Hidden Gold Taxes: The Secret Weapon Of Bankrupt Governments

Since there appear to be so many cheer leaders here for capital gains tax (CGT) i thought this article may be a good read for you to see how it will affect your attempts to protect yourself from inflation by purchasing a tangible asset.
The example uses gold. but it could also be directly applied to property or silver or anything else...

http://www.financialsensearchive.com/fsu/editorials/amerman/2010/0611.html



Just for the sake of clarity for Renovator, this has NOTHING to do with negative gearing.
I believe that negative gearing is an evil that needs to GO!
Likewise, CGT is an evil that needs to go! but they are entirely separate issues.

CGT is nothing short of enforcement of the theft by the most evil of all taxes - INLFLATION ...

Oh, and for those of you who howl about the requirement for CGT as a nescessity in order to tax people who "flip" assets - whether it be properties, PMs, shares or any other asset - i actually agree with you!
However, there is already a provision in the tax code for that - it's called being classified as a TRADER...
One can argue about the cut-off point between being a trader and being an investor. i.e. 12 months etc but thats an argument for another day.

My postion is simple - if an asset is bought as an investment - as opposed to being traded/flipped after a relatively short period of time - there should be NO CGT payable simply because the lions share of the "capital gain" can invariably be attributed to inflation.

 

Agreed.

I'd happily trade in the chance to negatively gear to get rid of the tax when investments are positive!

 

Everyone knows that if you keep cash or "money in the bank" the interest return must be greater than the inflation rate for your money to maintain its purchasing power into the future.

Its misleading in articles like this to say that "Kate" puts $100k into the bank and after some period of time she loses in effect 50% of her money to inflation.

Because say inflation is 4% and you take your $100k and put it in a term deposit @ 7% you will in effect have your purchasing power grow by 3% a year in a cash investment.

Depending on your tax situation this 3% could be reduced. But at say the 0.30 tax bracket:

$100,000k @ 7% p.a. = $7,000 gain after 1 year.
Less tax of 30% ($2,100)
Less inflation of 4% ($4,000)

In the end tax and inflation roughly equal the % return for the year so the result is, you have maintained your purchasing power with essentially zero risk to your capital.

 

Moral of the story is don't buy investment assets. You will lose it all to cgt. Instead buy fast cars and nice houses. At least you get some enjoyment from those types of assets! Better yet move to a country where there is no cgt, I'll leave you to link an article to where those countries are. I'm pretty happy in australia

 

yeah i like it here too we got our problems & crap systems but i'd rather be here than anywhere else

 

I'm against all forms of taxation.

Yes, all of them.

 

Hong Kong has no CGT but there is no market for Physical Precious Metal Also.

 

Assumptions were made for various scenarios...
The first scenario for instance was that after a certain period of time, the real rate of inflation had depreciated purchasing power by 50%.
Your example of 4% inflation has absolutely no bearing on this discussion.
I'd suggest your read the link again more carefully this time.

 

In for private police force and education and healthcare only to those children who's parents can afford it! Sounds good auspm...!

 

Your attitude is unfortunately all too common in Australia where people can piss their money out as they like - which of course i have no problem with since its their money.
The part i DO have a massive problem with is that all these people then dont need to take any responsibility for their actions because the government will fund their retirement by stealing from other people via our onerous/thieving taxation system.

So while certain people live frugally and within their means to try and build up some wealth for themselves and their families there are all too many such as yourself living it up and encouraging others to do the same because hey - we can steal other peoples' wealth by force.

With your type at the helm this country will no doubt end up as just another 3rd world country.

Ignorance is bliss hey mate?

 

Sure is! Jealously must be bitter?

 

Sure does!

Only many many more people will be able to afford it than you think because people would have much more dispensable income without having half of it (or more) stolen by the government.

And hell, those bludgers sitting on their arses all day, living off the fruits of others, may then actually realise its time to provide for themselves instead of leeching off of others.

 

Not really, i'm not jealous of parasites who think other people owe them a living.

 

If thats your attitude then what are you doing on a forum for PM stackers?

The article i posted should be a serious wakeup call to anybody with more than a thimble sized brain.
Go figure

 

Yky ....I'll put away my spoon now.

 

Yippee you first say you have no problem with him then you say hes ignorant if he wants to buy a ferrari its his money !!! He pays taxes so how is he stealing anyones money ?.He probably contributes the same as you . Are you jealous because your sitting on the bus? living frugally & eating dry bread & hes having a good time ? good on him i say .Youir personal attacks on others that dont have the same mindset as you are ridiculous As far as i can see you are the ignorant one here

 

They could pay for it via a low rate consumption based tax, like the GST. All other forms of tax should be dropped as the government can be radically downsized and wouldnt need so much money to be pilfered from citizens pockets.
I agree that certain things need to be put in place by a government, such as police, courts system, defence force, road infrastructure, and the like, but thats about it.
The big government nanny states we have all over the western world in unsustainable and is in the process of collapsing.

All those with an entitlement mentality will have to get off their arses and start doing things for themselves instead of relying on government to forcefully remove property from others.