Luxury Car Tax (LCT) Increase - How Do You Feel?

[richdave]

the one thing however, i don't agree with, is the price at which the luxury car tax starts. since when is a $57,000 car a luxury car. i don't consider a toyota landcruiser a luxury car.....do you?

it should be up around $70,000 - $75,000.

I agree that the rate cuts in too early. What we need is true tax reform but NONE of the pollies, left or right, have the balls to do it.

Tax law should be simple.

Earn money = pay tax

Make it flat rate so it is equitable across the board, Apart from say a $10k taxfree threshold, NO exemptions, write off, refunds, just a simple LOWER flat rate. No need to do tax returns....

While ya'll are bagging Rudd, remember that Howard did not have the balls to abolish negative gearing which is welfare for the rich by stealth. How much of your hard earned paid in tax goes to subsidise the guy across the roads rental?

[richdave]

i don't consider a toyota landcruiser a luxury car.....do you?

Luxury - NO, CRAP - Yes...

[gareth_oau]

While ya'll are bagging Rudd, remember that Howard did not have the balls to abolish negative gearing which is welfare for the rich by stealth. How much of your hard earned paid in tax goes to subsidise the guy across the roads rental?

Tax changes arent that simple.

have you ever rented a house?

With no negative gearing in place, why would people buy rental properties?thered be a lot less rental properties available, and those available would cost a whole lot more to rent.

its not about how big somebody's balls are, its about keeping a lot of people happy (which is never easy)

(ps, i dont and ive never had any negative geared properties, just expersssing an objective viewpoint!)

[edoom]

I think readers from this forum are being hit the hardest by the new LCT. The cars we discuss and buy here are not really that luxury... -- if you like, right on the threshold.

As for me ( I am sure similar to a lot of people here), I work very hard, earns decent salary, however all cash goes to bills and 2 investment properties, so I can only afford something cost around 65-80K. If one say, oh, 600 dollars difference is not much, no no mate, to me, that's quite a bit.

It may just be me, but I absolutely resent those yobos who on welfare and contribute virtually nothing to the society and Mr. Swan labelled them as hard working families?

To me, you are what you can make it. I have no sympathy for those who whinge on Trash Tonight about their house being repossessed because they blow all their savings before saving up; signed up for a subprime loan AND didn’t read the fine print.

[VW Convert]

While ya'll are bagging Rudd, remember that Howard did not have the balls to abolish negative gearing which is welfare for the rich by stealth. How much of your hard earned paid in tax goes to subsidise the guy across the roads rental?

Getting off topic here but........I seem to recall this was abolished during the Hawke years and guess what happened.........investors pulled out of the housing market in droves leaving a drastic shortage of rental accommodation.

I have 2 investment properties which I am subsidising hand over fist at the moment, if negative gearing was abolished I would have no choice but to sell them (almost without doubt at a loss). Even with negative gearing residential property at the moment is a dubious investment, without it, it is a certain loss maker. It would be unlikely that an investor would buy so those houses would be lost to the rental market which already has an extremely low vacancy rate.

Oh and don't forget, if I do make a profit from selling a negatively geared property CGT comes into play.

As far as LCT is concerned this government's idea of a luxury car is grossly out of kilter, threshold should be a fair bit higher to take every day cars out of the equation.

Cheers

George

[jamesatfish]

Another disappointed car buyer here - as many others have said the threshold is far too low, and justifying a tax by saying 'well those who can buy those cars can afford the extra tax' is just an insult to those who work as hard as they do in order to afford such luxuries in the first place.

As others have noted, car manufacturers put a lot of effort into determining the specification and price points for various versions of their cars. Consider the Holden Commodore - for instance the Calais V-Series. Holden have obviously taken their time to consider there is a $5000 price gap between the V6 and V8 models, the latter of which sits above the LCT threshold. If the V8 goes up $500 due to the government increasing the tax, and Holden's market research has said the V8 should command a $5000 premium, then the natural thing to do is increase the price of the V6 to keep the price gap the same.

So the 'battlers' who buy cars below the LCT threshold will end up being taxed by a similar amount - just with the revenue going to the car manufacturers, not the government.

Of course, unless I missed the changes to the fine print about what defines a 'luxury car', you can still go out and spend close to $100,000 on a HSV or FPV Ute (which, despite having leather, premium sound, massive V8 etc, is still a commercial vehicle) - not to mention the extra FBT benefits involved.

[gareth_oau]

This is a little off topic, but its a great story about paying taxes and "tax custs for the rich!!)

You've heard the cry: "It's just a tax cut for the rich!", and it is accepted as fact. But what does that really mean? The following may help.

Suppose that every day, 10 men go out for dinner. The bill for all 10 comes to $100. They decided to pay their bill the way we pay our taxes, and it went like this:

* The first four men (the poorest) paid nothing.
* The fifth paid $1.
* The sixth $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth man (the richest) paid $59.

All 10 were quite happy with the arrangement, until one day, the owner said: "Since you are all such good customers, I'm going to reduce the cost of
your daily meal by $20." So now dinner for the 10 only cost $80.

The group still wanted to pay their bill the way we pay our taxes.

The first four men were unaffected. They would still eat for free. But how
should the other six, the paying customers, divvy up the $20 windfall so that everyone would get his "fair share"?

They realised that $20 divided by six is $3.33. But if they subtracted that
from everybody's share, then the fifth and sixth men would each end up being paid to eat. The restaurateur suggested reducing each man's bill by roughly the same percentage, thus:

* The fifth man, like the first four, now paid nothing (100% saving).
* The sixth paid $2 instead of $3 (3% saving).
* The seventh paid $5 instead of $7 (28% saving).
* The eighth paid $9 instead of $12 (25% saving).
* The ninth paid $14 instead of £18 (22% saving).
* The tenth paid $49 instead of $59 (16% saving).

Each of the six was better off, and the first four continued to eat for free, but outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man "but he got $10!"

"That's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more than me!"

"That's true!" shouted the seventh man. "Why should he get $10 back when I
got only $2? The wealthy get all the breaks!

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner. The nine sat down
and ate without him, but when they came to pay the bill, they discovered
that they didn't have enough money between all of them for even half of it.

That, boys and girls, journalists and college professors, is how our tax
system works. The people who pay the highest taxes get the most benefit
from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good
restaurants in Monaco and the Caribbean.

[VW Convert]

If this Government had the "green credentials" it claims to have, LCT would be replaced by a tax based on the efficiency of the car rather the price of the vehicle. Less fuel consumption = less pollution = less tax.

Sorry if I sound cynical!

Cheers

George

[gareth_oau]

If this Government had the "green credentials" it claims to have, LCT would be replaced by a tax based on the efficiency of the car rather the price of the vehicle. Less fuel consumption = less pollution = less tax.

Sorry if I sound cynical!

Cheers

George

they are looking at this one as well, however, i think that the tax should be on the petrol, not on the car. If I own a big expensive V8, but never drive it, where as if you own a misely 4 cylinder, but rack up long distances, then a tax on the car itself isnt green. IMO to be effective the tax should be on the petrol

[VW Convert]

they are looking at this one as well, however, i think that the tax should be on the petrol, not on the car. If I own a big expensive V8, but never drive it, where as if you own a misely 4 cylinder, but rack up long distances, then a tax on the car itself isnt green. IMO to be effective the tax should be on the petrol

Fair comment Gareth, hard to please everyone isn't it?

Cheers

George