Fairfax’s Peter Martin has penned a thoughtful piece today arguing that removing the CGT discount, implemented in 1999 by the Howard Government, might be an easier reform than tinkering with negative gearing:
At the heart of negative gearing is a lie, or perhaps a mistake. Most spending isn’t tax deductible, but spending for the purpose of earning an income is. The lie is that the interest payments and the rates and other expenses involved in renting out a property are for the purpose of earning an income. Somehow there has been a mistake and the rent hasn’t covered the costs, but because the intention was to earn an income the costs should be written off against other income.
