Franking credits....who cares?!

The value of franking credits depends on your tax rate. A smsf will value it differently to someone on 47%. Do inviduals value them differently as their income increases? Most arent that sophisticated. A fund manager doesnt care because they dont care how investors pay tax. You cant price in a variable value.

 

Isn't the rate fixed? It's the difference between your MRT & the franking rate which varies.

 

Yes it is always the middle class who have to foot the bill for political aspirations.

 

Around the edges there may be price decline due to removal of franking refunds, but I dont see it being significant. Dividend imputation is not being removed, just refund of excess credits. I do not see any meaningful changes to the capital allocation decision made by business. Business as usual.

 

Opposition to the removal of refundable franking credits | Other presentations & print media | Argo Investments Limited - ASX:ARG

 

Spike in share buybacks ahead of Labor's franking credit crackdown

 

Interesting article Will Labor's dividend imputation policy overwhelmingly affect the low paid? - Fact Check - ABC News (Australian Broadcasting Corporation)

In the end, the wealthy who are affected will restructure, no gain there, most people in SMSF should be able to restructure into a different structure, pensioners continue unbridled and the remaining planned gains will be minimal.

And stop with the talk about people getting a return for nothing - if someone owns a share in a company they pay tax when that company pays tax.

This is a politically motivated policy that will be lucky to bring in a third of the proposed 5 billion. The only beneficiaries are the Lakers and accountants doing the restructuring.

 

11 urban myths about franking credits

The decision to introduce dividend imputation has provided an unforeseen benefit for Australia, perhaps one that is still not fully appreciated by policy makers – it has made Australian companies manage their capital more efficiently. That makes them sounder investments.

Yet this benefit appears to be in jeopardy because the debate about the value of dividend imputation is obscured by myths. This submission seeks to puncture these illusions in the hope that policy makers will possess the information they need when judging the effectiveness of a tax system that has served Australia well since 1987

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