Forum Replies Created
- I take issue with the absence of impartiality and ongoing posting of negative articles and commentary in an attempt to achieve your desired goals
These articles can only be seen as “negative” if its in your interest to see the house prices continue to rise. From a first home owner’s perspective lower house prices can only be a postive thing.
I’m actually inclined towards dmichies opinionsSeems like more and more people are agreeing with me [biggrin]
US: top rate of 35% starting at $315KI need to jump in here and explain how useless this statistic is, as it is often quoted. Fact is US pays FAR more tax than Australia. California holds closer to 1/4 than 1/5 of the US population and has state tax capping at over 10%. NY is > 7% above 100k.
Good point and absolutely correct. The 35% top rate is a federal tax. If you live in a low tax state (like Texas) this might be all you pay, but in NY and CA there are so many state and local taxes you end up paying a lot more. Thank God Australian states can’t impose income tax!
Mortgage Adviser, I apologise again for posting an informative link, but there is a very good comparision of tax systems in different countries here:
http://www.house.gov/jec/tax/04-20-04.pdfNote the “Forbes Index” for each country, which is the amount of tax a single person on 100,000 Euros would pay:
Japan…….24.90%
USA………28.93%
UK……….33.03%
Spain…….36.67%
Canada……38.07%
France……40.75%
Australia…41.57%
Italy…….41.95%
Germany…..50.47%dmichie, did you get sick of using your normal username?
ssab has an amazing writing style comparable to yours.Not me. Promise.
Excellent post, dunno how I missed this gem.
Big surprises (3 sigma events) occur with surprising regularlity – my guess every 5 years. So last one was sept 11, before than asian market meltdown/LTCm, and before that interest rates in the early 90’s in double digits.Some nice charts of a 3 sigma event in the UK real estate market here:
https://www.gmo.com/NR/rdonlyres/E5E95346-EA7F-4583-9A8B-9939A9789615/460/JGLetter_1Q05_ALL.pdf(Mortgage Adviser: my apologies in advance for posting this link yet again)
I’m interested in others views ie what percent chance do you think there is of standard domestic Australian mortgage interest rates exceeding 9%pa?Bugger all. The consensus seems to be that the budget is mildly expansionary but nothing like what would be needed to push bank rates to 9%.
Mind you, there are other (non-budget) things that could push up inflation and cause the RBA to act. e.g. a large depreciation in the Australian dollar.
I don’t follow any of your links any more. They are always the same negative trash. I am sure I do disagree with it though.Hmmm … who is it who has the closed mind again?
Do you have any criticisms of the budget, or is it all good?
This is interesting tid bit about where all the money is coming from:
A large part of the source of all this Howard happiness is the tax reform of 1999-2000 – not the GST but the pay-as-you-go system for businesses, and the way it links to the GST to make avoidance very difficult. No matter what you might hear about tax avoidance being rampant among rich people, the new tax system is actually hoovering money out of business tills more efficiently than anywhere in the world.Total government receipts were $156.6 billion in 2000-01, and they are budgeted to be $214.2 million in 2005-06 – a 36 per cent increase in five years. Over the same period the increase in the consumer price index has been less than 15 per cent.
That $57.8 billion per annum increase in revenue, net of tax cuts along the way, has been nearly all spent by John Howard.
I am very impressed with the Budget.It wasn’t a bad effort, but the Libs have a once in a generation opportunity to actually fix a few things, now that they have control of the Senate and big pile of cash.
I hate to quote (because I know how it annoys you so) but this about sums it up:
It would have done us more good had we seen fundamental tax reform that lowered the top tax rate and paid for it by cutting out loopholes, so more energy goes into productive work and less into working out how to rort the tax system.At some point, a future Treasurer will have to tackle this. We now have a tax system that creates instability by requiring taxpayers to subsidise the losses of negatively geared speculators, while successful speculators pay only half the tax on their winnings that everyone else pays on their earnings from work. This has already profoundly changed Australia for the worse, and next time the boom-bust cycle it invites could end in recession. Anyone who thinks these tax breaks are better than lower tax rates
needs their economic head read.Doubtless you will disagree with everything Colebatch has to say.
If I was a “Yank”, would that be a problem for you?Not at all.
Lets change the subject, maybe we can find something we agree on? What did you think of Cossie’s last budget? A big tick for abolishing the 12.5% super surcharge, but I wish he’d lowered the top marginal rate instead of moving the bracket up to $95K (2005) and $125K (2006)
Compare our top rate (48.5%) with that in the UK, US and NZ:
UK: top rate of 40% starting at $84K
US: top rate of 35% starting at $315K
NZ: top rate of 39% starting at (a very low) $56KI was trying to convey that regardless of all the doom and gloom stories everywhere (especially here from dmichie), some good stories can come out. When I am driving and come to road blocks, I look for detours. I guess that most ‘positive’ people (and I don’t mean people who are bullish) would be also looking for the detour amongst all the road blocks. If they cannot find a detour, they will find another way – eg: cross-country or walkingDear oh dear Robert, methinks you’ve read one too many self-help books. I bet you have ‘challenges’ rather than ‘problems’ don’t you?
You don’t need to walk around with a fixed grin on your face to achieve something in life. A good dose of skepticism and cynicism will get you further. All this positivity is leading me to think you’re an expat Yank. True?
First, let me say that I love that you just keep this going and going. You keep bumping the ‘doom and gloom’ threads up to the top of the list and people keep reading them. Great!
dmichie, the reason I take issue with your comments is because they are not impartialSure I’d like to pay less for my next house but that’s about the extent of my impartiality. Certainly my livelihood doesn’t depend on the real estate industry continuing to prosper.
I neither believe any bubble will burst nor do I believe things will boomEntirely possible, and the RBA is crossing fingers and toes this is what will happen.
I am just hoping the North Shore property prices boom out of control and the Aus dollar increases rapidly to prove me wrong though.Dunno why you keep talking about the north shore, but anyway, if the AUD appreciates much further the Australian economy will be in some serious s***. You, me, everybody.
What do you think that little thing called the Free Trade Agreement is all about.Don’t get me started on the FTA … trust me, it will never end.
I never said anything like high house prices are a good thing.I assumed you thought I was being “negative” because I was happy about house prices falling. Surely that must mean your idea of “positive” is that house prices continue to climb. If not, please define what “negative” and “positive” mean, and I will try not to offend your sensibilities.
Publishers love people like you as the negative headlines and articles work so well on you. You will never see the happy stories in the media at great levels because they just don’t sell papers and magazines.Perhaps I should pick up a Tony Robbins video, that should sort me out [biggrin]
I will never respect any of your comments until they are your own.Sorry no can do. I will continue to provide supporting evidence for my views.
Any moron could have seen that none of the dot com stocks that collapsed were viable investments. They had disgusting PE Ratios…The PE for property (i.e. rental yields) are almost as bad.
Please give us all a break from this crapWell, I think the forum would be poorer for it. 100% bullish or 100% bearish forums are always a bit dull — everyone agreeing with each other — its much more fun if there are opposing views.
If the economy goes bad these same poor FHBs are going to be on the wrong end of the stick againI agree entirely. The ideal scenario would be a fall in house prices with no recession. Unfortunately I can’t see it happening because so much of recent economic growth has come from the housing industry. We really should be aiming to create a more broad-based economy. i.e. do more than build houses for each other, and dig stuff up and sell it to the Chinese.
To be as negative as you is just ludicrous!Yet again you fail to understand that a fall in house prices is a positive thing for many Australians. It allows struggling FHBs into the market, and makes it much more affordable for existing home owners to trade up. Where on earth do you get this idea that ludicrously high house prices is a good thing?
Why don’t you differentiate between unit prices and house prices when quoting figures instead of using such generic figures?Because the Courier Mail article focused on houses (as opposed to units) and the JP Morgan article didn’t mention units at all.
You want me to talk about units I will, but you might regret it.
If you purchase a $500,000 house in a year that there is a 30% growth rate, and the next year there is ‘only’ 15% growth, then your house will potentially be worth $575,000 despite a DECREASE in the growth rate. Headlines will scream “Property growth down” while your house value is still going up!Actually none of these ‘gloom and doom’ stories claim that its just growth rates that have fallen (or will fall). They are saying that the actual dollar value of houses has fallen (in Brisbane) and will fall nationwide (JP Morgan). The loss in real terms is even worse, because your house needs to increase in value by 2%-3% per year just to maintain its value.
I’m not saying all properties will fall by the same amount, some will do better than others, but to suggest that property prices cannot fall, and have never fallen, is fanciful.
Bugger, he’s just shifted the tax brackets again instead of lowering the top rate (as was rumoured). Oh well, this loose fiscal policy should pump plenty of money into the economy and guarantee another interest rate rise later this year.
dmichie, you will never see the bigger picture with your close minded views.Hey, just because I haven’t swallowed the Anthony Robbins happy pill doesn’t mean I have close minded views. My views are different to yours, the world would be a very dull place if we all had the same opinions.
Non-deductibility of investment properties creates no demand for multiple property purchases.I think you’ll find multiple property ownership is taking off in the US right now.
What happens when you have a huge chunk of the population without a means to support themselves because there was no incentive to do so through their life???The US tax system has other incentives. For example, no tax on superannuation (or 401K as they call it over there). Until recently, the average America saw the stockmarket as the key to long-term prosperity rather than real-estate.
There’s a very good comparision of tax systems around the world here. Open your mind, its a good read:
http://www.house.gov/jec/tax/04-20-04.pdfBack in an hour, I have to watch the big Coz, hopefully he’ll give us all a tax cut.
They are mainly negative.They don’t call it the dismal science for nothing. Economists have predicted 14 of the last 3 recessions [biggrin]
When are they ever right.Robert Shiller, Professor of Economics at Yale University, famously predicted the tech wreck in his book “Irrational Exuberance”. He’s just released a new edition of his book predicting the bursting of the housing bubble in Australia, the UK and the US.
http://money.cnn.com/2005/01/13/real_estate/realestate_shiller1_0502/dmichie, I certainly do NOT agree with that statement!!!Surprise! surprise! but it seems AUSPROP and ANUBIS do.
Why should company tax be the same as personal tax?Because it encourages high company owners to warehouse profits in the company rather than paying themselves. i.e. Accountants are employed to make personal income appear as company income because there is a huge (18.5%) tax incentive to do so.
Probably the best piece on this issue was written by Alan Kohler just after last years budget:
http://smh.com.au/articles/2004/05/14/1084289886748.htmlAll high income earners understand that the gap between the top income tax rate (48.5 per cent) and the company tax rate (30 per cent) and the effective capital gains tax rate (24) is now such that they spend much of their lives trying to shift income into the lower brackets through contracting, leaving money in corporate structures and/or running fiddles to get it out as something other than income, and risky investment negative gearing, especially on property (a big part of the reason for the recent property boom).I think you’ll find every business and taxation lobby group in the country would be in favour of aligning corporate and personal tax rates.
Abolishing negative gearing is like abolishing deductibility of business expenses.
Your theory would cripple the country.Funny, every other OECD country seems to survive quite happily without negative gearing. In the US interest on owner-occupied home loans is tax deductible, but not investment loans, a far more sensible arrangement in IMO.
I am confused with the last 4 posts, what r u guys focused on, can u give us a solution in stead of a problemI think what we’re attempting to do is fix the Australian tax system. There’s a surprising consensus between the bulls and bears — we all agree that company, capital gains and personal income tax should be around 30%, and that rorts and loopholes like negative gearing should be abolished.
