- 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.
dmichie, you will never see the bigger picture with your close minded views.
Here is something for you to think about regarding deductibility of PPOR in the US….
Non-deductibility of investment properties creates no demand for multiple property purchases. A small percentage of the population invests in other medium to long-term investments. The US will face the same baby boomers problem as we face.
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???
Robert Bou-Hamdan
Mortgage Adviserdmichie, 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.
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.
Yes, the pressure to keep IRs low (in support of domestic consumption) has all but evaporated. Possibly a couple of rate hikes to come this year? Now as for opportunities, if we can predict where the multi-billion dollar future fund is headed and get in early there should be some easy money to be made.
It will be interesting to see how the sharemarket reacts tomorrow. Retail should do well I guess.
Cheers, F.[cowboy2]
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