A Treasury report released under Freedom of Information has found over half of all negative gearing tax benefits aid our top twenty percent of income earners and the top ten percent of income earners gain 75 percent of the capital gains tax concessions.
Despite claims by the coalition that Mums & Dads and average wage earners were the main beneficiary, the report states “Negative gearing benefits high-income families,” and the capital gains discount “overwhelmingly benefits high-income families.”
The lowest twenty percent of income earners only obtain 5 per cent of all benefits under the generous negative gearing scheme, costing the budget billions of dollars each year.
It is understood the report is written by ANU’s associate professor, Ben Phillips for Treasury, and the government had known about the contents of the report for three months, while fiercely maintaining it’s claim that negative gearing benefits average wage earners.
The report, which the coalition tried to keep secret, found Labor’s plan to quarantine negative gearing to new properties and reduce the capital gains discount from 50 per cent to 25 per cent would save the Australian taxpayer approximately $6 billion a year.
» Government hides the truth on Negative Gearing – My Sunshine Coast, 18th June 2016.
» Election 2016: Government maintains negative gearing stance despite Treasury documents – The ABC, 18th June 2016.
» Labor seizes on Treasury advice that wealthy get most from negative gearing – The Guardian, 18th June 2015.
And how is this news? The wealthy on the highest tax margins stand to recoup the most when they use NG or any other tax deduction, so it obvious their accountants would be advising them ,more so than any other group, to take advantage of it.
As Kerry Packer said to the 1991 Senate Inquiry –
‘“I don’t know anybody that doesn’t minimise their tax. I’m not evading tax in any way shape or form. Of course I’m minimising my tax. If anybody in this country doesn’t minimise their tax they want their head read. As a government I can tell you you’re not spending it that well that we should be paying extra.”’
… and in breaking news
water is wet
How is this news? Well it might be news to all of those idiots parroting the claims of the conservatives – that middle income earners benefit the most. You know those aspirationals with a… ahem… taxable income lower than 80,000.
High taxes rates were applied to the wealthy after the second world war and for quite some time (http://thedepression.org.au/still-good-profits-when-economic-rent-captured/). In Australia in 1951 the top tax rate was 75% (https://atotaxrates.info/individual-tax-rates-resident/pre-2010-tax-rates/). By all accounts this was a prosperous period.
We live in a democratic society. So when the loopholes in tax laws start to adversely affecting the majority, and they notice it, they’ll vote for a change to the status quo.
Since 2008 many of the major political parties across the globe have been experiencing a voter backlash resulting from the economic downturn. Trump and Sanders are recent examples. It won’t be any different in Oz. The Greens and Labor have spotted the opportunity early. The conservatives are looking like relics of a bygone era.
Let’s say for urguements sake the top 5% of Aussie folk benefit from this.
The other side of the problem is, given half the chance, another 75% of Aussie folk would also like to do the same.
Then you have the last 20% of folk. Some of these folk simply can’t join the fun and games. And others simply dont want to. We fall into the later group. Off grid (24 volt) No bills. Tiny house. Fruit n Vegi garden. No big toys. You can ‘opt-out’ you know!?
I wonder if the Libs will call negative gearing something ‘to aspire to’.
They just seem to be so out of touch.
The good thing is that the housing crash is well and truly working it’s magic in Perth and I will pick someone’s empty negatively geared property for a bargain.