Further to the last blog, a bit of research found this excellent series of articles and views on this topic, posted by Michael McNamara on April 13, 2007 on Domain.
http://blogs.domain.com.au/2007/04/time_to_overhaul_negative_gear_1.html
The point is made that negative gearing drives much more than just property prices, with share investors also negative gearing their borrowings to buy shares.
Households with cash in hand are penalised, paying full income tax on received interest from bank accounts or investments, which only encourages households to spend the money and borrow when they need more.
The events since 2007, where excessive debt caused world-wide financial devastation, lost immense amounts of investors' money, and cost millions of jobs, might be seen as evidence of the problem of this debt-structured society!
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