Absolutely, but the coalition has attacked labour so often and so effectively over the issue that any good faith debate on the issue is impossible.
jonsonton on
NG is a result of the ATO’s simplistic methods of calculating income for tax purposes.
If you banned people from claiming investment expenses against income on their personal tax returns, they’d just set up companies to own the properties and do the same thing. At the same time, you shouldn’t be able to offset property losses against your total income. There’s a middle ground here.
Income and deductions should be silo’d into broad categories. PAYG/Salary, Land (Direct Property Holding including Rent), Crypto and Other Invesmtents (Dividends, Interest Payments etc). These categories will include their respective capital gains/losses if applicable.
If your net position in any of these categories is negative, you can roll that forward into future tax returns (like you can currently with capital losses) against future income in that category, but when combining these sources to find your “combined taxable income”, none can be below $0.
example: Salary: $70k, Land: $30k rent and $40k expenses, Crypto: $20k capital loss, Other Investments: $20k dividends and $2k bank interest. Under the current system your taxable income would be $70k – $10k – $20k + $22k = $62k. Under a silo system, your taxable income would be $92k, with $10k in property lossesand $20k in crpyot losses able to be rolled forward into future years. The key difference here is that whilst future income can be offset, investments are speculative and there is no guarantee that will be the case like it is for earning a salary (for the most part).
As for CG discount, don’t scrap it, just ammend it to the old system of inflation adjustment (ie a 10% gain with 3% inflation gets taxed on 7% gain). Taxing inflation is not good governance.
2 Comments
Absolutely, but the coalition has attacked labour so often and so effectively over the issue that any good faith debate on the issue is impossible.
NG is a result of the ATO’s simplistic methods of calculating income for tax purposes.
If you banned people from claiming investment expenses against income on their personal tax returns, they’d just set up companies to own the properties and do the same thing. At the same time, you shouldn’t be able to offset property losses against your total income. There’s a middle ground here.
Income and deductions should be silo’d into broad categories. PAYG/Salary, Land (Direct Property Holding including Rent), Crypto and Other Invesmtents (Dividends, Interest Payments etc). These categories will include their respective capital gains/losses if applicable.
If your net position in any of these categories is negative, you can roll that forward into future tax returns (like you can currently with capital losses) against future income in that category, but when combining these sources to find your “combined taxable income”, none can be below $0.
example: Salary: $70k, Land: $30k rent and $40k expenses, Crypto: $20k capital loss, Other Investments: $20k dividends and $2k bank interest. Under the current system your taxable income would be $70k – $10k – $20k + $22k = $62k. Under a silo system, your taxable income would be $92k, with $10k in property lossesand $20k in crpyot losses able to be rolled forward into future years. The key difference here is that whilst future income can be offset, investments are speculative and there is no guarantee that will be the case like it is for earning a salary (for the most part).
As for CG discount, don’t scrap it, just ammend it to the old system of inflation adjustment (ie a 10% gain with 3% inflation gets taxed on 7% gain). Taxing inflation is not good governance.