Capital Gains Tax

TAFKAS is not a tax expert and clearly there are material differences between the US and Australia.  But … according to research from the Joint Committee on Taxation of the US Congress:

suggests that for every 10 percent increase in capital-gains taxes, capital gains from stock sales fall about 8 percent in the long run because of fewer sales. In many cases, especially in the short run, the increase in the tax rate is swamped entirely by this effect, meaning tax hikes on capital gains could lose revenue.

A tax increase that does not generate revenue and potentially loses revenue.  Hmm.  Has Mining Tax Swan been consulting in the US recently?

One also wonders what spending the ALP has booked against its tax hike windfall?

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18 Responses to Capital Gains Tax

  1. stackja

    Another ALP miscalculation?

  2. Fred

    Capital Gains Tax is the easiest tax to avoid.

    Just don’t sell the asset.

  3. Geoff

    Slightly diverging off topic, but could any finance types comment on ASX200 companies providing a election to participate in franking of dividends much like they offer for participation in dividend reinvestment plans?

    Or are franked dividends the result of applying “fixed” tax law to a company’s operations and the level of franking is largely out of the companies hands?

  4. Bruce of Newcastle

    We don’t have to worry.

    When Shorten trashes the housing market through the removal of interest deductions there will be no capital gains to be taxed.

    And after he removes dividend imputation for everyone except the union bruvvers and their not-for-profit (hoho) superfunds the falling share market will mean no capital gains to be taxed there either.

    I fondly remember all those houses in Detroit on sale for $1. No one could afford to buy them because the tax imposts on them were so ferocious. So all that former capital rotted away and was eventually bulldozed.

    I’m sure Shorten’s unionists will cheerfully drive the bulldozers after he finishes purging the kulaks.

  5. Infidel Tiger

    TAFKAS is not a tax expert and clearly there are material differences between the US and Australia. But … according to research from the Joint Committee on Taxation of the US Congress:

    What a surprise that a group owned holus bolus by the corporatist lobbies that run Washington DC and Canberra has come back with this finding.

    Unless they never intend to release the capital, this is a load of bullshit.

  6. hzhousewife

    We don’t have to worry.

    When Shorten trashes the housing market through the removal of interest deductions there will be no capital gains to be taxed.

    And after he removes dividend imputation for everyone except the union bruvvers and their not-for-profit (hoho) superfunds the falling share market will mean no capital gains to be taxed there either.

    Beautifully said Bruce, once again this site provodes me with ammunition with which to go forth into the fray once again, and beat back the feelings of impending gloom.

  7. Tim Neilson

    Or are franked dividends the result of applying “fixed” tax law to a company’s operations and the level of franking is largely out of the companies hands?

    Hmm, sort of. There are tax disadvantages imposed on companies which try to “stream” franking credits to some shareholders and not to others.
    I’m not saying it couldn’t be done but it’s something the system is designed to penalise.

  8. John Constantine

    Taxing capital gains with the asset unsold.

    Isn’t that what the Stalinist orcs of the council rating system do?.

    Comrades.

  9. John Constantine

    Easiest way to tax capital that proles steal from the State by not selling it and spending the money:

    Deem that the capital should have earned enough money to pay a certain amount of Tax, and levy that deemed tax on the prole.

    Comrades.

  10. hzhousewife

    Deem that the capital should have earned enough money to pay a certain amount of Tax, and levy that deemed tax on the prole.

    Comrades.

    Ahh, deeming, I seem to recall that from somewhere, is it still in operation? Was it deemed interest earnings for pensioners bank accounts or something similar.

  11. Bruce

    “Just don’t sell the asset.”

    See also: “property tax”, “poll tax”, “assert tax”, “inheritance tax”.

    And then, there are “levies” for all manner of wondrous schemes.

    Almost forgot: Excise, royalties, duties.

    Licence and permit “fees”.

    Need I go on?

  12. Rockdoctor

    I have been stung a few times by this legalised theft over my working life offloading assets. My solution was to minimise income in the financial year of disposal to just enough to survive which took discipline. The first time I was stung it shocked me but subsequent events just made me angry. I am not surprised about the findings honestly…

    As for taxes, Australia get ready for a BOHICA event under Shorten Labor…

  13. Gavin R Putland

    CGT shouldn’t apply to share transactions, because capital gains on shares may represent re-investment of profits. A properly designed CGT would treat such re-investment as part of the cost base, not as part of the taxable gain. Moreover, profits don’t morph into economic rent just because they are re-invested. If you believe in taxing economic rent manifested as “capital gains”, you have to look at the underlying assets and keep your hands off the shareholders.

  14. Cementafriend

    The senate may not agree with the Labor taxes. I suggest everyone vote below the line and do not vote for anyone in the Greens or the ALP.

  15. John Stankevicius

    Dear Fred and John Constadine
    Uufortunately assets are having to be sold by retirees to maintain their lifestyles,mainly to eat well and pay their electricity bills or solar panels. This has been happening over the last 10 yrs as interest rates have been kept low to keep borrowers of McMansions afloat. As this policy reached its limit immigration increased to keep house prices up in Sydney and Melbourne. Savers have been penalised while people who have borrowed too much have been rewarded. Those relying on inheritances will be disappointed as their parents will have to sell everything to pay the nursing homes fees . Govt jobs almost equal private jobs whose wages and conditions have been declining while business owners profits have been in freefjall due to government. Award wages keep going up power is out of control you need licences and registrations for everything,govt charges keep going up and on top of this you pay for solar panels and a bigger speedometer to avoid speeding fines.

  16. Lilliana

    John Stankevicius
    #2922680

    Summed up situation perfectly.
    Liberal and Labor have both betrayed us, and are clueless as we spiral out of control. Mass immigration is keeping this Ponzi scheme (real estate) going but it’s destroying this once great nation. If you think mass immigration and living in each other’s armpits is a good idea then fuck off and move to Asia. Sydney and Melbourne are ruined and other capitals are not far behind. Thanks you traitorous bastards in Canberra.

  17. Flyingduk

    I dont doubt it: I am sitting on cryptocurrency gains and have not sold because doing so would result in the state holding its hand out for 1/2 of the profits, despite having provided none of the capital and taken none if the risks.

  18. Ƶĩppʯ (ȊꞪꞨV)

    I dont doubt it: I am sitting on cryptocurrency gains and have not sold because doing so would result in the state holding its hand out for 1/2 of the profits, despite having provided none of the capital and taken none if the risks.

    go overseas and cash them

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