Re the AFTS Tax Forum in Melbourne late last week, a number of articles came out highlighting points favourable to our cause.
Tim Colebatch writes in Scrap Negative Gearing:
The review, chaired by Treasury secretary Ken Henry, is due to deliver its report to the Government by the end of this year. Professor Sorensen, a corporate tax expert, is one of several leading international economists brought out to advise the review on possible directions for reform.
His joint paper with Mr Johnson proposes a radical change to Australia’s corporate tax system, allowing companies to deduct a standard return to shareholders — roughly 5 per cent on their equity — from their taxable income, cutting company tax by up to a third.
They suggest the cost to revenue — up to $24 billion a year — could be filled by closing long-established loopholes in the taxation of capital income, including:
– Closing the negative gearing loophole used by more than a million housing landlords, by imputing a standard profit margin on rental housing investments.
– Taxing home owners an imputed rent on the annual value of their housing.
Whilst there was the usual acceptance of land rents being the most efficient method, we need a public education campaign on how this can help avoid future boom busts.
