I think part of that was they went to the election saying they wouldn’t and then did. I’m in favour of the changes even though I’ve been affected more than most. But it annoyed me that they backflipped on it.
Do you think there was any alternative given the radical change in the global economic situation between six months before the election, with a global tenancy towards near zero interest rates and our government being able to reasonably expect to service debt with minimal cost, versus the situation since the moment Putin pulled the trigger until now?
You’re not being taxed, your kids are.
Also, “money should only be taxed once” just isn’t a principle that applies in our tax system. Every time you pay GST, fuel excise, stamp duty etc. you’re taxed twice on the same money. Taxes are simply there to incentivise certain economic activities and fund govt services. Inheritance tax is there to disincentivise hoarding generational wealth, or rather reduce its impact on those not lucky enough to have it.
I think prior to the election they wanted to the changes, they were just too jellyback to go to the election with it.
Transfers always trigger CGT and stamp duty.
Why should it be different just because you’re dead?
The reason is that while the changes were going to effect so few people the myth that; “Hey, you too can make money from investing in property” is so strong that people who have close to no chance to actual take advantage of the tax breaks think it’s wrong to get rid of them.
It was the same with the franking tax changes that Labor wanted to bring in.
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Sorry - farmers have historically been pretty(too?) influential in CGT policy decision making. They have all sorts of fun exemptions on the basis that they’re apparently asset rich, but cash poor.
If you started taxing them on their gains on a regular basis, rather than at disposal, they would be apoplectic.
In fairness it’s a moot point as we don’t have inheritance tax here, only CGT for properties etc. But my point still stands, if I have $1,000,000 in my account that I want to give to my kids, I’ve already paid a shit tonne of tax on it. My kids will receive the money and then spend it, most likely on a house or something else, which they’ll then get taxed on. Why should the process of transferring that money, when i’m dead, be subject to further taxation. The money is earnt legally through hard work. Why should the government take another chunk out of it?
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“I paid tax when I acquired this property, so I don’t have to pay any other tax in relation to that property” isn’t a thing.
Yeah, I already answered that so we’re in agree to disagree territory.
Perhaps another way to look at this is that most taxes are levied on the movement of money through the economy, rather than on the money itself.
I earn $13 and I pay tax on that.
I then give that $13 to Hemmes for a stadium beer, and he pays tax on whatever component of that represents his profit.
It’s not so much the actual $13 that has been taxed and therefore can’t be taxed again.
It’s the movement of that money to me that gets taxed, and then the subsequent movement to Justin Fuckwad that gets taxed again and so on.
Transfers between people aren’t really any different, are they?
bUt I pAiD tAx AlReAdY!!!
There’s a couple of things here:
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should economic activity be taxed to pay for government services? In some countries the answer is far more of a no than in Australia, the idea being that will attract global investment that stimulates the economy in other ways, and the government needs to find some other way to pay for key services or simply not provide them. I think Australians generally would like a country that provides good services through taxation.
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should our taxes be flat and further reinforce pre-existing intergenerational inequality, or should they be progressive and redistribute wealth away from the successful to pay for services that benefit everyone equally? That’s different to the above and it has a moral dimension. My answer is yes, and I think most Australians still agree (although less than used to). Under that logic, it’s “fair” to tax certain things harder than others - intergenerational wealth transfer being #1.
The entire economic system
If only destroying capitalism was so easy.
Don’t threaten me with a good time, that’s all I’m saying.
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A developer no less. My heart bleeds for them
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NACC being investigated over not chasing up Robodebt. Time to get the popcorn.
Albo: “The issue with negative gearing is one of supply,” he told the ABC’s News Breakfast on Thursday. “Will it add to supply or will it decrease supply? The figures and research that has been produced by organisations like the Property Council indicate that it would reduce supply and therefore not contribute to solving the issue.”
See this is the bit I don’t get. (And not referring to the choice of quoting the property council). And yes I am too lazy to read their research.
Surely the people building high density living are not individuals with negative gearing and CGT exemption, they are businesses and would be unaffected? So mass supply increases continue.
So those affected are buying individual properties. These properties would instead be bought by occupiers with less competition at a lower price, whilst also taking renters out of that market and not affecting rents.
It does not affect supply or housing stock. It just shifts the market from investors to owner occupiers, and renters to owner occupiers. And investors can go and put their money into productive investments. Why are my tax dollars subsidising your safe investment?
Apart from self interest, there is no reason it’s a bad policy. And the reason it is treated differently to other investments is it is a human right. I am yet to hear an actual sound argument against abolishing these concessions.
I can only assume that “it will decrease supply” means “it will decrease demand” (from investors), which would then, through normal market forces, indirectly decrease supply (developers have a harder time selling, so they produce fewer in response).
But is the property market even that efficient, that developers would slow if didn’t think the same level of investor demand was there? Or would they just take a haircut on their profit margins?
It’s a weird argument, I do agree.
No, they wouldn’t, they’d go tell the Prime Minister that they won’t contribute to his re-election campaign unless he does an about face quick smart and repeats their talking points to the media.
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But that lowers prices, increasing the number of people that can afford to buy. It just alters the set point and the target market. You could make an argument the government does need to intervene to create new stock, either by subsidies to developers or doing it directly themselves.
It has no bearing on existing stock which make up the majority of the market.