Actually, the original purpose of franking credits was not to ensure that dividend receivers didn't pay tax as if they were companies. It was to ensure that the 30% company tax already paid was not taxed again. In its original form years ago (per Keating's vision) only taxpayers who had an average (not marginal) tax rate was 30% or more (i.e. only those with taxable incomes >$180k under today's individual tax scale, as demonstrated in my OP) would obtain the full imputation benefits. Taxpayers on lower average tax rates would essentially forgo the difference, thus making dividend paying share ownership much less worthwhile for them. It wasn't until Howard and Costello amended the provisions to allow tax refunds for any surplus (unused) franking credits that it became viable for lower income earners to invest in dividend paying companies, thus further democratizing access to the stock market, tax-wise. Put another way, it leveled the paying field to make it worthwhile for not just the highest income earners, but everyone else too, right down to the little guy.
And now that investment decisions/strategies have been well and truly locked in, many, many years later, it will be the lower income earners who proportionately suffer the most if Labor ever gets their way. It's a rather perverse notion, isn't it? And to think that they spinning this as measures against the high income earners, who must be having a hearty chuckle.
