What does that say about a tax system where you need a highly paid accountant and lawyer to reduce your tax burden?
The australian tax act is a disgrace and the ATO is an unaccountable monster of a bureaucracy which has no interest in actual justice and enacts a terrible burden on all citizens of this country. In my opinion the whole thing should be burnt and a one page replacement put in its place.
The examples given by the Age are true. And they are legal. The principles of loss transfer are equitable and fair and are used by every middle class taxpayer who claims negative gearing as a deduction. If you want to stop the rot, there is a lot of real politics to be confronted. Tax losses arise because an asset was unproductive in the past. If you want to discourage this kind of tax avoidance, you have to agree to disallow losses to be carried forward which is going to hurt a lot of people owning property in this country. Good luck with that one. I do not condemn the rich man using what tools he has to minimise his tax burder, I condemn the idiot politicians and bureaucrats for creating a system where he is able to do so.
Deductions are the real fly in the ointment. And the reason they are such a plague is because income tax rates are too high. When you are taxed at 43%+medicare on income you earn through the sweat of your back, it is fair according to the idiots we have creating the legislation today. And yet money earned through sitting on an asset and taking a financial risk is taxed at half the rate, and apparently thats fair too.
The tax act needs to be ripped up - its obviously not doing its job. I would prefer to see a million accountants and lawyers out of jobs than manufacturing workers which is what we have achieved as a nation in the last ten years.
The only way to tax people is through consumption taxes at a flat rate. Yes its annoying to see some people richer than everyone else. But you will at least know that they are not getting away with it. Asians understand this and they dont seem to have trouble balancing budgets.
Australia needs desperately to get off the welfare teat and back to work. But in an economy where the tax system penalises labor, why bother?
