Negative Gearing needs to be addressed

In the midst of the American financial crisis, Australia seems to be doing ok, touch wood.

Finally addressing issues of executive pay and golden parachutes is good to see and should of happened a long time ago.

One of the untouchable policies over the last few decades is Negative Gearing.

Deduction of negative gearing losses on property against income from other sources for the purpose of reducing income tax is illegal in the vast majority of countries, the exceptions being Canada, Australia, and New Zealand. - Wikipedia

Negative gearing sucks IMHO but a lot of people are deeply committed financially to this. It's middle class welfare and market distorting...

I want to see it gradually rolled back, it shouldn't be so hard. Housing should not be the investment industry it is today, make your money investing and creating jobs.

How do we address this? It's pretty simple. People should only be allowed to negatively gear one property. But we can't just change this over night.

I propose to kick this of by capping it, starting next financial year at 5 properties, reducing by one each financial year, ending up at only one negatively geared property per person in 6 years time.

What do people think?