Luke Foley offers the bubble party fresh drinks

In the second leaders debate of the NSW election campaign televised tonight, ALP opposition leader Luke Foley proposed buyers be allowed to defer Stamp Duty, allegedly to ‘help improve housing affordability’.

This idea must be condemned. Either Mr Foley is taking NSW voters for fools or is economically illiterate.

Stamp Duty is used by government because the person who writes the cheque is not the one who pays the tax. They quite like this confusion of responsibility and accountability.

In a property transaction, the statutory incidence of SD falls on the buyer – the law says they must pay it. However, the economic incidence falls on the vendor – it comes straight out of their pocket.

The sale of a house worth $550k incurs a SD liability of around $20k. How much would the house sell for in the same market without SD? If you guessed $570, you would be correct.

If SD payment is to be made in instalments or deferred, the contingent liability becomes attached to the asset. Settlement after sale gives the vendor a clean break, renouncing all and any interest in the asset and clearing all future liabilities. With this single gesture, the economic incidence for SD just shifted back to the buyer.

The housing market will immediately re-price houses as the deferred SD, not being required at settlement, can be disregarded.

If Luke Foley’s proposal is adopted, NSW property prices will be abruptly lifted by about 5.5 per cent, the burden placed squarely on buyers and housing affordability worsened.

Sydney’s housing market is white-hot. Price records are being broken and broken again as an army of ‘investors’ scramble to become rentiers in the worst place and the worst time in human history to make the leap. The trend in the investor share of Sydney mortgages is parabolic. That market doesn’t need fresh stimulus.

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Stamp Duty is a very bad tax. It traps people in and out of housing. It falls most heavily on those who change where they live. Those forced to sell by hardship – divorce, unemployment, financial pressures – have the harm compounded by SD.

If Mr Foley genuinely wanted to help NSW citizens through tax reform, he would abolish SD and fund this by removing the principal place of residence exemption from State Land Tax. His proposal tonight is merely another gift to vendors.

1 Comment

  1. Ned Ludd28-09-2015

    LUKE FOLEY – ANDREW CONSTANCE NO FRIENDS OF LABOUR

    TRAVIS KALANICK – CHIEF OF UBER

    HE WOULD NOT PASS A PROBITY CHECK TO RUN A BROTHEL

    PRIVATISE THE BUSES

    MAKE THE TRAINS RUN ON TIME

    GIVE THE THE POLES AND WIRES TO SINGAPORE AIRLINES

    GIVE THE TRAINS TO AMTRACK

    GIVE THE TAXIS AS A FREEBIE TO GENERAL MOTORS HOLDEN

    GIVE THE OPERA HOUSE TO KIM JONG-UN

    MAKE EVERYONE A CASUAL WORKER IN NSW

    12 TAXI DRIVERS KILL THEMSELVES IN IRELAND EACH YEAR SINCE TOTAL DEREGULATION

    THE CELTIC TIGER WAS A FAILURE

    THIS IS NOT AMAZON.com but complete GREED AND BARBARISM

    The New South Wales opposition has called for Uber to be legalised, supporting regulation of the ride-sharing app and Airbnb.

    The NSW opposition leader, Luke Foley, used his budget reply speech to announce he would be introducing a private member’s bill to legalise and regulate Uber.

    http://www.theguardian.com/australia-news/2015/jun/25/labors-luke-foley-calls-for-uber-and-airbnb-to-be-regulated-in-nsw
    ++++++++++++++++++++++++++++
    Travis Kalanick-CHIEF OF UBER

    https://en.wikipedia.org/wiki/Travis_Kalanick

    HE WOULD NOT PASS A PROBITY CHECK TO RUN A BROTHEL

    TRAVIS KALANICK – HIS CAREER

    From Wikepedia

    01-SCOUR

    In 1998, Travis Kalanick dropped out of UCLA with some of his classmates to found Scour Inc., a multimedia search engine, and Scour Exchange, a Peer-to-peer file sharing

    service.In 2000, the Motion Picture Association of America, the Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA) brought

    a lawsuit against Scour, alleging copyright infringement. In September of that year Scour filed for bankruptcy to protect itself from the lawsuit.

    02-RED SWOOSH

    In 2001, with Scour’s engineering team, Kalanick started a new company called Red Swoosh, another peer-to-peer file-sharing company. Red Swoosh software took advantage of

    increased bandwidth efficiency on the Internet to allow users to transfer and trade large media files, including music files and videos. In 2007, Akamai Technologies acquired

    the company for $19 million

    03-UBER
    ++++++++++++++++++++++++++++++++++++++++++++++

    SIR ROBERT ASKIN HAD NOTHING ON THESE PEOPLE

    WHO ARE THESE PEOPLE? – BILDERBERG GROUP

    Peter Andreas Thiel (born October 11, 1967) is an American entrepreneur, venture capitalist, hedge fund manager, and social critic. Thiel co-founded PayPal with Max Levchin and Elon Musk (see PayPal Mafia) and served as its CEO. He also co-founded Palantir, of which he is chairman. He was the first outside investor in Facebook, the popular social-networking site, with a 10.2% stake acquired in 2004 for $500,000, and sits on the company’s board of directors.

    Thiel serves as president of Clarium Capital, a global macro hedge fund with $700 million in assets under management; a managing partner in Founders Fund, a venture capital fund with $2 billion in assets under management; co-founder and investment committee chair of Mithril Capital Management; and co-founder and chairman of Valar Ventures.
    Thiel was ranked 293 on the Forbes 400 in 2011, with a net worth of $1.5 billion as of March 2012. He was ranked on the Forbes Midas List of 2014 at $2.2 billion.Thiel lives in San Francisco.

    Bilderberg Group

    Thiel is listed as a member of the Steering Committee of the Bilderberg Group, a private, annual gathering of intellectual figures, political leaders and business executives
    ++++++++++++++++++++++++++++++++++++++++++++++
    PAYPAL TAXIS NSW

    http://www.theguardian.com/australia-news/2015/jun/25/labors-luke-foley-calls-for-uber-and-airbnb-to-be-regulated-in-nsw

    What It Takes to Replicate the PAYPAL MAFIA’s Success

    Elon Musk, Peter Thiel, and Max Levchin are among the big-name PayPal alum who went on to have their hand in creating billion-dollar tech startups. Learn what it is that these men have in common.

    By Thompson Wall
    Web producer, Inc.@thompson_wall

    When eBay buys your company for $1.5 billion, you might consider spending the rest of your days sipping cocktails on the beaches of Silicon Valley (or just go ahead and buy the beaches themselves). But that’s not what these seven former PayPal colleagues did. Instead, the so-called PayPal Mafia went on to invest in so many of the same wildly successful private tech startups that The New York Times had to map it out.

    Take a look at the billion-dollar boys club below:

    Peter Thiel, one of PayPal’s co-founders and the company’s former chief executive, has invested in four of the most valuable tech companies in Silicon Valley: Airbnb (valued at $40 billion), Palantir ($15 billion), SpaceX ($12 billion), and Stripe ($3.5 billion). Thiel was also one of the earliest investors in Facebook
    +++++++++++

    Jeremy Stoppelman, PayPal’s former vice president for engineering, similarly invested in Airbnb and Palantir as well as Square, Uber, and Pinterest.
    +++++++++++++++++

    Keith Rabois, PayPal’s former head of business development and current partner at Khosla Ventures, previously held executive roles at LinkedIn and Square and now holds shares in Airbnb, Stripe, and Palantir.
    ++++++++++++

    Elon Musk, who co-founded the company that became PayPal, went on to launch SpaceX (now worth $12 billion) and Tesla (worth $23 billion). Oh, and he also invested in Stripe.
    +++++++++

    Scott Banister, a former PayPal board member, co-founded email service IronPort, which sold to Cisco in 2007 for $830 million. Banister has also invested in Uber and SpaceX.
    ++++++++++++++

    Max Levchin, PayPal co-founder and its former chief technology officer, sold social gaming company Slide to Google in 2010 for $182 million and recently started online payments company Affirm. Levchin also has stakes in Pinterest and Stripe.
    ++++++++++++

    Roelof Botha, former PayPal head of business development and current partner at Sequoia Capital, has investments in Square.
    ++++++++++++

    The undeniable presence of former PayPal executives within Silicon Valley’s tech landscape goes even deeper than just the big seven. LinkedIn, now worth $31 billion, was co-founded by former PayPal chief operating officer Reid Hoffman. Stoppelman and lead software architect Russell Simmons co-founded Yelp, worth $3.51 billion. In 2006, Steve Chen, Chad Hurley, and Jawed Karim–all PayPal alum–founded YouTube, which was acquired by Google for $1.6 billion. So how is it that one dot-com-era company continues to churn out billion-dollar success stories?

    One part of the equation is that “success begets success,” the Times notes.

    “There’s a network effect to these things,” Yelp CEO Jeremy Stoppelman tells the Times. “If you have a name that’s associated with success, people will seek you out. Why do smart people go to Harvard? Because previous smart people went to Harvard.”

    The second part of the equation is slightly more feasible for most entrepreneurs but nonetheless vital for setting up your business for industry domination at the get-go. In his book Zero to One, Thiel identifies seven questions that every business must answer if it hopes to reach the same level of success as PayPal:

    THIS IS NOT AMAZON.com but COMPLETE GREED AND BARBARISM

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