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Superannuation, the ultimate government cash cow?

Discussion in 'Business, Investment and Economics' started by drsmith, Apr 20, 2012.

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  1. Smurf1976

    Smurf1976

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    Only for low income earners though and that's the real point of the whole debate.

    If you're on a high income then you still get full value from your franking credits. It's only lower income earners who are being targeted with this - government will take the money for these people only.

    Labor have forgotten who they're representing it seems. Since when was the ALP the rich man's party? In 2019 that's exactly what it seems to have become. :thumbsdown:
     
  2. Humid

    Humid

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    They’re only getting taxed once
     
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  3. Toyota Lexcen

    Toyota Lexcen

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    Who?
     
  4. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    BHP pay 30% tax.
    I for instance get a dividend on a 43% tax rate (due to my earnings), so rather than being taxed twice I pay effectively (after the franking credit) 13% tax rate on the shares.

    As I said, I don't see why the government, (and no other government in the world does this) would tax BHP 30% and then give it to shareholders on no income, e.g. that guy Wilson who's running the website to click who earns (no gets) $2 million in franking credits. Ridiculous.

    And that argument about Labor helping the working man etc. doesn't wash. Howard brought this in to help his mates. Keating brought in the into double tax franking. The savings are in the billions and could be used to give tax cuts to all and pension rises. Of course a few very rich individuals will lose heaps.

    The trouble is as Machiavelli said, taking away something no matter how reasonable will give you hate from the ones you remove the perk from and only lukewarm approval from the others who aren't effected.
     
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  5. Smurf1976

    Smurf1976

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    Then why don't we just move to a minimum 30% tax on all income?

    If it's good enough for one group of people to be taxed that way then there's no reason to not hit all low income earners with the same level of tax.:2twocents
     
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  6. Humid

    Humid

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    I notice you no longer use the term taxpayers
     
  7. Humid

    Humid

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    Reminds me of global warming to climate change
     
  8. sptrawler

    sptrawler

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    Why not just put the top tax rate back up to 60cents, like it was when I started working?
     
  9. Smurf1976

    Smurf1976

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    Or just make those who should be on the top rate actually pay it. Close the loopholes.

    Same with companies. If a certain company isn’t making any profit extracting gas or selling phones then they should have no objection to nationalisation of the gas fields or the IP relating to the phones for a token payment of $1. They’re perpetually unprofitable after all so the companies concerned should be glad to be rid of such “assets”.

    Government would only need to carry out the threat once and we’d see a flood of tax revenue in no time once business worked out that no tax paid = risk of nationalisation and there’s no valid argument that the assets have value given the company itself has declared them unprofitable.
     
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  10. sptrawler

    sptrawler

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    You are getting income from two sources, you are paying tax on the income you earn from your employer and you are getting tax back from income you are earning from your investments.

    I bought shares to support myself when I stopped work, so I am getting income from one source, and it is paying tax on my behalf, and as I'm supporting myself the Government said all my income is free of tax.

    Therefore why are they keeping the tax, the company has paid on my behalf, and giving yours back to you?

    If the Government wants to keep that tax, they have to change the tax status of super funds, to taxable.

    What's even sillier is, if I get free money from the Government as welfare, I can keep the tax as well. FFS how stupid is that.:eek:
     
    Last edited: Feb 14, 2019
  11. Smurf1976

    Smurf1976

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    Why are you not paying 43%, your marginal income rate, on the BHP dividend after Company Tax has been paid?

    Why are you, as someone with an above average income, allowed to consider BHP’s payment of Company Tax as a form of taxation paid by yourself but someone with a low or no other income can not use the exact same same argument?

    Either a company having paid Company Tax counts as part of an individual’s Income Tax payment or it doesn’t.

    If there were to be any concessions on that then I’d expect them to be for low incomes not high. That’s the aspect which really gets to me.
     
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  12. sptrawler

    sptrawler

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    What I can't understand smurf, is how people don't get it.
    If super in pension phase is tax free, then either the dividend gets paid pre tax, or the tax is refunded.

    Otherwise the super pension isn't tax free, it is being taxed at company tax rates, where dividends are concerned.
    How these people invest is beyond me.
     
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  13. Smurf1976

    Smurf1976

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    My thoughts there are more concerning than the issue itself.

    Politics seems to have become something much like tech companies particularly Apple and Tesla.

    If you love Apple then in your mind everything they do is pure genius. If you're not an Apple fan then it's all pretty crap compared to whatever alternative.

    Same with Tesla. If you're in the Tesla camp then everything they touch is worth more than gold. If you're not a Tesla fan then it's all a load of nonsense.

    In both cases there's no critical thinking involved. You're on one side or the other about a particular product before it has even been unveiled. If you're an Apple fan then by default all their products are good.

    Politics seems to have gone the same way. If you're planning to vote Labor then this policy is just fine and anyone saying otherwise must be a Coalition supporter who is also a climate change denier, wants to scrap penalty rates and so on.

    So my perception is certainly that there is very little critical thinking being applied to this debate (I mean that generally not specifically discussion on ASF). That numbers and finance, both of which are subjects the masses seem to struggle with, are central to the issue makes it even worse than it would otherwise be.:2twocents
     
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  14. cynic

    cynic

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    Shareholders are, in effect, part owners of a business. To tax franked dividends, whilst at the same time denying those taxed, their franking credit, is tantamount to the taxman double dipping.

    Those proposing and/or supporting the proposed legislative change, seem to have overlooked the likely reaction to such changes.

    Does one truly expect, that those impacted ,won't rearrange their affairs (in respect to superannuation investment allocations) and/or company policies/practices (in respect to the franking of dividends)?
     
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  15. Zaxon

    Zaxon The voice of reason

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    I agree. There are clearly people in this debate that sing from their party's hymn sheet, and show no sign of independent thinking. Personally, I am a swing voter. I evaluate every policy on its merit, not on which party it's coming from.
     
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  16. Smurf1976

    Smurf1976

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    My political leanings are more toward Labor than the Coalition in recent times but I'm having doubts now with this policy. That's not due to any personal implications but because it shows a government that's incredibly arrogant in being willing to trample over a minority. That's a real worry given they haven't even been elected to government yet and are simply assuming they're a sure thing. :2twocents
     
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  17. qldfrog

    qldfrog

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    There is polarisation as Smurf noted, probably due to social media and confirmation bias, and a dumming of the population worsened by pathetic media be they abc, guardian or fox.
    Australians in general have really no clues on the world we are living in.
    Technically, geopolitically..
    This is on the left side or even worse our far left greens, demonstrated by the illegal migrants positions, the arrogance in thinking we and our 26millions can play a role in CC or limiting China's role in the region.
    NDIS financing on debt,etc
    A population who has no trouble with marginal income tax rate at nearly 50pc for the "rich"
    On the right side, some Abbot's like positions and blind trust in a string of actual monopoly or duopoly businesses screwing us every day, and the same ignorance with f.e. migration for the sake of gdp at the cost of our own nation future and present quality of life.
    That disaster waiting to happen could be avoided if the voters had some clues, but with mandatory voting on the top..i lost hope..
    Only with serious pain will this country learn and maybe wake up.
    Current labour will speed the way in my opinion
    But that is ok, i am just an arrogant brat...
     
  18. Bill M

    Bill M Self Funded Retiree

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    What are the effects of Labors new franking credits policy on those in super funds where you can pick your own shares? For example, you are in an Industry fund that allows you to choose your own shares in the self invest option. You buy an ETF that currently pays quarterly dividends and you also get the franking credits rebated. It is a pension fund.

    Will you get the franking credits or will you lose them? It is still an industry fund after all, just wondering as this hasn't been highlighted or debated anywhere??
     
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  19. Zaxon

    Zaxon The voice of reason

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    Your tax rate is 15% or 0%, depending on whether you're retire. My understanding is that because it's within an industry super fund, imputation credits would be refunded as per now. Whether that's from direct share investment, ETF, or a fund such as "balanced super", it will still protected by the umbrella of the super fund.
     
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  20. Bill M

    Bill M Self Funded Retiree

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    I find this schamozal of franking credits very discriminatory.

    Why is someone in a super fund using self invest (buying their own stocks) entitled to franking credit rebates, whilst the person in a SMSF buying the exact shares is not entitled to it? Will the supporters of this dumb policy please explain why one person gets it and the other doesn't?
     
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