I argue that Bill Shorten and his merry ALP who wish to tamper with the "negative gearing" issue are wrong to do so and will only serve to hit state revenues.
Taxation does not subsidise any speculation. Speculation is caused by shortages of housing, shops, factories & office blocks in areas of high demand .
Taxation subsidises the total income of the poor and the more speculation the more revenue the states will collect in purchase stamp duties. Every property purchased of a million earns the state govt $60,000 in Victoria plus GST on renovation expenses. So states want more speculation to continue but if you discourage speculation then the states generate less taxes. Commercial.purchases attract GST too.
State always win revenue from speculation even if speculators don't always end up with a taxable profit and don't pay ATO taxes. The states ALWAYS win. The federal government ends up getting more taxes from.interest received by both depositors and bank corporate taxes.
When the speculation results in more apartments in high demand areas, then the prices of apartments drops as we will see over next 5 years.
So I argue speculation is good and does not increase prices except temporarily until the demand is satisfied by increased supply. The states are always benefiting by speculation even if the ATO are not.
Low income earners are not earners, they are sponging totally of the toil of others who pay taxes which totally subsidises the no income earners who then receive total.income support. The suggestion that the poor are getting poorer and missing out on economic growth is a stupid notion because all their income comes from taxation.
Get rid of the negative gearing for individuals will give foreigners and corporations an extra benefit intially but reduce the number of reasons for individual buyers to speculate and therefore reduce State revenues and consequentially the income at the federal level.
