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Retirees Tax

Discussion in 'General Chat' started by Iggy_Pop, Mar 8, 2019.

  1. Iggy_Pop

    Iggy_Pop

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    bill21.jpg
     
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  2. Iggy_Pop

    Iggy_Pop

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    Bill Shortens proposed franking credit changes are a cruel policy targeting elderly people with limited opportunity to work again to replace the income, as well as being challenged with higher health costs due to aging and potential large contribution requirements to enter an aged care facility.

    Definitely NOT a fairer system
     
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  3. Logique

    Logique Investor

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  4. chiff

    chiff

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    There are plenty of other opportunities to prosper in retirement other than franking credits.A lot of this unfair scenario has been sponsored by the LICs.If you cannot get well over five percent from alternative investments people are not trying ie bonds reits etc. I have made moves in that direction,however I think that the most likely result will be a cap on franking credits-something like a 10k maximum or less.
    As has been said to get 25k in franking credits you need one million in shares.
    I believe current retirees have lived through the best of it.I don't think any of them lost their penalty rates.
     
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  5. Logique

    Logique Investor

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    That's your answer is it? Nanna should sell her blue chips, and take her chances on the high street.

    You forgot to mention going onto the aged pension. Where's the saving then
     
  6. IFocus

    IFocus You are arguing with a Galah

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    Its privileged welfare, money for nothing franking credits paid out on no tax profit, double dipping, it means anyone getting (me) are no longer self funded they (me) are getting a cash hand out from the government $5 bil worth for nothing talk about socialism.
     
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  7. willy1111

    willy1111

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    Bollocks.

    What we have now is a progressive tax system, the more a tax payer earns the more they are taxed.

    What is proposed is a minimum 30% tax on income from dividends. They are specifically proposing to tax income from dividends more than any other income source.
     
  8. IFocus

    IFocus You are arguing with a Galah

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    Over 60 in a SMSF income is tax free plus you want a franked div payout

    Bollocks to you x 2
     
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  9. Smurf1976

    Smurf1976

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    I'd be more than happy to see franking credits reduced or removed if, and only if, it applied to everyone.

    What Labor proposes removes the value of franking credits for anyone with a low income whilst retaining full value for high income earners.

    So someone who retired at say age 56, after working the past 40 years in manual labour jobs on modest pay, gets hit fairly hard meanwhile it's smooth sailing for those on above average incomes who are completely unaffected by Labor's policy.

    To say that's wrong is an understatement. :2twocents
     
  10. IFocus

    IFocus You are arguing with a Galah

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    Its removed for those that don't pay tax if you pay tax the offset remains also pensions (low income) are not affected
     
  11. Smurf1976

    Smurf1976

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    Which makes it even more ridiculous since the very concept of a franked dividend is that you, as part owner of a company, have indeed paid tax at a rate of 30%.

    So if someone's only source of income is dividends then they pay 30% tax.

    If they also claim welfare then they'll pay less tax on the dividends.

    That makes sense because?

    My view is that the entire taxation system need an overhaul and major simplification rather than endless "patches" like this one which always have the same effect of closing one distortion and opening up another loophole somewhere else.
     
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  12. IFocus

    IFocus You are arguing with a Galah

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    Tax is payed on profits from income your income not the company's your income.


    If you are not paying tax on your own income how can you then claim a rebate on another entity's income?
     
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  13. sptrawler

    sptrawler

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    Therefore if someone is on $250k, why do they get the franking credit deducted from their tax payable?

    Because the Government, made superannuation in the pension phase a tax free vehicle, if they wish to change that fine. But as it is, they are saying it is only tax free, when we say it is.
    Like I said earlier, bring in tax scales for super earnings, so as the earnings increase the franking credit is nullified, what they are doing is making super in the pension phase taxable. They can put lipstick on the pig, but it is still a pig.
    Or on the other hand make it so all super funds lose the franking credits, for those who are in the pension phase, the onus would be on the funds to supply the details.
     
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  14. Smurf1976

    Smurf1976

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    Labor's view is that the company's income is your income so long as your income is high enough.

    It's the inconsistency of their policy which is the issue here.
     
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  15. chiff

    chiff

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    The alternative investments are safer than share investing....What I have not seen yet is anyone printing exactly how much they earn in retirement.People complain but never show their hands...I fear that is because they are doing very well indeed.I figure most retirees try to keep their nest egg intact and never dip into their capital.My MP said ,with only what people told her,that people have built their retirement plans around franking credits.I think that is stupid and ill-advised,if it is true.
     
  16. HelloU

    HelloU

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    pretty much all the figures u want are available from commonwealth govt websites ....... they may be a couple of years behind the times due to things such as tax return cut-off dates but the figures are available.
    Also, one must keep up with current laws - such as the $1.6M super cap, that makes all the old credit refund figures no longer applicable to the argument.
     
  17. HelloU

    HelloU

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    what i mean is that the true super franking refund figures that apply right now are not available yet - so any figures being thrown about are historical (and not applicable because the law was different for those figures)
     
  18. HelloU

    HelloU

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    franking credits are currently included as part of the income test to get welfare because if u r a low income earner u currently get to keep the credits..........

    In the future, if the credits are retained by the ATO and not returned to individual tax payers, it is difficult to see how these peeps will not get welfare top-ups to make up for the missing money from their pockets (and changes to tax tables like sapto etc to make up the missing money).
     
  19. Smurf1976

    Smurf1976

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    Suppose that I am employed full time and that I also own shares in whatever companies which pay franked dividends, let's call them "xyz" for simplicity.

    Under present laws and Labor's proposal my income from employment + dividends from xyz are added together in order to determine my taxable income. I then pay Income Tax on this amount. If the company has paid Company Tax then I will receive a 100% refund of this amount.

    Should I leave the workforce at age 54, for whatever reasons be they planned or unplanned, Labor proposes that the shares will now be treated differently and are no longer my income subject to Income Tax but are now subject to Company Tax instead.

    Why?

    Either the shares are my income or they are not.

    If they are my income then Income Tax should apply.

    If they are not my income then Company Tax should apply.

    Whether or not I also have a job should not change whether or not dividends from the shares are part of my income. Either they are or they aren't. :2twocents
     
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  20. willy1111

    willy1111

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    Ain't got nothing to do with franking and all to do with how Super is taxed.
     
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