Is Private Sector Unemployment 30% ?, page-6

@Gillisrooms

First, the issue changes tone when government is seen in its entirety. When you do that what you immediately notice is a proposal for a progressive tax called capital gains to be replaced by a regressive tax called stamp duty.

Second, what you are implying is that at least in the short term the supply of property is going to increase, or in economist parlance that the supply curve is going to shift to the right.

As depicted in the figure above a shift of the supply curve to the right will move the equilibrium price from p to p' , that is, it will come with a reduction in price. With the incentive to sale real estate property substantially increased , more properties would be coming into the market lowering the price at which the property market clears. And lower the price lower the revenue from stamp duty would be.

If you look again to the above figure you will notice that the quantity would also be expected to move from q to q' neatly offsetting the fall in price with a proportional increase in the quantity of properties being transacted, leaving the total revenue from stamp duty unchanged.

The question now is: What would happen to the total revenue considering the government as a whole? It would have fallen by the amount forfeited through the reduction of the capital gains tax rate to 0 (zero).

And, I presume that those having invested in property would not be very happy to see the value of their investments going down.

Note. In the above figure the demand and supply curves are represented by straight lines with 45 degree slopes. The actual curves may be different, in which case a slight different outcome may be achieved. Nevertheless the simplified scheme helps to clarify, I hope, the type of issues involved.

Another matter.

There is a relatively large pool of people that unfortunately for a variety of reasons are unemployable and in my opinion they should be object of some type of dispensation when it comes to the obligation of having to be actively looking for work in order to receive unemployment benefits. The problem is that there is also a relatively large number of voters, most of them liberal voters, that think otherwise.