GenX Aussie Matty

Livin the Life... GenXer...

[GenX Aussie Matty @MattyGenX]

@Cde_begar @EricLDaugh Go to a pub, not hard

[GenX Aussie Matty @MattyGenX]

@ThaEuropeanLad Lol, will always be Soccer, go the Socceroos!!!!

[GenX Aussie Matty @MattyGenX]

@AmeliaBee7 Left eating the Left, lol

[GenX Aussie Matty @MattyGenX]

@AustraliaFut Where is Okon and Zelic, Viduka

[GenX Aussie Matty @MattyGenX]

@JmarrMarr Left getting worried, Katy G at the Senate meeting, lol

[GenX Aussie Matty @MattyGenX]

@BowesChay Show the longer term graph

[GenX Aussie Matty @MattyGenX]

@HipHopJJRedick No, the rest are not self appointed goats

[GenX Aussie Matty @MattyGenX]

@APompliano Lol, gotta be dynasty

[GenX Aussie Matty @MattyGenX]

@DaveKelland Lol

[GenX Aussie Matty @MattyGenX]

@VinnysCorner1 Bird

[GenX Aussie Matty @MattyGenX]

@David_McMahon75 Exactly, most investments are from post tax income

[GenX Aussie Matty @MattyGenX]

@LambDownUnder Horrific

[Bashful Bill @bashful_bi70210]

Labor voted against even higher tax cuts for every Australian worker.

[GenX Aussie Matty @MattyGenX]

@bashful_bi70210 Exactly 💯

[GenX Aussie Matty @MattyGenX]

@agroasx @SawyerMerritt @SpaceX Even got a pre ipo cfd at Pepperstonr, ridiculous.. punters going to hitting the ipo hard.

[GenX Aussie Matty @MattyGenX]

@JaneCaro The current laws are not changing, how is this relevant?

[GenX Aussie Matty @MattyGenX]

@keithmarlowau Good grief

[Chris Brycki @chrisbrycki]

A couple of weeks ago I wrote about a major flaw in the government's proposed capital gains tax reforms. 

Using a four share portfolio, I showed how replacing the current 50% CGT discount with inflation indexation could increase the amount of tax paid by investors by ~61%. The example was deliberately simple because it helped illustrate the mechanics of the problem... but some readers reasonably questioned whether a portfolio containing one extreme winner, two mediocre performers and one complete failure was representative of how Australians actually invest in shares.

So I decided to test the CGT changes using a portfolio based on actual investor behaviour rather than relying on a hypothetical portfolio. I analysed the 20 most popular ASX shares and ETFs purchased six years ago in April 2020.

Despite analysing a completely different portfolio based on actual investor behaviour, I arrived at a similar conclusion. The proposed indexation model increased taxable gains by ~82%.

The government's stated aim is to improve fairness and encourage investment into housing. But if the practical effect is to penalise diversified investors and significantly increase tax on ordinary Australians who invest patiently over decades, the reforms risk creating distortions far greater than those they seek to address.

Policymakers should carefully consider whether a tax system that increases tax for a typical long term investor by more than 80% is really achieving its intended objective.

A related question is why any rational investor would choose to invest in direct shares at all under this regime? If successful portfolios are taxed much more heavily and unsuccessful ones receive less recognition for their losses, the after tax risk adjusted return from direct share investing becomes highly unattractive.

Full analysis is here: https://t.co/hc5vRfz4un

[GenX Aussie Matty @MattyGenX]

@TMFScottP The private sector does not get matching rises

[GenX Aussie Matty @MattyGenX]

@David_McMahon75 Not very good for attracting venture capital, which was already not great compared to America.