Unintended consequences of Labor's Cash Grab, page-2

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JonnoH

12,970 Posts.

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14/12/18

17:21

Post #: 36864393
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Originally posted by picastoc ↑

The Liberal government suggested in March that 97% of people who get the franking credit refunds already (1.17m people) have a taxable income below $87,000 and more than half of them have taxable income below the tax-free threshold.

Yet B.S. thinks he is targeting only the super rich. Not so.

The super wealthy (those with significantly more than $1.6 million in super assets), since the introduction of the $1.6 million transfer balance cap on super pay 15% tax on investment earnings and capital gains (if the asset was held less than 12 months or 10% if held more than 12 months) and as such will be able to utilise the benefit of franking credits to offset that tax.

In many cases, for the super wealthy, the introduction of the $1.6 million transfer balance cap and the removal of cash refunds of franking credits ends up being a nil sum game - no refund, but no tax payable, because the 30% company credits are offset by the 15% super tax. In other words, the franking credits negate tax on earnings above the $1.6 million. The wealthy still get the use of the imputation credits whereas those with less than $1.6 million in super, on the other hand, simply lose the tax refunds altogether.

PROBABLY WON'T EVEN GET UP AT ALL. TOO MANY PEOPLE SEE THAT THE POLICY IS POORLY TARGETED.

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What is the unintended consequence?

The intended consequence is that no refunds will be given to anyone who doesn't pay any tax.

The 50+BILLION savings to the budget is AFTER factoring in the 1.6mill cap. It would have been an even bigger saving had the 1.6 mill cap not been factored in.

Nothing unintended about that at all.

unintended consequences - rofl
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0 Great analysis

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Unintended consequences of Labor's Cash Grab, page-2

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

Alcidion inks deal with Vic health provider Peninsula for use of Miya Precision tech

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

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MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

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Unintended consequences of Labor's Cash Grab, page-2

Top Stories

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

Alcidion inks deal with Vic health provider Peninsula for use of Miya Precision tech

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

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