Lead like an Engineer

Dad, business owner, investor, engineer. I debate ideas to achieve a higher level of understanding. If I am wrong, roast me.

[Australian Lobby Group @AusLobby]

🚨 CONSTITUTIONAL SCANDAL EXPOSED 🚨

Albanese’s tax legislation is a flagrant, deliberate breach of Section 55 of the Australian Constitution.

It mandates that any tax law deal with ONE subject of taxation only. Labor has arrogantly bundled multiple tax grabs together, a cynical act of “tacking” designed to ram through their agenda and neuter Senate scrutiny. All whilst trying to bribe taxpayers to turn a blind eye with a $0.68/day reduction.

Shadow Treasurer Tim Wilson confirmed it. Any senators that support the legislation, are breaching our constitution.

Labor’s response? Dismissive disregard for the rule of law.

This isn’t incompetence. This is contempt for our Constitution and every Australian taxpayer.

Senate: REJECT this rogue bill in its entirety.

BLOCK SUPPLY until this arrogant government is forced to respect the foundational document of our nation.

No more games. No more fleece jobs.
Rule of law or bust. The Albanese Labor Government is off the rails.

#ConstitutionalCrisis #BlockTheBill #AusLobby @Greens @The_Nationals @LiberalAus @OneNationAus

[Ben Davison @Ben_Davison1]

I am once again asking you to PLEASE consider running your “idea” through a search engine or even an AI before posting it

There’s a good chance someone else had that idea and/or tested it already

Eg: “Increase GsT & cut income taxes” has been done & wrecks countries & people

[Lead like an Engineer @Engineers2Rule]

@TaxPawspective @tobyeggleston The sale value of my business is my taxable income x 4.

Under an unrealised gains tax, millions of small business owners would pay ~30% tax, then 120% tax on any growth.

I wonder what would happen to productivity 🙄

[Lead like an Engineer @Engineers2Rule]

@angelar68197975 Businesses & corporations still get negative gearing (net profit & loss). Just employee investors are the ones losing out.

[Lead like an Engineer @Engineers2Rule]

@RobToThheOz @Johnson72638291 And that capital gain may be 5 years worth in one tax year.

[Lead like an Engineer @Engineers2Rule]

@tax_oz @JEChalmers 1- A buyer wants the asset for its FUTURE earnings.
2- The current earnings are taxed each year.
3- The seller is getting paid for some of the FUTURE earnings, (and paying the tax upfront.)

The EXACT opposite of this advisor's claim.

[Lead like an Engineer @Engineers2Rule]

@ClassicsofRome My feed got significantly better after I stopped correcting idiots.

[Lead like an Engineer @Engineers2Rule]

@mormorlady Business owners & institutions still get the discount. Just employees that no longer get the discount.

[Lead like an Engineer @Engineers2Rule]

@7_jenkinson @mormorlady @tonytardio Correct, taxing people less increases the size of the pie, which in turn, increases how much tax is collected the following season.

[Lead like an Engineer @Engineers2Rule]

@MarkoMatvikov "But the recent CGT changes will be different. They won't produce worse outcomes for Australians. Companies won't offshore." 🙄

[Milton Friedman Quotes @MiltonFriedmanW]

“If you pay people not to work and tax them when they do, don’t be surprised if you get unemployment.”

— Milton Friedman

[Lead like an Engineer @Engineers2Rule]

If they figure out how working nomads can pay zero tax, it will be full.

[Collin Rugg @CollinRugg]

Plans released for a $16 billion mile-long ship capable of carrying 80,000 people.

The 'Freedom Ship' would be home to about 50,000 people, with space for 10,000 tourists and 20,000 crew members.

"The Freedom Ship is envisioned as a permanently mobile city at sea designed for long-term residence rather than short-term travel," the company says.

The ship would be about 8 times the size of the current largest ship in the world, the Royal Caribbean’s Icon of the Seas.

The plans include a 15,000-seat stadium, schools, colleges, shops, clubs, a water park, a music hall, museums, parks, and more.

The ship, which would run on nuclear, would be too large to dock and would remain in international waters.

Freedom Cruise International says it would go around the world every two to three years.

Insane.

[Lead like an Engineer @Engineers2Rule]

Yeah...-> Interest only loans for decades

[Robin Dods @toy59496]

The Grandfathering Loophole Nobody Has Noticed

I've been thinking through the implications of grandfathering and one potential consequence stands out.

If existing investment properties are grandfathered, they may effectively become long-term "deductible debt reservoirs".

The reason is that interest deductibility generally follows the use of the borrowed funds, not the property securing the loan. Therefore, if an investor borrows against a grandfathered property and uses those funds for new income-producing investments (shares, ETFs, businesses, commercial property, etc.), the interest may remain deductible, subject to the ATO's tracing rules.

Borrowing against the property to pay off a home loan would generally not qualify because the borrowing has been used for a private purpose.

This creates a potentially powerful incentive not to sell grandfathered investment properties. Investors may be giving up not only the rental income, but also a valuable financing platform for future investments.

Ironically, that could reduce turnover of existing investment properties and keep more housing stock locked away from owner-occupiers, the opposite of what the policy is intended to achieve.

The legislation could attempt to address this by limiting grandfathering to debt balances existing at a specified date, rather than allowing future borrowings secured against the property. The critical date could be Budget night, the introduction of the legislation, or the commencement date itself.

If future borrowings are ultimately excluded, investors have a significant incentive to increase LVRs before the relevant cut-off date to take full advantage of the grandfathered debt reservoir.

The details of the legislation will matter enormously.

DYODD: This is simply an observation about a possible consequence of the policy. I don't personally use debt and there may well be aspects of the legislation or tax law that I have overlooked.

[Lead like an Engineer @Engineers2Rule]

@adrianjw73 @capitalistaus Front line workers for Gov are usually poorly paid compared to the back line.

A 20% reduction just focused on the back line might lower the bill by 40%.

[Lead like an Engineer @Engineers2Rule]

@MrHawkeFan Subsidy for moms and dads to compete against wealthy business owners (which still get to keep the subsidy under Labor's proposal)

[Lead like an Engineer @Engineers2Rule]

@AvidCommentator That was Labor's plan from the start.

Lifted from their 1980's playbook.

[Lead like an Engineer @Engineers2Rule]

@JohnnyLydon If person A makes $70k/yr for 5 years and person B makes $0 for 4 years then $350k in the 5th year, who pays more tax?

What tax rules would you propose to make it more fair?

[Lead like an Engineer @Engineers2Rule]

@TaxPawspective I'm old enough to remember when Labor used to put the effort in to wrapping their lies in truth.

[Lead like an Engineer @Engineers2Rule]

@fugarus78 @AvidCommentator @JoshuaD26664236 Everyone I know that has more than 1 investment property, has their 2nd, 3rd, 4th or 5th held in a new & separate Trust for each property.

[Lead like an Engineer @Engineers2Rule]

@cjoye