When You've Paid Your Rent, You've Paid Your Way
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Following Gavin’s recent presentation, we thought those of you who missed it might find this of interest. Flick through the 6 slides according to the audio below.
Our premises is based in the Hardware Lane cafe precinct. Enjoy the background jazz.
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Main presentation
Question time
Four corrections/clarifications:
(1) The ABS price index for the last two quarters is based partly on lenders’ data, and partly on incomplete figures from the Valuers General / Land Titles Offices in the States and Territories. The incompleteness of the latter explains the delay in publishing the volume of sales. So the fault lies with the State/Territory governments, not the ABS.
(2) The increase in capital gains tax in the UK was not as big as the purported leaks suggested; the maximum rate for individuals was raised from 18% to 28%.
(3) My recollection was faulty on one point: Treasury’s estimate of the cost of the CGT exemption for the “family home” — $31.5 billion in 2009/10 — assumes that interest and imputed rent are both ignored and that capital gains are taxed at the full marginal rate WITHOUT the 50% discount (whereas I assumed it was WITH the discount). The 50% discount on other capital gains cost another $5.3 billion, giving a total of $36.8 billion. This would be reduced if base values were adjusted for inflation. So my off-the-cuff estimate of the revenue raised by expanding the CGT was too high. BUT…
(4) Chart 11.1 of the Henry Report (http://taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/publications/papers/Final_Report_Part_1/chapter_11.htm) indicates that if taxes on production are reduced and about HALF of the forgone revenue is replaced by taxes on economic rent, the rest of the revenue will be replaced by the growth dividend and “enhancing social and market outcomes” (presumably including fewer people on welfare).