# Why are they reducing super limits?



## sptrawler (15 June 2011)

I have my own ideas on this.
But why do you think this government is cutting back what people can contribute?


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## So_Cynical (15 June 2011)

sptrawler said:


> I have my own ideas on this.
> But why do you think this government is cutting back what people can contribute?




Ill take a wild guess.

Because rich people have been taking advantage of the generous tax concessions for many years and by greatly reducing the contribution limits the Govt hopes to levels the playing field somewhat and help the people who need it the most....not greedy rich people who have too much money anyway?

That's my take on it.

Personally im just about to start some serious salary sacrifice and in about 5 to 7 years may come close to being able to afford reaching half the new limit...if im lucky....very very lucky.


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## jbocker (16 June 2011)

Ok I may have been under a rock but whats this about reducing limits? Is this different to the plan that was put in place a few years back.. where they progressively reduced the limits for a few years and were then (I think) going to increase them again. (Why they were doing this I dont know). 

My understanding was; it is still 25K and 50K for over 50s.
Please correct me if I am wrong.

cheers


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## Junior (16 June 2011)

jbocker said:


> Ok I may have been under a rock but whats this about reducing limits? Is this different to the plan that was put in place a few years back.. where they progressively reduced the limits for a few years and were then (I think) going to increase them again. (Why they were doing this I dont know).
> 
> My understanding was; it is still 25K and 50K for over 50s.
> Please correct me if I am wrong.
> ...




After 1/7/2012 the $50k limit for over 50s only applies for those who have a superannuation balance of less than $500,000.

This change opens up a new strategy for some couples, whereby you should direct contributions to the spouse with the lower super balance, to ensure the $50k concessional contributions cap is still accessible.


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## jbocker (16 June 2011)

Junior said:


> After 1/7/2012 the $50k limit for over 50s only applies for those who have a superannuation balance of less than $500,000.
> 
> This change opens up a new strategy for some couples, whereby you should direct contributions to the spouse with the lower super balance, to ensure the $50k concessional contributions cap is still accessible.




Thanks Junior

So that I dont too many questions - where is a good site for the facts? The over 50 limit you say has been reduced, can you tell me to what, I think I may already have the 500K limit.


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## Junior (17 June 2011)

jbocker said:


> Thanks Junior
> 
> So that I dont too many questions - where is a good site for the facts? The over 50 limit you say has been reduced, can you tell me to what, I think I may already have the 500K limit.




With regards to the $500k super limit for $50k cap from 1st July 2012, this is only an election promise at this stage, hasn't been passed as legislation.

The normal cap is $25k for concessional contributions, this is indexed but only increases in $5k increments.

Not sure about a good website..I'm in Fin. Services so have the textbooks here at my desk!


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## sptrawler (17 June 2011)

With a universal concessional cap of $25,000 when your super total is equal or greater than $500,000, means you in effect are being pegged to inflation i.e 5%.
So how do workers become self funded retirees when the labor government is basically removing concessions. At a level that what would be considered the lower end of what is required for a modest retirement.
I suppose it is one way of keeping the " Baby Boomers" in the workforce for as long as possible.
It is a shame they don't puts some constraints on their own benefits.. Oh I forgot life doesn't have to be fair


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## Judd (17 June 2011)

The fine print is going to be interesting. Does the $500k kick in at the beginning or end of the financial year or is it to apply at any time during the financial year?

Bloody tough if you are at $500,001 but ecstatic at $499,999.  Always the trouble with arbitrary and artificial limits.

Anyway, given the circles I move in, I don't know too many with $500k in their super or $25,000, let alone $50,000, to put into super each year.  Nevertheless, I do get the feeling that in order to "get at" the very few, ideology may have shafted many and the ramifications in future years could get rather messy.


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## sptrawler (17 June 2011)

Judd said:


> The fine print is going to be interesting. Does the $500k kick in at the beginning or end of the financial year or is it to apply at any time during the financial year?
> 
> Bloody tough if you are at $500,001 but ecstatic at $499,999.  Always the trouble with arbitrary and artificial limits.
> 
> Anyway, given the circles I move in, I don't know too many with $500k in their super or $25,000, let alone $50,000, to put into super each year.  Nevertheless, I do get the feeling that in order to "get at" the very few, ideology may have shafted many and the ramifications in future years could get rather messy.




I suppose the the thing is $500,000 invested at 5% is $25,000 a year income, which would be a very modest income for a married couple. They would definately be relying on government pension top up( which the government is trying to avoid)
If the husband earns say $85,000 and the wife earns $35,000 and because they have been trying hard to save for their retirement, they live on her salary. That allows them to salary sacrifice $50,000 of his wage into super, because of the $150,000 he had in super prior to 50 he can only contribute $50,000 for 7 years. Even though his wife only has $50,000 in super he can't salary sacrifice the $50,000 to get her total up


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## sptrawler (17 June 2011)

Actually just had another thought( most unusual). 
If the assett limit for a single pensioner is approx $450,000 and the limit approx $850,000for a married couple when the pension elegibility cuts out.
Why would you be putting limits in place to stop "Mr and Mrs average getting there.
I doubt very much, it is because they are desperate to pay pensions, so therefore what are they thinking of.


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## Julia (17 June 2011)

sptrawler said:


> If the assett limit for a single pensioner is approx $450,000 and the limit approx $850,000for a married couple when the pension elegibility cuts out.



Where are you getting these figures from?
The current assets test for part pension is $668,000 for single home owners and $991,000 for couple home owner.


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## sptrawler (17 June 2011)

Julia said:


> Where are you getting these figures from?
> The current assets test for part pension is $668,000 for single home owners and $991,000 for couple home owner.




Hi Julia, I was only going off memory the last time I looked them up, which was obviously quite a while ago.
However that reinforces the point I was making, why make it difficult for people to reach the level where the pension cuts out.
Aren't they supposed to be encouraging people to become self funded and less dependant on the pension? Especialy with the baby boomers comming through?
There is probably a really simple reason that I am missing.


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## sptrawler (17 June 2011)

Julia said:


> Where are you getting these figures from?
> The current assets test for part pension is $668,000 for single home owners and $991,000 for couple home owner.




To further the discussion, using your numbers Julia, why wouldn't the government be encouraging singles to get $700,000 in super and couples to get $1000,000 in. 
Doesn't make any sense to me,that they are saying you can only salary sacrifice $25,000 when you have $500,000 in super if you are single or married. 
*Why wouldn't they say *you are limited salary sacrificing  $25,000 if you are single and have $700,000 or a couple with $1000,000 in super?

(I know these figures are for home owners, don't know the figures for non home owners and am trying to keep it simple).


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## Julia (18 June 2011)

I don't know the answer to your question, sp, but could it be that if salary is contributed to Super this is non-taxable, in contrast to the government receiving tax on that amount if it's not?


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## sptrawler (18 June 2011)

Julia said:


> I don't know the answer to your question, sp, but could it be that if salary is contributed to Super this is non-taxable, in contrast to the government receiving tax on that amount if it's not?




Salary sacrificed into super attracts a tax of 15%, that's why it isn't worth sacrificing if you are in the 15% tax bracket.
The problem is with the current arrangements. The wealthy can place $150,000 a year of after tax money into super. The politicians get all their super tax free and guess what " joe average" gets all sorts of problems trying to get enough into super to give him/her a reasonable chance of becoming self funded.
There has to be a reason for it and the only one I can think of is this government doesn't want the workers to retire.
If this wasn't the case the limits wouldn't be set so low when compared to the pension eligibility levels.


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## tech/a (19 June 2011)

In short
The Govt wants it both ways
1 to gain as max tax as possible
2 to minimize pension payments

There so damned dumb they won't achieve either efficiently.

My advice to anyone is
Make provisions for yourself and MAKE SURE you create passive income which will see you way beyond your natural life span.

If YOU take control of your future then you won't need to concern yourself with any of this rubbish.

Now the best way to do this is serve a term as a ploy!
Super indexed to inflation for life.---- sweet!


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## Crom (19 June 2011)

This pathetic Gov't has always and continues to transfer monies from buisiness and traditional income demographics that do not vote ALP, to demographics (lower income), that do vote ALP.

The piss it up the wall stimulus spending.  

Carbon tax- a direct wealth transfer to lower income demographics.

Minerals tax- direct transfers to lower income super etc

AND, this stupid limit on people over 5o who have over 500,000.  The ALP knows that the people who vote for them won't have that much super so who cares.  AND, they get the extra tax from higher income earners who don't now get that additional $25,000 at 15% tax by putting it in their super.

I am just 51, and run my own buisiness.  It is just me, and I work 7 days and nights a week, and have had two holidays in the past 15 years (both less than 3 weeks in duration).  Yes I do make good money, but if I divided my income by the amount of hours my actual pay rate is not that flash.  I have invested in super and despite financial crisis and ALP polices creating sovereign doubts overseas now re this great country of ours, I do have over $500,000 in super.

I consider myself an average Aussie.  Not rich but able to support myself.  I know I will not get a pension, and want to be able to accumulate money in super so I can retire comfortably after working my **** off.

To only allow me to put $25,000 into super when I will not get a pension, is just unfair and panders totally to the ALP's demographic.  Is this a Gov't (and I use the term very loosely), for all Aussies or just those who vote ALP.

The bottom line is the super fund cutoff at $500,000 is ridiculous.  It is sold by the ALP to it's voting demographic as some massive amount, and bring fire brands and nooses and string up these wealthy bastards!

To be able to invest a mere $50,000 a year when you work hard, and gain a tax concession, when you will never recieve any bloody benefits when you retire, is surely no great deal.  High income earners still pay high tax on the rest of their income.

By the way, if you have not guessed, I do not vote ALP and think that anyone who does needs to seriously start putting this great country of ours first rather than just voting as if supporting a traditional sporting team.

Crom


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## Julia (19 June 2011)

Great and entirely accurate criticisms, Crom.  Perhaps be slightly consoled by the almost certainty that this government will not be around come the next election and the Super limits are unlikely to be maintained by the Libs who  have a bit more respect for those who are prepared to take responsibility for themselves.


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## So_Cynical (19 June 2011)

Crom said:


> This pathetic Gov't has always and continues to transfer monies from buisiness and traditional income demographics that do not vote ALP, to demographics (lower income), that do vote ALP.
> 
> The piss it up the wall stimulus spending.
> 
> ...




The way you talk about the Labor party one would almost think your describing a left wing socialist organisation. 

-----------------------

Crom at 51 with over half a mill in super you are in the top 50% (average SMSF balance 488K) and the average normal super balance less than half that amount...while you may consider yourself an average Aussie the reality is your above the average, substantially above it.


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## Knobby22 (19 June 2011)

So_Cynical said:


> The way you talk about the Labor party one would almost think your describing a left wing socialist organisation.
> 
> -----------------------
> 
> Crom at 51 with over half a mill in super you are in the top 50% (average SMSF balance 488K) and the average normal super balance less than half that amount...while you may consider yourself an average Aussie the reality is your above the average, substantially above it.




So Cynical - is that figure $488K the average super at 51? Or something else?


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## So_Cynical (19 June 2011)

Knobby22 said:


> So Cynical - is that figure $488K the average super at 51? Or something else?




Average of all SMSF accounts...not by age though figures by age bracket would be interesting...also of interest is the fact that SMSF's have over 1 third of all super moneys while representing only 3% of the total number of super accounts....talk about the rich getting richer.


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## Knobby22 (19 June 2011)

So_Cynical said:


> Average of all SMSF accounts...not by age though figures by age bracket would be interesting...also of interest is the fact that SMSF's have over 1 third of all super moneys while representing only 3% of the total number of super accounts....talk about the rich getting richer.




Thanks - interesting.


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## Julia (19 June 2011)

So_Cynical said:


> Average of all SMSF accounts...not by age though figures by age bracket would be interesting...also of interest is the fact that SMSF's have over 1 third of all super moneys while representing only 3% of the total number of super accounts....talk about the rich getting richer.




Unless we're talking about the average balance at a particular age group, such a figure is imo pretty meaningless.  Obviously someone in their early 20's will not have accumulated as much as someone at or close to retirement.

And to roll your eyes and make a snide remark about the rich getting richer smacks of simple envy.

Much of the population could easily increase their wealth, and could engage in a SMSF, if they simply took responsibility to educate themselves financially and make their own decisions.  Instead, a significant portion of the non-wealthy spend their time whining about how badly their public Super is doing.

OK, yes it's doing badly.  So get off the proverbial and do something about it.

The financial successful are those who work to make it so and are not prepared to accept a passive role.


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## So_Cynical (19 June 2011)

Julia said:


> Unless we're talking about the average balance at a particular age group, such a figure is imo pretty meaningless.  Obviously someone in their early 20's will not have accumulated as much as someone at or close to retirement.
> 
> And to roll your eyes and make a snide remark about the rich getting richer smacks of simple envy.




I thought the multi eye roll and "rich getting richer" comment was well justified based on the numbers...approximately 33% of the total dollar value held within all super funds are held in just 3% of SMSF's ~ 400 billion getting taxed at 15% or 0 depending on the age of the members...its a massive tax rort conducted by the people who can most afford to pay tax.


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## medicowallet (20 June 2011)

The question also needs to be asked about

indexation of the contribution limits....

I have been doing the maximum, but unfortunately, slowly, this is being eaten up by inflation.

Labor, one effective way to ensure everyone remains poor.

Wake up some posters, we always need incentives for people to make it for themselves, not barriers, as people being motivated drives productivity.


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## freddy2 (20 June 2011)

So_Cynical said:


> Because rich people have been taking advantage of the generous tax concessions for many years and by greatly reducing the contribution limits the Govt hopes to levels the playing field somewhat and help the people who need it the most....not greedy rich people who have too much money anyway?




This is the correct answer.

The superannuation system in Australia is basically the lower and middle classes getting fleeced by the financial services industry while the rich exploit super to lower their tax bill. For those who are complaining about the contribution limits there is nothing stopping you from saving for your retirement outside of superannuation.


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## Junior (20 June 2011)

freddy2 said:


> This is the correct answer.
> 
> The superannuation system in Australia is basically the lower and middle classes getting fleeced by the financial services industry while the rich exploit super to lower their tax bill. For those who are complaining about the contribution limits there is nothing stopping you from saving for your retirement outside of superannuation.




Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions.  I fail to see how it's 'confined to the rich'.

You can establish an SMSF and take matters into their own hands if you are concerned about being fleeced.   You don't need a large balance.


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## Julia (20 June 2011)

Junior said:


> Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions.  I fail to see how it's 'confined to the rich'.
> 
> You can establish an SMSF and take matters into their own hands if you are concerned about being fleeced.   You don't need a large balance.



 Exactly.


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## freddy2 (20 June 2011)

Junior said:


> Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions.  I fail to see how it's 'confined to the rich'.




The lower and middle class have far less capacity to salary sacrifice and to do so comes at a far higher cost to their standard of living. A dollar today for these people is worth far more than it is to the rich. I would suggest learning about "diminishing marginal utility".



> You can establish an SMSF and take matters into their own hands if you are concerned about being fleeced.   You don't need a large balance.




In theory yes, in practice no for most people. Most people have neither the time, skill or knowledge to do so. What you are arguing is that people that are being forced to into a situation (ie super) deserve to be fleeced unless they spend a lot of effort not to be taken advantage of.


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## Julia (20 June 2011)

freddy2 said:


> In theory yes, in practice no for most people. Most people have neither the time, skill or knowledge to do so.



I accept that not everyone is going to have the capacity to do this, but dispute that it's the majority.  I know plenty of people, intelligent, well educated, successful in quite demanding careers, who agree that they should spend some time educating themselves and taking charge of their own financial outcomes, but they just 'don't get round to it'.  It is not lack of time.  We can always make time for what is important to us.
None of us were born with some sort of inherent financial ability.  We've all had to acquire basic financial literacy.   It's not that difficult.



> What you are arguing is that people that are being forced to into a situation (ie super) deserve to be fleeced unless they spend a lot of effort not to be taken advantage of.



No, what I'm suggesting is that sufficient competence to run one's own SF is not that difficult to achieve.  There is plenty of education freely available.
But hey, it's certainly easier to just sit back and whine.


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## todster (20 June 2011)

But hey, it's certainly easier to just sit back and whine.[/QUOTE]

bit like politics


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## So_Cynical (20 June 2011)

Junior said:


> Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions.  I fail to see how it's 'confined to the rich'.




Dude seriously...you cant see how someone on 200K a year has 4 times the potential to pay money into anything when compared to someone on 50K?..you seriously cant see how that works?       

There are some dozzy posts getting made in this thread.


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## tech/a (20 June 2011)

freddy2 said:


> This is the correct answer.
> 
> The superannuation system in Australia is basically the lower and middle classes getting fleeced by the financial services industry while the rich exploit super to lower their tax bill. For those who are complaining about the contribution limits there is nothing stopping you from saving for your retirement outside of superannuation.




" Outside of Surerannuation"
Smart and wise comment.

Get yourself in the position of "Rich" outside of super
Do as Julia says and educate yourself.
Invest serious money for serious return.
Above all educate yourself on risk and mitigation of risk.

Something you can avoid far easier than pretty well all super funds managed or self managed I know of.

It's far easier the earlier you start creating your nest egg outside of Super.


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## Junior (21 June 2011)

So_Cynical said:


> Dude seriously...you cant see how someone on 200K a year has 4 times the potential to pay money into anything when compared to someone on 50K?..you seriously cant see how that works?
> 
> There are some dozzy posts getting made in this thread.




Yes, I can see how a high income earner has an increased ability to contribute towards super, and to reduce their tax liability...because they earn more and pay more tax.  Very simple.

My point simply was, that this strategy is not _only limited _to 'the rich'.  i.e. anyone who earns a salary can do this!


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## medicowallet (21 June 2011)

So_Cynical said:


> Dude seriously...you cant see how someone on 200K a year has 4 times the potential to pay money into anything when compared to someone on 50K?..you seriously cant see how that works?
> 
> There are some dozzy posts getting made in this thread.




But like the average person earning $50k, you fail to ask WHY someone is earning $200k and they are only earning $50k.

Might like to ponder that a for a bit over your evening beers, instead of still being at work, or, as in the case of doctors, training for 13 or so years.


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## freddy2 (21 June 2011)

medicowallet said:


> But like the average person earning $50k, you fail to ask WHY someone is earning $200k and they are only earning $50k.
> 
> Might like to ponder that a for a bit over your evening beers, instead of still being at work, or, as in the case of doctors, training for 13 or so years.




This is a red herring, no one is arguing whether people deserve a low or a high income. You have not justified having taxation rules that allow high income earners to lower their tax while not giving the same opportunity to everyone else. You might as well argue that 13 years training and having a high income makes it right for doctors to take kickbacks from pharmaceutical companies.


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## medicowallet (21 June 2011)

freddy2 said:


> This is a red herring, no one is arguing whether people deserve a low or a high income. You have not justified having taxation rules that allow high income earners to lower their tax while not giving the same opportunity to everyone else. You might as well argue that 13 years training and having a high income makes it right for doctors to take kickbacks from pharmaceutical companies.




A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)

A person who earns 200k has a tax rate of approx 32% (before government levies)

So salary sacrificing at 15% tax means that for $25k the high income earner is effectively paying the same amount of tax on that $25k as the $50k earner.

Some prior posters need a reality check for the real world.

WHERE is this advantageous taxation area??? I fail to see it.

If anything it is unfair for a $200k earner to pay $63k + tax for working more than the person who pays less than  $8500 per year.

.... awaiting the "we deserve to be subsidised by high income earners" posts by the middle class welfare posters.

Some people make their own "luck", others whine about it.


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## ginar (21 June 2011)

medicowallet said:


> A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)
> 
> A person who earns 200k has a tax rate of approx 32% (before government levies)
> 
> ...





touche  , its amazing how many capitalist socialist traders are out there LMAO ... what an oxymoron   ...


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## freddy2 (21 June 2011)

medicowallet said:


> A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)
> 
> A person who earns 200k has a tax rate of approx 32% (before government levies)




It's called a progressive taxation system, which all advanced western economies have in one form or another. Perhaps you should learn about it, the benefits as well as the disadvantages.



> So salary sacrificing at 15% tax means that for $25k the high income earner is effectively paying the same amount of tax on that $25k as the $50k earner.
> 
> Some prior posters need a reality check for the real world.
> 
> WHERE is this advantageous taxation area??? I fail to see it.




Reminds me of the quote "None so blind as those who will not see". You do know you pay the same amount of tax on your first $50000 of income as everyone else? You do know what a marginal tax rate is?



> If anything it is unfair for a $200k earner to pay $63k + tax for working more than the person who pays less than  $8500 per year.
> 
> .... awaiting the "we deserve to be subsidised by high income earners" posts by the middle class welfare posters.
> 
> Some people make their own "luck", others whine about it.




And some people make mistaken unsubstantiated assumptions that others are "whining". These people don't seem to grasp that it is possible to criticise the unfairness of the taxation system while at the same time benefiting from it. Just because most people in this thread are making self-serving arguments doesn't mean everyone is.


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## freddy2 (21 June 2011)

ginar said:


> touche  , its amazing how many capitalist socialist traders are out there LMAO ... what an oxymoron   ...




I guess you missed the irony of someone whose whole profession depends on government interference of their market complaining about government interference in other areas.


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## medicowallet (21 June 2011)

freddy2 said:


> I guess you missed the irony of someone whose whole profession depends on government interference of their market complaining about government interference in other areas.




1. If you want the best medical practitioners to move to America or Europe, just stop it.

2. People would pay for medical treatment if it was NOT government subsidised, AND it would result in doctors being paid MORE.

Learn about remuneration of medical professionals, and you will realise that many, especially the most proficient are paid much less here than what they are worth.


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## medicowallet (21 June 2011)

freddy2 said:


> Reminds me of the quote "None so blind as those who will not see". You do know you pay the same amount of tax on your first $50000 of income as everyone else? You do know what a marginal tax rate is?
> 
> .




Of course I know this.

Do you also realise that there are people on this thread who are saying that salary sacrificing is unfair?

That it is unfair to lower income earners that higher income earners may receive a tax concession TO THEIR LEVEL for a mere $25k income.

How serious do you expect me to take your posts?  Do you really believe that a tax concession of $6-7k is unfair for a person contributing $60k, especially when the $50k earner contributes only $8k  

AND the high income earner will never require a pension etc later in life.

Have your cake and eat it too mate, because you can have yours and the high income earners too.

Spend some time training yourself up, earn some real money, then come back here when you have some perspective.


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## todster (21 June 2011)

medicowallet said:


> But like the average person earning $50k, you fail to ask WHY someone is earning $200k and they are only earning $50k.
> 
> Might like to ponder that a for a bit over your evening beers, instead of still being at work, or, as in the case of doctors, training for 13 or so years.




Yeah the one who do breast augmentation and lipo and stuff deserve special rates imo


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## todster (21 June 2011)

todster said:


> Yeah the one who do breast augmentation and lipo and stuff deserve special rates imo




Stayin back late lookin at there work  13 years well spent thats wha i call super!


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## todster (21 June 2011)

medicowallet said:


> Of course I know this.
> 
> Do you also realise that there are people on this thread who are saying that salary sacrificing is unfair?
> 
> ...




Gee mate i will excede your 60k with only 4years training who is the fool


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## So_Cynical (21 June 2011)

medicowallet said:


> A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)
> 
> A person who earns 200k has a tax rate of approx 32% (before government levies)
> 
> ...




Medico do you think someone on 200K a year has greater potential/opportunity to take advantage of salary sacrifice when compared to someone on 50k ?

Even if we consider that our mystery worker pulling 200K has twice the outgoings of the Drone pulling 50K, our 200K man/woman still has 4 times the capacity to sacrifice/take advantage of the system.

I don't know about the other average income earners out there but im sick and tired of propping up the whiny rich, im glad the green Labor alliance is clawing back what they can from the hands of Australia's whiny rich.



medicowallet said:


> Spend some time training yourself up, earn some real money, then come back here when you have some perspective.






ginar said:


> touche  , its amazing how many capitalist socialist traders are out there LMAO ... what an oxymoron   ...




Well you got the Moron part right.


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## sptrawler (21 June 2011)

So_Cynical said:


> Medico do you think someone on 200K a year has greater potential/opportunity to take advantage of salary sacrifice when compared to someone on 50k ?
> 
> Even if we consider that our mystery worker pulling 200K has twice the outgoings of the Drone pulling 50K, our 200K man/woman still has 4 times the capacity to sacrifice/take advantage of the system.
> 
> ...




Well So_Cynical maybe you could ask how many of your moraly superior Labor/Green fabulously caring politicians are observing the limits they are imposing on everyone else.
Funnily enough the only politician I have ever seen, that had the dignity and honesty to accept the punitive class oppressive rules they force on others, was Allan Carpenter. He didn't last long, obviously had principles and couldn't live with the smell.
I really wouldn't mind any of the superannuation laws if they applied equally to the politicians that invoke them. However it is just a case of "the working class can kiss my aaaaaase I got the bosses job at last".
The rich don't need the super contribution breaks, it is only the people breaking their **** doing fly in fly out 14 on 7 off etc. They need the opportunity to put some off the high income(for a lot of hours worked) away in super so there is a light at the end of the tunnel.


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## medicowallet (22 June 2011)

todster said:


> Gee mate i will excede your 60k with only 4years training who is the fool




1. Earning more than $200k is very good with only 4 years of training well done!!  May I ask what it is that you do?  

2. I never said that I only earn $200k.  I don't know any full time specialist who only makes $200k 



So_Cynical said:


> Medico do you think someone on 200K a year has greater potential/opportunity to take advantage of salary sacrifice when compared to someone on 50k ?
> 
> Even if we consider that our mystery worker pulling 200K has twice the outgoings of the Drone pulling 50K, our 200K man/woman still has 4 times the capacity to sacrifice/take advantage of the system.




Of course they have the capacity.

However they do so at 15% tax, and hence are doing so at the average tax rate of a $50k earner, so they are not doing so at an unfair advantage.

The tax rate on the $25k salary sacrifice is the same as the $50k income earner.

Gee, the next argument will be that someone who works 60 hours per week is getting unfair pay because they earn more than someone working 40 hours per week.


The fact is that everyone can do any job.  I could TRY to become CEO of CBA. I would make more money than I do now, but would have to receive the appropriate training, work my way up the corporate ladder, and make many sacrifices to achieve that position and hence the opportunities that affords.

For me, with the prospects of that, it may be better to become a truck driver at the mines, or a geologist/engineer, and ride a potentially temporary boom for what it is worth.

Then I could whinge about how much CEOs are paid, without any thought of the fact that I could be that CEO.



So_Cynical said:


> I don't know about the other average income earners out there but im sick and tired of propping up the whiny rich, im glad the green Labor alliance is clawing back what they can from the hands of Australia's whiny rich.




So, to "prop up" the whiny rich, how much tax do you pay per year?

Or is that just a throw away line, without an understanding of what some people actually pay per year?


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## Junior (22 June 2011)

So_Cynical said:


> I don't know about the other average income earners out there but im sick and tired of propping up the whiny rich, im glad the green Labor alliance is clawing back what they can from the hands of Australia's whiny rich.




Observe my case study:

*Case Study*

Average worker earning $50,000 with no capacity to salary sacrifice pays the following tax:

_Income tax and medicare   $8,600
Contributions tax based on 9% super conts    $675
TOTAL TAX   $9,275_

Worker earning $200,000 taking advantage of the system by salary sacrificing $32k into super:

_Income tax and medicare   $46,450
Contributions tax based on 9% super conts    $2,700
Conts tax on salary sacrificed amount   $4,800
TOTAL TAX   $53,950_

Even after making maximum salary sacrifice conts, wealthy person still pays 5 times as much in income and contributions tax for the year, so, in fact, they are 'propping up' the average worker.


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## sptrawler (22 June 2011)

Also junior, lets not forget the compulsory health insurance, $4,200p.a h.b.f


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## Crom (22 June 2011)

Dear oh dear, how big are some of the chips on the shoulders out there (So_Cyn and todster).

Other posters on this thread are politely trying to point out facts in regard to taxes paid, benefits of hard work, reskilling and taking ownership of financial matters.

However you guys just want to stick to your bizzare view of what a higher income earners profile is, and that they are parasites in the tax system.  May I suggest that you actually talk to someone who is a higher income earner and you will be totally blown away.

The gst I pay would be higher than average income persons tax.  Then add my income tax plus SMSF taxes (introduced by the Hawke/Keating Gov't from memory). Some of my close friends and family members, pay more tax in their 3 monthly BAS statements, than I earn in a year!

Your view so Cynical re supporting the wealthy is just embarrassing.  All professionals income is identifiable to the ATO, and taxed!  Deductions are based on spending on buisiness needs, and that means foregone monies, AND, the supporting of other buisinesses and their staff.

We do not live in feudal times mate, or in a country where the aristocracy is supported (though we do sadly have to support many ALP and Green clowns).

I actually find your comment re the ALP/greens clawing back monies to lower income demographics as rather ofensive.  Albeit I acknowledge your bravery in admitting to supporting this minority Gov't, as it continues on it's merry way of destroying this country.  (I hear you Julia re they won't be in for much longer.  However once the coalition clears up the mess, the electorate will then do what they always do and vote in another ALP Gov't!).

My offense is that what you are actually saying is that rather than taking ownership of your current situation by re skilling, working longer hours, changing occupations etc, you just want a Gov't that will continue to strip money away from achievers so that you can get more without having to work for it.

so you don't think I am a hypocrite, I left a cushy senior management job in the public service in my mid thirties.  I had a degree in Economics and a post grad management degree.  Both undertaken while working full time without any assistance.  I then did a science degree, again while working fulltime, and started my own buisiness.  My income was very hand to mouth for a number of years but with hard work and intelligence, I am now a higher income person of the type you despise.

Might I add that I also got rid of my managed funds in super, and set up and managed my own SMSF.  Taking this from $60 k to almost $700K.

Nothing has come easy mate.  I get nothing from the Gov't.  When I retire I will get nothing from the Gov't.  For you to sit back and vote a certain way hoping that I will have more tax dollars transferred to people who don't want to make ownership changes is offensive.

Now master Todster, your comments re plastic surgeons is also offensive.  And being the good Catholic that I am, I pray that you don't have a major accident that requires their service.  And by the way, given what a females body goes through in having children and breast feeding, how dare you villify a woman who wants her breasts back the way they were.

My other gripe is your attack on medical professionals.  My younger brother is a cardiologist, and he deferred making a good income for over 12 years of education and training.  I bet my left one that if you needed him to save your life, or the life of someone close to you, you would not begrudge him one cent of income.  He also works very long hours and is on call 7 days a week, 24 hours a day unless he can get another cardiologist to cover for him.

And do you know another thing, I whinged to him about the amount of tax I pay, and in his gentle way he just smiled and I felt rather silly as his 3 month tax bill was more than my total yearly income.    

I don't think anymore really needs to be said on this thread.  If you are unhappy then take ownership and make changes.  Be assurred that higher income earners do pay a very fair share of their income in tax, and that they are not demons who exist to make your lives poorer.

I wish you well and hope your stock selections are better than your political ones!

All the best to all the posters here

CROM


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## Intrinsic Value (22 June 2011)

So_Cynical said:


> Medico do you think someone on 200K a year has greater potential/opportunity to take advantage of salary sacrifice when compared to someone on 50k ?
> 
> Even if we consider that our mystery worker pulling 200K has twice the outgoings of the Drone pulling 50K, our 200K man/woman still has 4 times the capacity to sacrifice/take advantage of the system.
> 
> ...




Things are not as simple as they may seem.

Take my case for example.

I am over 50 and obviously haven't enjoyed the compulsory super scheme as long as young people will do in the future.

Further I never made a lot of money when i was young and of course I had a family and mortgage to pay as well then.

I am now according to  you super rich am earning close to 300k a year but this has only happened over the last couple of years and wont continue for too many years.

Wouldn't it be more cost effective for the government to allow me to salary sacrifice as much as possible at the 15 percent so that they dont have to support me on a pension for 25 years?

A lot of people dont start making money til later in life and of course when they are younger have different priorities so a tax break for those trying to save for their retirement is hardly a burden on society especially if it means they wont be dependent on the government pension for many years.


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## sptrawler (22 June 2011)

Intrinsic Value said:


> Things are not as simple as they may seem.
> 
> Take my case for example.
> 
> ...




Don't worry, you are the exact person the government is aiming at. They can't afford to have you stop work, you are the typical baby boomer who just gets on with it.
Funnily enough if all the labor politicians who brought these stupid limits in, hadn't been elected to office and were still in their union jobs they would be peesed off the same as us. Ferguson, Combett etc.


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## todster (22 June 2011)

Crom said:


> Dear oh dear, how big are some of the chips on the shoulders out there (So_Cyn and todster).
> 
> Other posters on this thread are politely trying to point out facts in regard to taxes paid, benefits of hard work, reskilling and taking ownership of financial matters.
> 
> ...




It's called takin the piss mate!
Pity your brother wasn't a proctologist he could have pulled your head out


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## So_Cynical (23 June 2011)

todster said:


> It's called takin the piss mate!
> Pity your brother wasn't a proctologist he could have pulled your head out




I loled.


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## Intrinsic Value (23 June 2011)

sptrawler said:


> Don't worry, you are the exact person the government is aiming at. They can't afford to have you stop work, you are the typical baby boomer who just gets on with it.
> Funnily enough if all the labor politicians who brought these stupid limits in, hadn't been elected to office and were still in their union jobs they would be peesed off the same as us. Ferguson, Combett etc.




I dont want to get into bashing Labor or Liberal as of course it was Labor under Keating who initiated the scheme so kudos to them.

It was Costello under the Libs who inititated the 50k and 100k caps for salary sacrifice at 15 percent tax so kudos to him.

But unfortunately the current government is eyeing the super honey pot and what they will end up doing is anybody's guess. On the one hand they are telling us we should all save for our retirement but on the other hand they are taking away the incentives for people to do just that. It doesnt make sense.

Unfortunately the Liberals dont even want to continue the 50k cap for over 50s so I have little confidence in them either when it comes to super.

The bigger super gets the more dangerous a temptation it becomes for governments to try and get their hands on it. I trust neither of the major parties when it comes to super.

Unfortunately both major political parties are addicted to wastage of taxpayers money.
We should be running huge surpluses given our financial position.
But middle class welfare, disability pensions, over generous concessions to seniors who are not in any dire financial state coupled with general fiscal mismanagement have created a situation if it were not for the mining boom we would be in the same basket case as the US and some of the struggling European countries.


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