It’s time to abolish negative gearing

What to do?

Policy outcomes can be enhanced by quarantining negative gearing deductions to the purchase of newly constructed properties, but not for established properties. It would be even better to remove it, as it makes little sense to subsidise property investors, regardless of the reasons for investment when there are better policies for helping low-income tenants.

Also, the negative gearing debate presupposes the existence of income taxation, which has no justification when evidence suggests that substantial amounts of tax revenue can be raised from far more efficient bases. Productive individuals and business already bear the brunt of income tax, which is merely one of 125 burdensome taxes.

According to the property lobby, it's too dangerous to reform negative gearing, let alone abolish it. Fortunately, there's no requirement for anyone to believe the lobby, given the weight of evidence against their assertions and the fact that they have enough conflicts of interest to fill a book.