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.
No they are taking them off SMSF, so the fund returns about 4-5%, they are still giving Industry funds all the franking credits, so they will be able to offer 7%.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.
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)
This doesn't make sense... Full stop.. And it is not true.
A PAYE worker on $50k with some dividends from shares will have no change whatsover with Labours proposed policy.
At this point he/she is not getting any direct refund of tax credits because they are are used against his PAYE earnings. If Labour passes this policy he/she will still use the tax credits against his income.
That is it.
_________________________________
The argument about the loss of the refund of tax credits applies to people who have arranged their affairs so they have little taxable income against which to use the tax credits . This is usually very wealthy people (or their partners or children) who have managed to construct a tax return with enough deductions so their nominal taxable income is low but they get $20,30,100K in fully franked dividends from investment portfolios worth about 20 times these dividends.
These are not low income toilet cleaners working three days a week.
Like I said to Rumpy, it is a ham fisted way, to get SMSF's into Union Industry Funds.@basilio it's not about the low income toilet cleaners, or those who pretend to be - it's about the low income self funded retirees whose only source of income is from the dividends.
If their total yearly income is under the tax free threshold they potentially lose around $4000 a year from lost franking credits.
They then have to decide whether they go back to work (not likely given the employers' grudge against older people) or go onto welfare - which partially mitigates the budget savings.
This is the part of the policy opposed by most of the parliament - including the Greens, which is why I maintain the view that it won't succeed..
once you get over 18K in dividends you are taxed, its income
just so i can follow ...can i assume when talking tax thresholds u r talking about income outside the super system? ( by someone over 60)@basilio it's not about the low income toilet cleaners, or those who pretend to be - it's about the low income self funded retirees whose only source of income is from the dividends.
If their total yearly income is under the tax free threshold they potentially lose around $4000 a year from lost franking credits.
They then have to decide whether they go back to work (not likely given the employers' grudge against older people) or go onto welfare - which partially mitigates the budget savings.
This is the part of the policy opposed by most of the parliament - including the Greens, which is why I maintain the view that it won't succeed..
soz ...not quite true .... by "anyone" i mean "anyone that is not on welfare and is trying to get above the mire by investing in franked shares"."Kathrin Bain, from the School of Taxation and Business Law at UNSW Sydney, said as a general rule most of those affected by Labor's policy had marginal tax rates less than the company tax rate".
that is the truth ........... for whatever reason anyone with a tax rate below 30% (forget 28.5% etc) is going to have money taken out of their pocket.(except if you are on welfare u get to keep the money)
Labor is ONLY taking money away from peeps on tax rates lower than 30% .......... that is not a great policy for a country.
The important point TL was that taxable income is kept low. The strategy currently used by some retirees is receiving dividend income through super funds which is not included as part of their taxable income. So they pay no taxes on $50,60,100k of dividend income.
Then because they they have such a low nominal income they have been getting the imputation credits as well. This will be usually worth an extra 30%.
I can see the point about a small group of retirees living off relatively modest investments being unfairly hurt. However the overwhelming fact is these people represent only a small part of the affected group. I'll repost an analysis soon.
As you point out the argument that hardworking toilet cleaners on $50k with investments in the Comm Bank will lose tax credits isn't accurate.
I sold a really nice house, in a really nice position on the river, to become self funded.
Now I wish I hadn't bothered, and just stayed in the house,with a Government pension.
If I had known that super, was going to be screwed around with so much, I would have organised my affairs differently.
Now I wish I hadn't bothered, and just stayed in the house,with a Government pension.
Yes, but not necessarily someone over 60. I'm looking at someone who may have been retrenched - saved a bit of money - but can only generate 18k p/a or less from it. And probably unfit for work.just so i can follow ...can i assume when talking tax thresholds u r talking about income outside the super system? ( by someone over 60)
thxYes, but not necessarily someone over 60. I'm looking at someone who may have been retrenched - saved a bit of money - but can only generate 18k p/a or less from it. And probably unfit for work.
When the 7:30 report did a thing on the Labor policy there was a protester in the above position.
Super is something I haven't really looked at yet.
Super isn't the biggest issue since there seem to be workarounds to that one via industry funds and super is, of course, a tax favoured environment as a concept in the first place.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.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?