BigOl64 wrote on Aug 14
th, 2017 at 1:50pm:
tickleandrose wrote on Aug 14
th, 2017 at 10:22am:
This is thing about pure capitalist is that when the going gets tough, they turn to the biggest socialist. They tend to privatize their profits, and socialize their losses. Before you guys talk down to socialism, may be you should perhaps pay the billions of bail out money (or negative gearing) back to the people.
You do realise the the money received from negative gearing is that person's own money don't you?
It is isn't someone else's money like welfare recipients get it is a tax write off that is returned from the fat stack of cash the person has already paid in taxes.
Is this something that you people don't understand, because you seem to think the refund is coming out of someone else's pocket. It isn't.
Now you can b1tch and moan about un-reconciled bail out money all you want, but negative gearing is not even close to the same thing, it is a tax write off, same and any tax write off that you may claim.
If you like to be strict about it, then all tax money are people's own money anyway. If I run a business, and make a loss. I will not be able to off set that loss against my main income. I will however, get it in a form of tax credit against future gains when my business do start to make money.
With properties however, this loss can be off set against my other main income through negative gearing. So in a way, we are socializing people's investment loss with revenues that otherwise would have been gained if its another business other than property investment.
This creates an inequality in terms of risk between different investments. Which in term, creates an environment where the banks would tolerate more risks with property investment than other smaller business investment types. And this can have flow on effects to the economy - through higher interest rates and principal requirement.
For example, it is alot easier to get an investment loan on a 500k property, upto 400k in loan, at a lower interest rate, than it is to say getting a loan to start a small business of 200k.