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Maintain the current dividend imputation system

Discussion in 'Business, Investment and Economics' started by willy1111, Oct 5, 2018.

  1. Smurf1976

    Smurf1976

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    As a broad concept that makes a lot of sense.

    It also reduces the incentive to find ways around it if the tax rates are modest.
     
  2. HelloAgain

    HelloAgain

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    Lower taxes with a broader base makes more sense except to politicians who need taxes to manipulate votes. The “tampon tax” exemption argument should have demonstrated why it isn’t fair to have any exemptions but nine of them were brave enough to say that!
     
    Last edited: Oct 8, 2018
  3. basilio

    basilio

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    Detailed analysis in ABC on the issue of Labour reducing dividend imputation . The Coalition is saying that 84% of people affected by the proposal have a taxable income less than $37k. But what does that actually mean ?

    For example consider this scenario which is probably close to those who have done well in their working life.
    In a recent submission to a House of Representatives Inquiry, the Grattan Institute gave the following example.

    "Take the example of a self-funded retiree couple with a $3.2 million super balance, plus their own home, and $200,000 in Australian shares held outside super. Even drawing $130,000 a year in superannuation income, and $15,000 a year in dividend income, they would report a combined taxable income of just $15,000 and pay no income tax whatsoever."

    Will Labor's dividend imputation policy overwhelmingly affect the low paid?
    https://www.abc.net.au/news/2019-01-30/fact-check-labors-dividend-imputation-policy/10626204
     
  4. sptrawler

    sptrawler

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    It will certainly be interesting, I wont get into a debate about it or the NG or the CGT any more, because it has all become too emotional IMO.
    I will say, I think the outcome wont be what people think, and we will be discussing it a lot more in three years time.IMO
    The Grattan institute, is like asking for an unbiased opinion, from Getup.IMO
     
    Toyota Lexcen likes this.
  5. Toyota Lexcen

    Toyota Lexcen

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    i feel super is complicating this debate.

    what about the individuals in that report that are outside of the super structure, it is significant

    they get the refund because they are low income earners

    why should they not get the refund, its double dipping, taking from one member of the community and handing it to the scabs who live on welfare, community housing, DSP fraudsters etc
     
  6. sptrawler

    sptrawler

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    My personal belief is the suggested changes won't affect the 'rich' at all, they hold their assetts in trusts and other vehicles and structures.

    The only people who will be caught with all this, is the working lower middle and middle class, that make up the majority.

    The rich will get richer, the poor will stay as they are, and the middle class will slide. IMO

    Like I said about 4 years ago, this is all about bringing a level playing field, with our contemporaries(U.K, U.S, Canada, NZ, Western Europe). Our lower middle and middle class, has been getting far too affluent, too much inter generational wealth transfer, too many wanting to do less and less, too many plebs living the life of the rich and famous.:roflmao:

    In these tough times, how many 'normal' people do you see on cruises out of Sydney?
    No I think it is all going to be reigned in, and I know just the man to do it.:xyxthumbs
    Just my opinion, time will tell, really do hope I'm proved wrong.
    If I'm not, well it's been a great ride.;)
     
    willy1111 likes this.
  7. kahuna1

    kahuna1

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    hi,

    I think the idea is stupid. Why not stop Microsoft booking 100% of sales into Singapore then into Bermuda and paying instead of 30% tax on the 600 million NET profit it pays UNDER 20% of it. Same for Goldman Sachs same for Goggle same for Apple and they are worst of all so too a long list of others.

    If i went to centrlink in 200 places under 10 names and got the dole ... stealing 25 million I would expect 10 years in jail. These FLuxerers ... steal around 15 billion each year. Again this is changing as the Tax office has had enough .... of the evasion and avoidance and it got a big chunk then they just altered the structures and went off on their merry way.

    Its going to happen either way, collecting this tax, rather than taking it from LOW income ... MEANS test the frigging thing .... Under 50k net income you get the credits. Now that may be smart, but ... well it is what it is. Of course ways around it and just change the asset mix and a few other teaks will minimize the impact ... but with a lot of work.

    Just my opinion of course, for what its worth ... nothing.

    Cheers
     
  8. basilio

    basilio

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    Another view on how the current dividend imputation rebate scheme is working

    Taxpayers should not be subsidising lifestyle of wealthy retirees


    .....The various tax concessions in the superannuation system allow high-income earners to build up very large super balances. Those with the means can sacrifice part of their income to put extra money into superannuation, tax free. Many high-income earners operate their superannuation funds as vehicles to minimise tax and build up large capital savings.

    As a result of such incentives, the aim of wealthy retirees is to live off the earnings of the dividends from their self-managed super funds, but not to draw down on the capital by selling any shares.

    Because your superannuation sits outside your will when you die, superannuation is used as a key part of estate planning by the wealthy – that is, saving a lot of money to pass on to your children as an inheritance. As Australia does not have death duties, this wealth is passed down tax free.

    This leads to significant intergenerational wealth transfer and, ultimately, reduces social mobility and exacerbates economic inequality.

    The current imputation cash refund system is, essentially, a reverse death duty: low and middle-income earners are subsidising the estates of the very wealthy by giving them cash payments from general revenue – that is, from all taxpayers’ contributions to the federal budget – so they don’t have to draw down on their own savings but can hoard that money for their own kids.

    It’s both unfair and, at an annual cost of more than $5billion in forgone revenue annually, unsustainable.

    https://www.canberratimes.com.au/bu...tyle-of-wealthy-retirees-20190206-p50w1u.html
     
  9. sptrawler

    sptrawler

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    Just another load of BS, that gets pedelled to the ill informed, which they regurgitate with gay abandon.

    FACT: Only superannuation which has been put in after tax, is passed on tax free.

    The taxable component, which in the majority of cases is the major amount in super, is taxed at 15% + medicare levy before it is given as an inheritance.

    These morons shouldn't be allowed to print $hit, they obviously know nothing about, it is as bad as the people blindly believing it and regurgitating it.:mad:

    The only good thing to come out of this will be, those who believe the labor crap will end up with nothing, which they will deserve. IMO
    How people can make an informed decision, when they don't even inform themselves, is beyond me.
     
  10. HelloU

    HelloU

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    annual spend:
    welfare $175B
    Defence $32
    whatever above was $5B


    what else
    there is tax on super when u r dead ..............
    there is a cap of super balance
    there is a limit on money going in
    there is a mandated annual drawdown

    if peeps do not understand what happens in 2019 in Australia then the value of what they contribute to any discussion about changes to the current law is essentially worthless.
     
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  11. Junior

    Junior

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    Perhaps we should introduce Death Taxes too? Shorten really has managed to brainwash many people into thinking that paying MORE tax is a good thing. Although I suspect that supporters of tax hikes, are not those who would personally have to pay those taxes.

    Just remember, you will retire one day too, and after 40 odd years of giving away 30% - 40% of your salary to the Government every year you will now have no salary, and may not be excited by the prospect of continuing to pay high rates of tax. Furthermore, you might not want the Government to receive a windfall of your hard-earned savings when you die.
     
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  12. sptrawler

    sptrawler

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    No franking credit, for the lower income spouse.
    Increase in capital gain tax.
    No negative gearing a low cost rental.

    Junior your a finacial advisor, you tell me which working group, this is going to hit most?
     
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  13. SirRumpole

    SirRumpole

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    15% tax on super contributions, tax free in pension stage, the hoohah over franking rebates really smacks of children having a lolly taken away from them before they get fed their dinner.
     
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  14. sptrawler

    sptrawler

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    I would rather they taxed the pension, than change the franking credit system, it doesn't just effect pensioners. like I said earlier, there isn't many ways for a blue collar worker to get ahead, these changes are closing all the avenues. It will end up a drop in living standards, for the working class. IMO
    Your no fool Rumpy, think about the longer term ramifications.
    Just introduce a progressive tax on super pensions, or if they are worried about intergenerational wealth transfer, bring in death duties.
    Just my opinion and I'm not being selfish, regardless of what people believe.
     
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  15. HelloU

    HelloU

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    a low income worker (like someone that scrubs toilets 3 days a week) and has some CBA shares might get a refund from the ATO of $600.

    that person will NOT get that $600 under labor. they will lose $600 'income' from their pocket when old mate up the road on $400K pa does NOT LOSE ONE CENT.

    if peeps do not understand what happens in 2019 in Australia then the value of what they contribute to any discussion about changes to the current law is essentially worthless.
     
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  16. basilio

    basilio

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    Can you please expand and explain how that works?
    Thx
     
  17. SirRumpole

    SirRumpole

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    Yes, I agree with that, but overall superannuants (including me) are on a good deal tax wise.

    Beats me why they decided to go after franking rebates instead of progressive taxes, maybe because it's something that very few people understand and they thought it would slip under the radar.
     
  18. HelloU

    HelloU

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    sure, happy to help the discussion with actuals ....
    you decide what sort of 'income person' you are interested in (need both paye income figure and a dividend figure) and i will calculate what happens for them .....

    pick up to 3 examples if u like.
     
  19. basilio

    basilio

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    HelloU your example is the one I am interested in understanding. Specifically the statement that a low income worker with some CBA shares yielding $600 a year rebate would not get a rebate under Labour.

    Lets say for argument sake he/she is making $50k a year.
     
  20. HelloU

    HelloU

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    again, what peeps should know is that low income peeps with franked dividends will have money taken out of their pockets whilst old mate up the road on $400K pa does NOT LOSE ONE CENT.

    i do think that low income peeps deserve to lose one cent from their pockets.

    a policy that takes money from the pockets of low income peeps, and does not touch high income workers, is BAD POLICY for australia.

    (for basilio, a person on $50K paye pays approx $8800 in tax (ignore offsets) .......... not sure if that helps anyone ....people that got a credit refund of $600 will lose that $600 refund under labor, if you got a credit refund of $100, you will lose that $100 refund, if you got a credit refund of $900, you will lose that $900 refund - the pattern remains the same, if you used to get a franking credit refund then labor will keep that money and NOT REFUND it - whatever amount it is. that is what the policy is designed to do. If you cannot work out the figure for a particular person then give me the numbers for that person and i can calculate the figures for you)
     
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