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

[gareth_oau]

negative gearing is just a fancy name for overall investment. if a business is making money it pays tax, if one division is making money and yet another is losing money, it consolidates its revenue, and pays tax on the net income.

if an individaul has a job - he/she pays tax. however if he/she has other investments which are making a loss, then he/she can consolidate revenue and pay the net tax.

this is the principle of negative gearing, it allows indivuals to consolidate revenues and losses.

Of course, the investor will pay a very large amount of tax when the investment ripens (in theory) in due course - so its not a subsidy,its recognising short term losses vs longer term capital gains.

what you are suggesting is that nobody should be able to claim losses? you pay tax on the gains, but wear all the losses? this is hardly a balanced argument.

[rark]

How about the raft of taxes we investors pay? Stamp duty on the mortgage, stamp duty on the purchase of the property, council rates, water rates, stamp duty on the insurance of the property, land tax etc etc.

George

These taxes are not Federal. Stamp duty is a state tax, and rates are a local tax.

The Federal government is not going to reduce LCT, or income tax..... just because the State government is slogging us with stamp duty etc

[OilBurna]

Vic Govt actually cut stamp duty just over a year ago. Saved me about $600 on the Passat, changed the day before I took delivery.

[VW Convert]

These taxes are not Federal. Stamp duty is a state tax, and rates are a local tax.

The Federal government is not going to reduce LCT, or income tax..... just because the State government is slogging us with stamp duty etc

Yes absolutely true and I was aware of that. I was making a point in regards to the statements that were made regarding negative gearing which of course are off topic.

The point I was making was that whilst property investors do receive a tax deduction for their expenses they also make contributions in other ways. If negative gearing was eliminated and property investors bailed out, those taxes would not be collected and both State & Federal governments would then find someone else to slug.

Cheers

George