Yet we should still encourage share investors to take out margin loans and claim the interest involved in pumping up the share market? Which after all is the cause of most economic crashes...
Very, very rarely would the dividends from shares invested with Margin loan money cover the interest paid therefore resulting in negative gearing and the investor relying on capital growth to make a profit. Gees that sounds familiar.....
If you take it away from one investment, the money will find it's way somewhere else and then everyone will be moaning about the recession that was caused by injecting too much speculative money into the share market.
At the end of the day the high end of town will always find ways to make money and reduce tax. But IMO the reality is that a lot of middle Australia use investment properties as a way to save for their retirement because they have been burnt too many times by the share market. Take this away and all you do is move the extra tax you have collected into pension payments. All political discussions in this country are so short sighted.
Disclaimer. I invest in both property and shares and have claimed deductions on both margin loans and mortgages.
