Originally Posted by
elZorro
Correct, wage and salary earners have no opportunity to defray tax due, unless they get into property or business investments. If these work out, the investor loses immediate cashflow into claimable interest payments and/or costs, but should see a capital gain in the future that is not taxed. The system is set up this way to incentivise people into those investments. My only beef with this is that if a very large chunk of the investments are in rental housing, commercial property and farms, there will be a tiny tax base from those activities, compared to the capital involved. Which means the govt budget deficit has to be picked up by the low-hanging taxpayers, the former group who simply go to work each day.
Labour has a plan to change the levers in this old system that has outlived its usefulness. We'll then line up with most overseas countries. A CGT has to be imposed, fair across the board, and I think that since investors always get special deals here and there, the family home should be exempt below a certain figure, to remove the whole issue for a large chunk of people still making their way up into their first and most important investment.