Explain this guys...

"House prices cannot rise faster than incomes indefinitely, but that is what they’ve been doing since the capital gains tax levied on the sale of investment properties was halved in 1999.

As economist Callam Pickering has described, that change, combined with long-standing negative gearing laws, began the long run-up in house prices relative to incomes.

Even Mr Turnbull complained in 2005 that our tax system “turns income into capital and, as in the case of negative gearing, allows them to deduct income losses at, say, 48.5 per cent, and then realise gains and pay tax at effectively half that rate”"

"Turning houses into tax minimisation vehicles has distorted prices by creating what some economists call ‘over-demand’ – demand that is no longer related to the utility of living in the dwelling, or even the amount of money the asset can return on the rental market.

And all the while, the finance and real estate industries have beaten the ‘housing shortage’ drum to stop anybody noticing where the real problem lay – in the tax system.

One striking statistic bears this out – the average number of people living in each dwelling.

While house prices climbed steeply from the early 2000s, the number of people per dwelling actually fell.

The chart below covers the NSW market, where prices have risen most in the past 20 years – and even there the number of people per dwelling fell. The same trend is evident across the nation.

The number of bedrooms per dwelling might have increased, but not the number of people."

"It is pointless, and wrong, to criticise people for acting within the law to minimise their tax bills.

However, the material reality that Mr Turnbull’s textbook logic fails to acknowledge is what negative gearing and the capital gains discount have delivered – a housing sector bloated with debt, which imposes huge financial and social strains on younger Australians."

http://thenewdaily.com.au/money/2016/04/28/textbook-turnbulls-housing-logic-wrong/

The same tax system has not seen the share-market do what property has done.

Explain why that is, Poirot? Perhaps the flight to property as a safe haven has something to do with it, or supply and demand, but don't believe every conclusion you read.

Here's my advice to both parties.

1) Bring back full CGT at the marginal tax rate with full indexation for inflation of the cost base.

2) Allow operating losses to be carried forward and written off against capital gain if still in debit at time of sale. Any residual loss thereafter would be carried forward by the taxpayer to apply to any new venture/s.

Bear in mind that investment via a company allows operating losses to be carried forward, so my proposal simply allows individuals to do what companies do. Companies pay no tax when they make a loss.

NG for an individual taxpayer simply allows them to invest without a company structure, with the same ultimate outcome the same as if as if they'd incorporated, both to themselves and the tax man. This underlies Turnbull's "that's beside the point" comment in the interview with Leigh Sales, I believe, not a "let them eat cake" attitude.

Labor's policy is class warfare, and it's palpable.

PS, I'm talking about applying these principles to all asset classes, not just housing.

PSS. Incorporated into my proposal above could be a limited operating loss for the individual taxpayer that can be written against normal income in any financial year, i.e. a cap on NG, with any residual loss carried forward.

A lesson in Taxation 101 must be spelled out by Turnbull, along the lines I have done above, so people know what they're voting for. His effort with Leigh Sales was not his best.

It is obvious that Labor's policy is either very ill-considered, or, callously designed to divide Australia for political advantage. Reading the comments on the Poirot's Guardian link demonstrates the palpable hatred out against anyone providing rental housing.

"...His effort with Leigh Sales was not his best."

That's the understatement of the year.

He was pathetic.

But, it's par for the course - can you direct me to an interview where he hasn't waffled and dithered vacuously since he became PM?

Address the points, Poirot, or are you just in this to kick up dust like the Labor Party?

NG is a pathway for the mum's and dads to have a flutter without forming a company structure, and it's how I got ahead early on. I'm positively geared now but NG helped me gear myself into investment for an independent retirement.

Why take it away? The wealthy will form company and trust structures which achieve the same ends if NG disappears, as I've outlined above.

Individuals must be free to aspire and strive. What do you want, taxation on gains but no allowance for write-off of losses? You live in a capitalist society with a far better life than you could enjoy in a communist state.

Instead of beating the class drum, and claiming rorts and so on, have a think and see some sense in what I'm telling you, or is that not the aim?

Written quickly and last post for 24 hrs.