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Fact sheet

Fact Check: Do two-thirds of negative gearers have a taxable income under $80,000?

Income tax Liberal Party of Australia Negative gearing

Treasurer Josh Frydenberg claims that two-thirds of people who use negative gearing have a taxable income of less than $80,000 a year. But Mr Frydenberg's claim is misleading. Experts contacted by RMIT ABC Fact Check took issue with his use of taxable income to define wealth, due to the very nature of negative gearing, which is a tax deduction that reduces taxable income. They suggested removing the effects of negative gearing from a person's total income and applying a threshold to that figure. On this measure, only 52.3 per cent of negative gearers have an income below $80,000. This is out of proportion with the number of taxpayers below this level ' 76.4 per cent of all taxpayers have an income below $80,000. Conversely, 23.6 per cent of taxpayers have an income above this level, but they account for 47.7 per cent of all negative gearers. So those on an income below $80,000 are much lower users of negative gearing than those on an income above it. And as the income threshold is raised, the proportion of taxpayers above it who negatively gear in comparison with the proportion of taxpayers gets larger, indicating that people with higher incomes are more prolific users of negative gearing.
Verdict: Misleading

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