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Labor's proposed franking credit changes

Discussion in 'Business, Investment and Economics' started by shortentaxlosers.com.au, Mar 20, 2019.

  1. shortentaxlosers.com.au

    shortentaxlosers.com.au

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    shortentaxlosers.com.au All explained. It's not just a retiree tax. 8.1 million people will lose franking credit cash refunds.

    People under $37k 10.500,000
    Less exempt pensioners -3,500,000
    583,000 SMSF Accumulation mode 583,000
    517,000 SMSF Pension mode 517,000
    Total losers 8,100,000

    Industry and retail super funds - most only made 1% return after All Ords increase year ending 30/6/18. These funds are taking 20% in admin fees. Six of Shorten's mates taking $229k-$437k wages in the MTAA Super Fund.

    Capital Gains tax to be 75% on all shares and 75% of property. Did you know that 75% of all your share gains are to be taxed in your next tax return at your marginal rate ? Why buy shares or property ?

    Shorten to bring in Discretionary Trusts 30 % tax before distribution to beneficiaries.
     
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  2. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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    Are you saying Capital Gains tax to be 75% on all shares ?

    OR

    75% of all your share gains are to be taxed ?

    There is a huge conflict between those two narratives :rolleyes:
     
  3. galumay

    galumay learner

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    Do we really need this sort of propoganda on the site?

    (its certainly in the wrong sub-forum)
     
  4. Bill M

    Bill M Self Funded Retiree

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    With all the evidence clearly showing that this is disastrous policy and that self funded retirees on low incomes are affected the most the Labor Party still keeps on repeating the same old BS that it only affects the rich. So very arrogant and so very stupid.

    ---
    "Politics is about choices – and Labor makes no apologies for choosing schools and hospitals over tax concessions that overwhelmingly benefit the wealthy," Mr Bowen said.
    https://www.smh.com.au/business/ban...o-beat-labor-on-franking-20190318-p5156d.html
    ---

    It is a deal clincher for me, I will not even consider voting Labor as long as this is on the table.
     
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  5. Junior

    Junior

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    This is sensationalist trash.

    8,100,000 is the total number of individuals on a low tax rate, who could theoretically buy shares and claim a small tax refund, if they chose to. The number who actually employ that strategy is a small minority of that number.

    And don't get me started on 20% admin fees......you've looked at the return on the Australian share market for ONE YEAR, which happened to be a poor year. The vast majority of super funds are invested across global shares and property, not just Aus Shares, and have experienced returns averaging around 7% per annum over the past 10 years. Administration fees are around 0.10% for an Industry fund and 0.40% for a retail fund.
     
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  6. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    True.

    Geoff Wilson. Need I say more?

    We are the only country in the world which provides refundable imputation and gives it mostly to the super wealthy who have rigged their super to contain 100s of millions of dollars of shares. I am sure Howard didn't see this happening. Companies should pay their tax and it should go to the Government . Why should tax only come from PAYE taxpayers so Geoff can collect a huge cheque each year..

    The amount of franking credits mostly going to a very few people like him will save $55.7 billion over a decade and which could be better used to fund tax cuts and services and increasing the pension. To give an idea how much this is the Federal Health Budget for running public hospitals is 19.6 billion per year.
     
    Last edited: Mar 20, 2019
    IFocus likes this.
  7. Bill M

    Bill M Self Funded Retiree

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    Yes, you are right. I don't know of any super fund that charges 20% for admin. I wonder if the OP will come back and let us know which funds do this?
     
  8. shortentaxlosers.com.au

    shortentaxlosers.com.au

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    As advised by Shorten, 75% of your gain on shares and property is to be put in your tax return. Tax is to be paid at your marginal rate. Currently it is 50%. Yes it is halving the current discount. Yes, it is increasing the current tax by 50%. Actually, being an accountant, 100% of the gain is put in your tax return, then reduced by 25% in your tax return, if you have held for 12 months, to be totally specific. The point is that most ordinary people don't even know is that 75% of any gains will have to go in your tax return. I have a son who just started at a financial planning firm. I suggested he explain this to all clients.

    I have asked thousands of ordinary people and they don't know 75% of gains will be taxed. Your salary is taxed each week at your marginal rates. So any capital gains will be taxed at your marginal rates, just like your salary. However, share and property gains will be added to your salary so will be taxed at your highest individual rate. This is quite a scary tax and the incentive to invest in shares and property will go down dramatically.

    Also negative gearing on shares and property will be quarantined until you make the final gain on sale. In shares case, this is when your margin loan interest is greater than your dividend income. According to Shorten, you will definately make a final gain on sale. The hide of the man to assume this. Read the mantra https://www.alp.org.au/negativegearing. Shorten says "any losses can be offset against the final gain on sale" Shorten says that only Anaesthetists and Finance managers are the only people negative gearing. Definately not nurses or hairdressers. Please everyone read the policy.
     
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  9. sptrawler

    sptrawler

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    Knobby have you done the sums on the pension, and the effect the franking credit changes will have?

    Take a married couple on a full pension, with $350k in shares getting their franking credits, then compare that with a couple who have $1m in shares and lose their franking credit. Do the sums, rather than regurgitating Shortens crap.

    I'm all for a fair system, but what Shorten is suggesting is plain robbery and a disgrace, that affects middle Australia the most.
     
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  10. HelloU

    HelloU

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    peeps who quote that oz is the only country in the world to treat franking this way rarely then say how other countries deal with company tax ..........

    Some countries do NOT even include dividends paid as taxable income for individuals, ........ other countries do a mix of stuff.

    It is misleading to present the "we are the only ones" argument without balance.

    for balance ......
    proposal will "save" $5B per year
    annual welfare spend is $175B

    some of the peeps that are refused credits will then have to get welfare to survive ...........
     
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  11. sptrawler

    sptrawler

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    Not only that, but not only will the middle class have to pay for the welfare through their working lives, they will have to pay it with their savings in retirement.
    Why the hell, would a working blue collar worker, save at all?
    Typical Labor, rope a dope, policies.
     
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  12. Value Collector

    Value Collector Have courage, and be kind.

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    It’s not just people earning less than $37k that are affected.

    It can affect anyone who’s earnings are subject to an effect tax rate of less than 30%.

    You don’t actually pay more than 30% under our margin rate system until to earn about $150k.

    Some one that earns say $100k in dividends, would be paying less than 30% effective tax rate, and would normally get a refund to bring the tax down to the marginal rate, however under the proposed system they would not get a refund, and be stuck paying 30% tax on their earnings, where as other people earning bank interest or delivering pizzas will only pay the marginal rate.
     
  13. Value Collector

    Value Collector Have courage, and be kind.

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    Companies exist as a conduit through which individuals can pool and invest funds.

    There is no good reason as to why double taxation should exist, eg taxing company profits and then taxing the profits again when they are eventually passed along to the company owners (shareholders).

    The government currently gets to keep the full 30% company tax on retained earnings, and gets the marginal tax rate on that smaller part of earnings that is paid out, seems fair to me.
     
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  14. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    I agree, double taxation is wrong.
    In this case its no taxation. the company pays 30% and the shareholders get it back in full, if they have no earnings or within super.
     
  15. IFocus

    IFocus You are arguing with a Galah

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    OP, Liberal party staffer anyone............
     
  16. Darc Knight

    Darc Knight Investor not Trader

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    Geoff Wilson certainly has links to Libs, remember he was caught pulling strings within the Libs lately.
     
  17. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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    If it is a Liberal stooge then my message is very simple.

    The only way to save your franking credits is to win the election.

    The only way to win the election is save penalty rates for the lowest paid workers in the country.

    ... all 8,100,000 of them :)

    No penalty rates ? No Government. Work it out.
     
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  18. sptrawler

    sptrawler

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    The only way to win the election is, promise more money, it works every time.
     
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  19. sptrawler

    sptrawler

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    So if they remove the franking credits, from the "normal" self funded retiree and they are forced to spend down their balance much quicker. There will be a lot less intergenerational money transfer, from parents to children.
    Then if they increase the CGT on profits by 25% and reduce the negative gearing on investment loans.
    How do you plan to create your nest egg?
    That is of course, unless a person is on a public service indexed pension, which is another taxpayer rort.
    a bit like silly Billy, who wont need franking credits, because he will be on a $200k+ tax free indexed tax funded pension as soon as he leaves parliament. But that's fair, of course it is, he can poke his finger at the little guy.:roflmao:
     
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  20. Junior

    Junior

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    They are trying to say that the Aus Share Market achieved a 1% return last year, and so the administration fees consume 20% of that 1%.....a bit ridiculous. How do you do the maths when there's a negative return?
     
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