Franking credits - gone?

So would this potentially promote 'tax gain selling' - to realize capital gains as 'other income' that your franking credit refund can be offset against? Still no refund but you get to reset your CGT base.

 

That's an interesting idea. Wait till they come up with something for that as well

 

In Super even for a retiree it would appear that a total return, growth focus might be more beneficial under Shorten’s plan. Capital Gains is tax free (will that change also) with Super Pensions. So selling growth assets will be tax free for retirement income whereas fully franked dividend income loses 30% of the benefit?

 

Avoiding the aged pension is a key point. There is a monetary gain from retirees self funding their retirement for longer and avoiding the aged pension. Without such benefits we may see less retirees motivated to become self reliant and a net negative effect on the public purse.

Unfortunately like usual the current government will benefit and pass the buck down the line in a bigger fashion for the young generations they purport to support.

 

A filthy policy, Shorten wouldn't be reading this but if he were I'd be telling him stop moving the goal posts William. Probably the thing that makes me so proud and happy to be an Australian living in this great country is that if you're willing to give it a good hard crack, you can make it in this country. I repeat if you give it a crack.
What Shorten is doing is literally penalising the little guy having a crack and trying to make it. Penalising the little guy that worked hard and invested, not aimlessly spent on living the 'life', then retiring with the hand out asking for tax payr money.
But it's ok cause if you buy a ute or plant equipment Bills willing to give us (small business) a 20% refund.

Good on you Bill you clown without the face paint, let's stop people working hard, investing in appreciating/income producing, tangible assets that will enable one to not put strain on the public purse and live ones days off the fruits of their own labour. Let's instead encourage people to spend money on Utes and equipment that will be worth a fraction of original purchase price, that will do nothing for their retirement and just keeps on putting further strain on the public purse.

Disclaimer: This policy will not affect me as I'm not on a lower then company tax rate I just care about the FUTURE of this country and sticking up for anyone having a go.

Disgusted

 

I think what annoys me the most is that he’s selling it as if it’s a tax on the wealthy (it’s not especially if you’re above the marginal tax rate), hoodwinking his voter base when really he’s hurting them?

 

Exactly! It's the same as the negative gearing policy that is supposed to make things fairer but really just hurts lower income investors. Have a look at this thread and you will see it has its supporters. So, these policies pretending to hurt "the rich" but which will really hurt "the poor" are resonating with the Labor voter base. I guess it just goes to show how much they lack critical thinking.

 

I fear that,unfortunately,his voter base that he is hoodwinking just won't believe that this is so.

 

To be honest, it just seems lazy.

I mean, if the tax take is reducing from companies, as @The Falcon suggested, and they're frustrated by self funded retirees with huge balances claiming tax refunds (which multiple articles stated as the primary reason), then why not just put a cap on refunds (or cancel them) for people with very, very large super balances?

This would save the bulk of the money, while doing the least damage.

Why drag everyone else through it too, when it's not their target.

 

Exactly. This policy just feels lazy and is just for political point scoring because really, how much does the average person know about the imputation system in this country and how it affects their super?

 

I can't imagine what they were thinking when they came up with this idea. There is no logic in this whatsoever.

 

There seems to be a lack of sensible economic policies coming from Shorten and team over the last while.
Noel Whittaker did a nice take-down of the effects of the Shortens proposed negative gearing allowance changes which are likely to bring in a thimble full of tax revenue now but cost a bucket load of spending (pensions etc) later
Interesting to see how much capital moves offshore if ALP win '19 (likely) election ....

 

This will impact on everyone, including age pensioners, who does not have sufficient taxable income to allow them to absorb the imputation credits.

Especially full age pensioners, who may have a few small parcels of shares, but not enough to exceed allowed assets or income.
Marg

 

Doesn't this policy effectively set the tax rate for super accounts in pension phase at 30%?

 

Only for franked dividends.

 

Hopefully this gives Labor some flexibility to reduce personal income tax rates.

It's a global phenomenon that capital and passive income attracts a preferential tax treatment to "earned" income. The old man Warren B even comments about his effective tax rate being lower than his secretary. So if I can get a tax cut now while I'm working, then screw the old people who not only pay no tax on their "unearned" income, but also get a kickback from the ATO to boot (yes I realise the irony that one day I will be an old investor too lol)

And if corporate tax rates come down too, then the franking credit "hit" will be reduced anyway.

Swings and roundabouts. The sky won't fall in. Every change opens a new strategy for the nimble. Turnbull said it himself: Be agile!

 

Exactly mate! Couldn't be further from the truth, that's what gets me the most, the blatant lies. Then you get all the brainwashed followers, "yeah let's get the rich"!! Rich arnt battering an eyelid, this is hitting lower to middle and those that have contributed a working life to this country and are trying to get by off their own back.

 

You better read their proposal again

 

In the worse case of implementation, as you say, it can target everyone who owns a dividend paying share in the ASX. I think there is not enough information to work out what Labor is proposing. I just give them the benefit of the doubt that they are reasonable and adopt a more defensible policy.

Labor mentioned that its proposal is meant to plug loop holes that allow someone who pays no tax to get a $2.5m tax refund in the worse case. Everyone with incomes is subject to tax, with the notable exception that income from an account based pension is exempt after age 60. The existing government has already capped the amount of capital allowed in a pension based account which pays no tax. I believe the so called transfer balance cap is $1.6m. This cap is even lower than the $2.5m tax refund shown in Labor's example!

It is highly likely that Labor's proposed savings of $59b over 10 years may be vastly exaggerated, based on misleading data that double count savings the existing government has already taken.

Just my 2 cents on this proposal.

 

Won't make any difference. The Grattan Institute Report that the negative gearing policy is based on admits that lower income investors will be worse off. Supporters of the policy don't care and won't listen. I shouldn't complain because the policy is great for me. My tax under the negative gearing policy won't change and I will be able to add a negatively geared property to my portfolio. But getting a tax advantage while lower income investors are worse off doesn't sit right with me.