, meaning 75 per cent of each gain would be taxed.)

The other exception, the one Chalmers is breaking ground by winding back when it is used by super funds, is that the tax is only due when the asset is sold.

This is quite different to the way tax is charged on interest earned in bank accounts. We pay as the interest accumulates, not years or even decades later when the money is withdrawn.

The 2010 Henry Tax Review saw this special treatment as a problem.

The review said collecting tax only on "realisation" (when assets were sold) rather than "accrual" (as they grew in value) encouraged investors to hold on to shares and property in order to delay paying tax, a response it called "lock-in".

All the better for the investors if, when they eventually sold, they had retired and were on a much lower tax rate, meaning they would scarcely pay any tax on decades worth of gains.

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During financial crises when prices fell, the rules encouraged investors to do the reverse - to sell quickly to realise tax losses, destabilising markets.

Henry would have preferred tax to be collected as the gains accrued, but said back then said that wasn't practical.

While improvements in technology might improve things, back in 2010 it was hard to get a good read on changes in the value of buildings or rental properties until they were sold.

Not now. Firms such as CoreLogic revalue property daily, and not just in the general sense. If you want to know what has happened to the value of a three-bedroom home with two bathrooms on a particular size block of land in a particular street, CoreLogic can tell you.

And real-time values are being used for all sorts of purposes. Pensioners owning rental properties get their value updated annually for the pension assets test. Services Australia doesn't wait until they are sold to declare they are worth more.

It is the same with council rates. Property values are updated annually rather than down the track when they change hands. There's no longer a practical impediment to doing this, and there's never been a practical impediment to valuing shares. They are valued daily on the stock exchange.

It's the simple approach Chalmers has taken to valuing super fund income for the purpose of imposing the 15 per cent surcharge on high balances announced a fortnight back.

Rather than taxing capital gains only when assets are sold (as will still happen for the bulk of what's in super accounts) the surcharge will be calculated by applying a 15 per cent tax rate to the increase in the value of the relevant part of each fund. Super funds are already valued quarterly.

Chalmers isn't talking about doing it more broadly. But what he is doing shows it would be fairly easy. Denmark is planning to do it later this year, becoming the first country in the world to introduce what it calls the "mark to market" taxation of real estate capital gains.

It'd create difficulties that would have to be worked through, perhaps by providing loans. Some property owners wouldn't have enough ready cash to pay an annual capital gains tax, just as some don't have enough ready cash to pay rates.

But it would have benefits. It would make investment properties less attractive, putting downward pressure on prices and making it easier for homeowners to buy. And it would make the tax system fairer by preventing wealthy Australians from postponing tax until their tax rate was low, raising much-needed money.

It's not going to happen in a hurry, but by moving in that direction, Chalmers has brought the proper taxation of capital gains a little closer.