Hockey backs land tax on family homes

Discussion in 'Current Affairs' started by SpacePete, May 20, 2015.

  1. trew

    trew Active Member Silver Stacker

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    given the majority if Liberal voters would also be home owners, can't see this move going down well for the Liberal party
     
  2. JulieW

    JulieW Well-Known Member Silver Stacker

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    Hasn't stopped them alienating their base so far. Abbott is still the most incompetent politician I've seen in a long time and there's been some doozies! Even though the polls mostly show swingers are warming to him now he's giving them money, I still think they're a one term government, though the rider would be whether Shorten can look like more than a shiver racing up a spine - to quote a former PM.

    This is from a newsletter that came along with the Seniors Card - big reach into the over 55 year old demographic

    You can imagine the response then to the concept of looting the sacrosanct family home.
     
  3. Roswell Crash Survivor

    Roswell Crash Survivor Well-Known Member Silver Stacker

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    Elizabeth Warren, US Senator for Massachusetts; she was on the Oversight Committee for TARP (Troubled Assets Relief Program) back in the panicky days of 2008/9.

    Odd things what you remember from watching C-SPAN at odd hours.
     
  4. lurk@l0t

    [email protected] Active Member

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    Yeh they're the only true libertarian choice of all the political parties in australia, but i'm afraid Australians (including the majority on this forum) are just too plain stupid to vote for them! :lol:
     
  5. yennus

    yennus Well-Known Member Silver Stacker

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    It appears that most voters (Labor or Liberal) are happy with more surveillance (e.g. metadata laws), more control (e.g. firearm restrictions), more wars (e.g. War on Terror), more censorship (e.g. Wikileaks), and more taxes (e.g. GST, deposit tax, land tax, etc).

    I suppose slaves just don't really care about privacy, freedom, peace, free-speech and personal wealth - after all, it's all for the good of Team Australia.
     
  6. Jislizard

    Jislizard Well-Known Member Silver Stacker

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    I was thinking about buying a couple of acres to retire to, but now it looks like I will have to seriously think about moving in with family to share the costs.

    But is that what they want you to do, concentrate in the cities so you are easier to manage and don't increase the infrastructure costs...
     
  7. rbaggio

    rbaggio Active Member Silver Stacker

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    Only in the ACT. 99-year leases.
     
  8. Jislizard

    Jislizard Well-Known Member Silver Stacker

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    Well maybe if the Party had registered in QLD in time some of the forum members would have been able to vote for them...
     
  9. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    Or until you miss too many land tax payments. Your ownership is at the pleasure of the government. They may alter the deal.
     
  10. JulieW

    JulieW Well-Known Member Silver Stacker

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    Yes I remember that. She's been giving the banks a hard time and has resisted the push for her to run for Prez. Very interesting woman.
     
  11. phrenzy

    phrenzy In Memoriam - July 2017 Silver Stacker

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    My mother is a pretty good example of why this doesn't work. When my parents split up she spent every cent she had to buy a run down house without a loan. She paid the stamp duty and was left with next to nothing. The property value went up a fair bit over the years and although she's in a better place financially now she could not have paid this tax after a few years and it had eaten up the cost of the initial stamp duty she would have saved.

    I think collecting the tax on transactions is much more fair since any change in value without a transaction is unrealized. If you make a good choice and buy in a neighborhood you should not have to risk having to sell your family home because the market moves around you. If you sell and make an actual realised profit that's different, that's cash in your hand and you're not lining there any more. The only other scenario where this might be appropriate might be a rental where the rental income increases but that income is already taxed.

    If your not buying a home because of stamp duty then you're buying above your means. This 0% down, lower the barrier to entry, just pay the interest mentality is fuel for a bubble that increases property prices even more that lead to these things becoming more common. Wash rinse repeat.

    I'm a consumption tax guy, I think the fairest way to judge how much money people should fairly be taxed, not the value of your assets. When you can only afford to buy a cheap house you shouldn't get taxed too much, you aren't consuming more, nor has your income increased just because the theoretical value of your house has increased.
     
  12. AngloSaxon

    AngloSaxon Active Member

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    Another unjust idea.
     
  13. tozak

    tozak Well-Known Member Silver Stacker

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    [youtube]http://www.youtube.com/watch?v=kPRGblJTPRE[/youtube]
     
  14. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    It's almost as if your very right to live is becoming contingent on being able to provide an ongoing and arbitrary revenue stream to the government. If local council rates are not covering services provided (but probably provided inefficiently) then maybe rates should rise. If road maintenance is unfunded, add a toll. But adding a value tax on the family home is simply a cash grab that will incentivize governments to push up land values even more.
     
  15. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    (a) Its not a tax on the value of the home, it's a tax on the value of the land underneath the home.

    (b) The best way for the government to increase their tax revenue under a land tax model is to release more land and provide better services. They can try keeping supply constrained, but that only works for a while until people get pissed off and leave and it introduces a whole lot of inefficiencies in other areas.

    The strategy/laziness at the moment is based on restricting supply and having owners flip their properties for a profit because the government takes a big cut of the transaction. The property owners don't necessarily have to do anything productive with their land, like improve the quality of a house or build something to support an efficient density level, they just have to sit on it and let the supply-demand imbalance to it's work and...magic! The value of the property goes up.

    Adding value to new land releases with roads, schools, hospitals, shops, public transport and communications networks means the new land is more desirable and they can justifiably charge more tax for it.

    It's very similar to what you suggested about adding a toll to fund road maintenance: the user pays. The difference is that you're "using" the land all the time and the amount of value you get out of it depends largely on the amenities around the land and whether you use what you have efficiently.
     
  16. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    The theory is nice, but does it work? By taxing the potential "value" of existing residential land, the incentive will be to further inflate land values where services are already paid for since it will provide an immediate revenue boost for zero cost. And what's to stop the government saying that a home or small apartment block is not maximizing the economic benefit of a bit of land and then setting its value to some theoretical value based on an alternative usage scenario?

    You say people will just get pissed off and move, but move to where? In general, people with limited finances are restricted to centers of employment where they can earn an income. There is a limit to how far out people can live and still commute.

    A land tax is not guaranteed to cause governments to suddenly start investing (wisely) in major transport, communications, and other public projects, especially when the payoff is some time in the future and with ideological party objections to such projects.
     
  17. petey

    petey Active Member Silver Stacker

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    It's funny and all that, but his taxes are going to need to go up as they'll need to emplore more government workers to count $1 bills.
     
  18. FlashInThePan

    FlashInThePan Member

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    Big A.D.,

    Who do you believe is the equitable title holder of the land?
    Cite the law that shows how an equitable owner can be taxed for simply owning property?
     
  19. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    Well, nothing would stop that from occurring, but that's sort of the point: you can have a 2 bed semi on a quarter acre block in the middle of the city, but you'll pay through the nose for it so you'd be better off demolishing it and building 30 2 bedroom apartments on the block instead. That's a more efficient use of the land and the tax burden is spread across 30 residences versus just one.

    Lots of angry voters would prevent the government from unilaterally transitioning from stamp duty to a land tax. It would have to be introduced progressively over decades.

    And that's where people have to make a decision about their cost of living: far out and cheap or in the city and more expensive?

    People have to do that now, except the current system encourages land supply to be withheld to push up asset values so more tax is payable when property changes hands. That ultimately makes everything more expensive, even though the government's cut of the increase is relatively small: a $750,00 property in NSW that increases to $850,000 will get the government an extra $5.5k, but the next guy who buys it has to stump up an extra hundred grand. Yay for the government, but that's $100,000 has to come from somewhere and it tends to come out of the buyer's future earnings which they can't spend on other things to keep the economy ticking over.

    Actually engineering asset prices upwards is ludicrous if you're hoping to have a functioning economy in the future.

    I agree, and I think that asking anyone on a three year contract to implement strategies that play out over decades or even hundreds of years isn't a particularly brilliant idea, but that's the system we've got.

    They've spent the last 30 years pushing the property flipping policy and we've got the some of the highest property prices in the world without the services and amenities to match. Maybe it's time we started looking at a tax system which encourages actual, dictionary-definition "investment" in infrastructure.
     
  20. FlashInThePan

    FlashInThePan Member

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    Big A.D.,

    Do you believe Govt owns the land fee simple absolute and that the "owner" is merely a tenant in common?
     

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