Way too many loopholes in the present system which deceives the real figures. This why so many ultra high earners can go bankrupt & put employees out in the cold, leave creditors & contractors out in the cold yet they still continue to live a lifestyle on the money they owe but don't have to repay.
At the other end you have the welfare rorting. A flat tax intertwined with a transaction tax would sort many of these rorts once & for all. Ah yes & a National service to instil a more moral mentality.
Negative gearing is nothing less than welfare on a grand scale.

Indi, what he is saying is that at 20%, those in the 48 cents per dollar margin would pay far less tax than the do now. Not less tax than the lower earner.

rechtub,
I DID say 20% for argument's sake. Of course if a flat tax were to ever be considered it'd be anything from 20% to 23 or 25 or 30%, it'd have to be worked so that no revenue loss occurred.
The fact remains that the present system is stifling our daily lives & change is needed. More spending money needs to be made available for the economy to at least provide hope of a surplus. Everything has changed except the rortable tax system.

individual,
Do you actually know what negative gearing is?
Why do you think people who make losses shouldn't be allowed to claim them against profits for taxation purposes?

I find it quite ironic that you complain about the system stifling people's everyday lives, yet advocate it doing so in a much bigger way in the form of national service! Far from instilling a more moral mentality, it would instil more resentment of the government.

But at the moment, what's stifling people's everyday lives is not the tax rates nor what can be deducted, but the government's attempt to run a surplus.

Do you know what a surplus actually means?
It means the government takes more money out of the economy than it puts in!

Right now the government is still putting too little money into the economy. The private sector are failing to do so despite interest rates being low, because there's not enough opportunities to make money. If the government ran a bigger deficit, there would be more jobs, more spending and more opportunities for the private sector to make money, so the private sector would borrow more (putting even more money into the economy) and employ even more people. This would, as you've mentioned, enable the government to make a surplus sooner (which isn't a worthwhile objective in itself but is sometimes desirable for controlling inflation).

Negative gearing is proof we need tax reform, it funds investors who invest in housing and that isolates lower income earners who pay for the tax break, so they can not own or some times even rent, a home. when and it is when not if, the housing bubble bursts in part negative gearing will prove government subsidy helped inflate the balloon

"people who make losses shouldn't be allowed to claim them against profits for taxation purposes?"
Aidan,
The rest of us aren't allowed to do it, yet we are expected to manage

"It means the government takes more money out of the economy than it puts in!"

If us normal citizens operated like that we'd starve, that's why we always stop spending when we run short & make an effort of putting it back in ! Oh, if only politicians could be that sensible.

"If the government ran a bigger deficit, there would be more jobs, more spending and more opportunities for the private sector to make money,"

That's what we are all drawing attention to, they're not managing ! But, isn't it somewhat magic how they always seem to be able to cough up massive bureaucrat salaries & fund hare-brained schemes ? I hear Consultants aren't doing too badly either when engaged by Govt.