Negative gearing: Everyone else pays

[AJK]

It is not logical to take away negative gearing. They tried it once before. The labor party stopped it because it was such a disaster. They stopped gearing so all the people who owned all this property which was rented out to their voters, suddenly couldnt afford to own the property any more. What did they do? Sold it. What happened to the renters? On the street. What happened to the re-election chances? Evaporated. How long did it take them to correct it? It was something like 18 months and they back dated it.

So worst scenario:

What happens if they take it out? We fix it. We cannot be afraid of what is going to happen in the future. People prevent themselves so much from doing things because of what could happen in the future. The rich folk never worry about that. The government is irrelevant. Government for example brings in GST. We'll fix it. They cant afford all the lawyers and the accountants. You have all the rich folk versus the government. The government changes something, the rich folk, their solicitors, their accountants are finding loopholes. As soon as one accoutant has found the loophole he has told somebody else. The tax office and the government cannot move fast enough to close the loopholes the rich folk are finding.

This will just also cripple the property market and the economy and most legislation is not retrospective anway. When they introdcuce new legislation, it is very hard under common law to make it retrospective and when the government have attempted to do it, it has usually been contested in the high court and frequently won. Under common law it is virutally impossible for them to introduce retrospective legislation. If they change the laws it will only be from today.

Cheers

Stay

 

[Fester]

Gee, should have looked through Jans "More Wealth From Residential Property". Page 228 reveals all.

Fester

 

[sbe]

This guy is seriously misdirected.

I was going to say something more derogotary, but I'll leave it as that.

There are so many flaws in his argument, it makes you wonder if this guy knows anything about property - He's never heard the term "bought for land value".....

Typically socialist / communist in overtones (I wasn't suprised when I found out where he works - Uni - Socialist Heaven)

As someone else said, this is definitely RDPD's poor dad. Oh those mean and nasty investors. It's their fault I can't have a bigger university budget to play with......

He also conveniently forgets that negative gearing only works if you have to pay tax, so those he complained couldn't get it, most likely dont pay tax !!! And we "subsidise" their housing to boot!

He also glosses over the fact, the like many others here, I intend to be self supported when I retire - something this guy doesn''t get !

Gotta go before I spend all day pulling apart his ill informed arguments !!

GGRRRRR!

Bye.

Simon.

 

[djsherly]

Ross Gittins shares his point of view in today's SMH, too.

Chris.

 

[natmarie73]

Totally agree. I posted a reply when this post first went up but was so mad I couldn't post it. I feel better for reading some of the replies on this thread now.

My feeling is that this particular person seems to be inciting hatred of "rich bastard" investors and blaming us as the sole reasons the battlers, widows, single parents etc are in the boat their in. Politicians have said time and time again that the massive amounts of stamp duty paid by home owners and investors pay for the hospitals, schools etc. Take away any incentives for people to purchase property and you severly curtail the budget for these essential services.

Not a single mention of the good that negative gearing brings both the economy and individuals ie lower rents and the opportunity for them to become investors as well (via neg gearing)

I'm frankly quite sick of the whole "them and us/have and have not" mentality some people have.

Nat

 

[sbe]

What's even more stupid, is that removing it will hurt even more so those they pretend to protect.

For example, without negative gearing, how many people with average incomes could afford to save the $$$ for a big deposit for a property to make it positively geared?

Certainly not the battlers. They need every dollar to survive daily.

If they're after the super rich, forget it, this wont even make them flinch.

Nope, this is going to hit Mr Average Investor, trying to get together something to support themselves, better themselves, and not be a burden on society.

No, rather than that, lets punish any effort to get ahead so that we keep everyone under the control of Government Payments. Lets make sure that anyone trying will be ashamed of themselves for "ripping off" the poor renter (who for whatever reason doesn't have a house to live in), for "ripping off" the tax public (even though the most we can ever get back is what we pay, and as soon as we make a profit, we have to pay anyway). Lets make them feel guilty about wanting anything above "normal".

I dunno - Maybe this guy was heavily into shares and just cant stand that he's lost money while we didn't.

The other commentary doesn't help things either. Mind you, who validates his research, or does it go down recorded as Correct without testing?




Simon

 

[Kevmeister]

Originally posted by sbe
...even though the most we can ever get back is what we pay, and as soon as we make a profit, we have to pay anyway

Maybe I've misunderstood this comment, but I thought the most you can get back is about 50% of what you've paid (48.5% at the highest marginal rate).

 

[Les]

G'day Kevm,

Maybe I've misunderstood this comment, but I thought the most you can get back is about 50% of what you've paid (48.5% at the highest marginal rate).

Yes, you're correct - but, what if you had paid Tax of $20k, and had claims of $50k???

In this case, using sbe's words, you could probably "get back what you pay" - and certainly no more than what you have paid !!

So, it IS possible to get back what you've paid, but NOT $ for $ of your deductions (as you pointed out).

Regards,

 

[sbe]

Sorry - wasn't very clear..

The most you can get out is the TAX you've paid.

The point I was making (very poorly mind you) is that he makes it sound like we're taking money from others - ie getting back more than we've paid in tax. In reality, the MOST we can do is pay no PAYG tax. And lets remember, that if you can do that, you most likely have your hand in your pocket pretty deeply for those properties.

Sorry for the confusion.

Simon.