it baffles me on a stock market forum how one can not grasp the...

it baffles me on a stock market forum how one can not grasp the concept.

2 examples:

1. You get a tax credit via PAYG for tax you never paid via your wage via your employer. This is tax paid on the owner of the wage’s behalf, ie you. So let’s say you earned $7,000 and your employer withheld $3,000. You no longer worked for the rest of the year. Therefore $7k plus $3k tax already paid (a tax credit), means your taxable income for the year is $10,000. As you’re a low income earner your tax rate is 0% so you get back the $3k back.

2. You own shares in a company. They have tax on your behalf via their profit. They pay out their profit to the owner, you. However tax has already been paid (withheld at the corporate tax rate of 30%), just like the wage example above. You receive $7,000 cash, with $3,000 in tax credits sitting with the ATO (just like your basic wage example above). You don’t work, you’re a low income retiree. That’s all the income you received for the year. Your taxable income is $7k cash plus the value of the 30% tax already paid on that taxed income (the dividend). So your taxable income is $10,000. As above, as your income is below the tax free threshold you receive that $3,000 back as a refund as the owner of that dividend (income) shouldn’t pay tax. Just like above.

conclusion:

what labor is trying to do is set a minimum tax rate for low income earners who dare to own shares and not be 100% reliant on government pension handouts or welfare. He is taxing low income earners at 30% for share income. This is wrong.