What will the proposed tax summit mean

There is concern that the tax summit proposed for early next year will result in some painful tax changes.

While a legitimate worry, especially given the pressure that is likely to be placed on the minority Gillard government by the Greens, we can take some comfort from the government's response to the Henry tax review.

In particular, many of its more controversial recommendations were rejected, with the government adding that they would not be implemented at any stage.

Among those rejected were proposals to impose land tax on the family home, reduce the 50% discount when calculating capital gains tax, remove the benefits of dividend imputation, and introduce death duties.

Significantly, when announcing its response the government restated its commitment not to increase the rate of the Goods and Services Tax (GST), currently 10 percent.

It also reaffirmed its commitment to retain the tax-free status of superannuation income streams paid to those 60 and over.

There are proposals to introduce a new top marginal tax rate to 51.5 percent, abolish negative gearing, increase the company tax rate to 33 percent, abolish the 50% discount on capital gains tax and introduce estate (or death) duties.

But while the Greens will control the Senate from next July, it is unlikely the government will give ground on any of these issues, if only for electoral reasons.

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