Abbott/Liberal Govt Watch

[mighty_tiger_79]

The leftys are a loud bunch

Chris Kenny attempted to drown out all and sundry with his review. Comical.

Neither leader was particularly convincing. We gleaned sweet f**k all from tonight.

Pretty dull and boring watch unfortunately.

Both had.good moments where they really.could have gone in for the kill but they just let the other get away with it.

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[Jimmy_041]

The leftys are a loud bunch

Chris Kenny attempted to drown out all and sundry with his review. Comical.

Neither leader was particularly convincing. We gleaned sweet f**k all from tonight.

Pretty dull and boring watch unfortunately.

Both had.good moments where they really.could have gone in for the kill but they just let the other get away with it.

Sent from my SM-A520F using Tapatalk

Agree. Stay tuned to safooty.net for the real leaders debate...

[mighty_tiger_79]

The leftys are a loud bunch

Chris Kenny attempted to drown out all and sundry with his review. Comical.

Neither leader was particularly convincing. We gleaned sweet f**k all from tonight.

Pretty dull and boring watch unfortunately.

Both had.good moments where they really.could have gone in for the kill but they just let the other get away with it.

Sent from my SM-A520F using Tapatalk

Agree. Stay tuned to safooty.net for the real leaders debate...

Q v Jimmy.

When and where???

Morell to moderate?

Sent from my SM-A520F using Tapatalk

[Q.]

The leftys are a loud bunch

Chris Kenny attempted to drown out all and sundry with his review. Comical.

Neither leader was particularly convincing. We gleaned sweet f**k all from tonight.

Chris Kenny is a gibbering halfwit whoring himself to Australian plutocrats.

[mighty_tiger_79]

The leftys are a loud bunch

Chris Kenny attempted to drown out all and sundry with his review. Comical.

Neither leader was particularly convincing. We gleaned sweet f**k all from tonight.

Chris Kenny is a gibbering halfwit whoring himself to Australian plutocrats.

Yes, completely agree

Sent from my SM-A520F using Tapatalk

[Jimmy_041]

Tin foil hat conspiracy theories
inner turmoil
Plutocrats

Wow; it’s a new world

[Jimmy_041]

The Libs love giving the wealthy a handout. 'Trickle up' policy at work:

According to Treasury documents, flattening tax brackets will result in a total tax cut of $1,205 a year for a person earning $50,000, $1,955 for someone earning $80,000, $3,040 for a person earning $100,000 increasing to $11,640 for those earning $200,000 or more.

Based on the government’s figures that the Coalition’s plan will cost $230bn more than Labor’s, the Australia Institute analysis finds those earning more than $180,000 will get at least $77bn in tax cuts over the next 10 years. Most of that benefit ($64bn) will flow to those earning more than $200,000, it says.

The majority of the income tax cuts (54%) goes to those in the top 20% of taxpayers, according to the Australia Institute.

The analysis also reveals that under the flat tax plan high-income earners – defined as the top 20%, estimated to be those earning $203,000 by 2024 – will be paying 4% less of the overall income tax take than in 2018-19.

Low-income earners, the bottom 30%, will pay 1.7% more of the overall tax take and middle-income earners, the middle 50%, will pay 2.2% more.

https://www.theguardian.com/australia-news/2019/apr/18/high-income-earners-would-receive-77bn-in-tax-cuts-under-liberal-plan?CMP=soc_567&fbclid=IwAR0gV7nVoNSXbZKUqPkXCvo1KW8QLkm4i4ZReORA6fNKwbFaGW2FN9znLKs

Actually you quoted the Guardian quoting Treasury and it had nothing to do with franking credits. Here it is.
"Inner turmoil" I just like exposing bull$hit and you just keep giving me plenty to work with.
Keep changing your story when you get outed - it's working really well for Bill.

Oh dear Jimmy. Your inner turmoil is clouding your search function. That post was in relation to tax cuts,

Oh dear Q. Your comprehension skills on full display. That’s what I said.

[Jimmy_041]

We know you struggle with comprehension (see Franking Credits) but reference to 2013 is in regards to discussion of preferences.

The AFR struggling with comprehension about Franking Credits again. Q’s inner turmoil about me quoting the AFR and not being able to label the opinions as vile Murdoch pieces is palpable. And FMD! He’s an Adjunct Professor at SU to boot! Ah! But! He has a 1st class Honours degree and PhD in Economics from Cambridge University, UK. so he must be a Tory and biased. But, anyway, I’ll post the entire opinion for all to decide whom has the comprehension deficiency.

Opinion
Labor franking credit furphies hurt the most vulnerable

Could there be a clearer example of fake news: repeating that tax wasn’t paid when clearly it was?
Adrian Blundell-Wignall
May 8, 2019 — 11.00pm

Regardless of who wins the next election, the question of trust and ethics in our politicians will remain. Ethical issues are normally hard to dissect, when generalisations and vagueness abound. But the Labor Party assertion that people who get franking credit refunds haven’t paid any tax, so the taxpayers are giving them a gift, raises an ethical issue. These people have paid tax – they are the beneficial owners of companies and had a 30 per cent tax paid for them by the “legal person” charged to do so on their behalf.
Confiscating their refunds undermines property rights.
The latest Edelman Trust Barometer shows that Australians do not trust their governments. Just 45 per cent of men and only 39 per cent of women trust government in Australia. Employers (77 per cent) and general business (52 per cent) are trusted more than government – imagine, governments trusted less than the finance sector, which underwent the royal commission
“Trust’’ is about reliance. If I am to rely on my government, then I am trusting that they will act truthfully and in the collective interest and hence I, in turn, can base my actions on this understanding.
At a general level it’s likely that superannuation policy has broken trust by continual changes in the rules. You cannot rely on politicians not to keep dipping into the honey pot. Nevertheless, such policies are the prerogative of governments and they treat equals equally. The franking credit proposal is quite different to this.

Labor has thrown up a snowstorm of rationales:
Giving refunds is a gift due to a tax loophole.
No other country in the world refunds franking credits, so nor should we.
People with self-managed super funds (SMSFs) are wealthy and rorting the system.
The alleged franking ‘‘loophole’’
A tax ‘‘loophole’’ is an unintended aspect of the law that allows taxes to be avoided. A ‘‘refund’’ is the repayment of a sum of money (it belongs to you). No one is avoiding either company or income tax under the current system. The ‘‘legal person’’ paid the company tax on behalf of the ‘‘beneficial owner’’.
The basic cause of the refund is that the money paid – the property of the beneficial owner – can’t be used in the way the company intended because government policy allows super income to be drawn down tax free.
Background: A limited liability company is the ‘‘legal person’’ in corporate governance that has responsibilities vis-a-vis the shareholders (the beneficial owners). Its presence ensures shareholders aren’t liable beyond their invested capital (the ‘‘corporate veil’’). Tax loopholes can arise. The corporate veil may be used to disguise the beneficial owners for illicit tax purposes, such as chains of shell companies ending in the Cayman Islands. Such genuine loopholes are worthy of attention by our politicians.



The economic reason to take a 30 per cent tax on the company income – income that belongs to the beneficial owners – at the level of the legal person is to stop the latter from protecting shareholders with income-tax rates above 30 per cent by holding back cash inside the ‘‘corporate veil’’. The legal person then distributes dividends to the beneficial owners and ‘‘imputes’’ the amount of company tax that was paid on their behalf (the attached ‘‘franking credit’’).

At this point, those with income-tax rates above 30 per cent are asked to pay more. What the company paid for you counts towards your income tax, and you pay the difference. A tax-exempt person with income from the same company also had 30 per cent of their income paid in tax.
Logic check: But we made this person tax-free for super income. We must therefore refund the tax paid on their income from this source.
Could there be a clearer example of fake news: repeating that tax wasn’t paid when clearly it was? This proposal amounts to the opposite of a ‘‘loophole’’. It is an ‘‘artifice’’ to raise the tax rate on company-sourced income. Confiscating this money from retirees (but not from other shareholders), while shifting the focus for unaffected voters – ‘‘anyway we will give the money to schools’’ – is sugar-coating discrimination between equivalent beneficial owners. It undermines property rights.
The only country in the world paying refunds?
Aside from the ridiculous logic here – other kids don’t do their homework so nor should I – only five OECD countries have imputation schemes: Australia, New Zealand, Canada, Mexico and Chile. So, the rest of the world is just four countries. Of these, only one – New Zealand – has tax-exempt draw-downs from super (the others tax draw-downs, so all credits are usable).
So, the rest of the world reduces to one. But New Zealand never had compulsory super and never gave refunds, so people were able to plan to ensure tax credits were usable for those in their voluntary system. Australia did allow refunds and self-managed super funds became large. Older Australians can’t now go back decades and re-plan their future. We will be the only country that has entrapped a new tax base and then changed the property rights to confiscate from them.
Rich people rorting the system
The Labor leader’s website says: “some funds are paying zero tax and collecting a $2.5 million cheque from the tax office”.

This old debating tactic of appealing to extremes works by shifting the premises to debating the truthfulness of the extreme rather than its representativeness. Let’s look at the ATO data on SMSFs instead (see the table).
The majority of SMSFs are not so rich after all. The ALP leader’s example can only come from a fund greater than $10 million. But such funds are only 0.7 per cent of the total. Slippery stuff.
A reality and an irony
The reality is that a couple with the median fund could take the median income and just make it to the end of their 80s. Labor’s policy will reduce their income by 15-25 per cent and they will make it only to their mid-80s. The irony is that wealthier people with advisers will avoid all this. There are many options: switch money into a pooled fund; add accumulation members to your SMSF; sell shares with capital gains and offset the capital gains tax with the imputation credits; and switch to non-equity products.
Labor’s policy will hurt the most vulnerable. Undermining property rights and confiscation is intolerable.
Adrian Blundell-Wignall is a former director of the OECD, an adjunct professor at Sydney University, and author of Globalisation and Finance at the Crossroads.

No doubt, the response will be another: look over there! A unicorn!

PS: I didn’t write this under someone else’s name like Morell does.

[shoe boy]

No doubt, the respons
e will be another: look over there! A unicorn!

And that would be Morrison riding his unicorn .

[Q.]

Adrian Blundell-Wignall is either stupid or being deliberately misleading. Again, using taxable income as the crux of his entire argument (and the crux of yours this whole time).

First, taxable income does not include the largest source of income for many retirees: superannuation.

Superannuation income (for fund balances of up to $1.6 million) is generally not subject to tax in the retirement phase, and is therefore excluded from taxable income.

Indeed, many relatively well-off individuals have low taxable incomes, particularly in the retirement phase.

In a submission to a House of Representatives inquiry, the Grattan Institute gave the following example.

“Take the example of a self-funded retiree couple with a $3.2 million super balance, plus their own home, and $200,000 in Australian shares held outside super. Even drawing $130,000 a year in superannuation income, and $15,000 a year in dividend income, they would report a combined taxable income of just $15,000 and pay no income tax whatsoever.”

Second, in a related sense, taxable income often has little to do with wealth.

For example, the Grattan Institute has estimated that, when superannuation withdrawals are pared out of income data for retirees, almost half of the “wealthiest” 10 per cent of people over 65 report incomes of less than the $18,200 tax-free threshold.

https://www.crikey.com.au/2019/05/08/franking-credits-fact-check/

And

Calculating refunds using tax bands and rules, I find that of the people with taxable incomes less than A$87,000 and with no pension income, 81% have no franking credits and receive no refund cheques. Their average taxable income is just below A$40,000 and their average superannuation balance is just below A$67,000.

A further 15% receive credits of less than A$1,300. Their average refund is A$102. Their average taxable income is also below A$40,000 and their average superannuation balance is almost A$179,000.

Of the 3% of individuals with credits between A$1,300 and A$8,000, the average cash refund is A$1,593. The average taxable income for the group is just over A$37,000 and the average superannuation balance is about A$363,000.

Of the 0.8% of individuals with credits between A$8,000 and A$20,000, the average cash refund is A$4,043. The average taxable income for the group is just over A$53,000 and the average superannuation balance is almost A$455,000.



Of the 0.1% of individuals with credits between A$20,000 and A$40,000, the average cash refund is A$8,743. The average taxable income for the group is just over A$68,000 and the average superannuation balance is just under A$721,000.

For the top group who have credits in excess of A$40,000, the average cash refund is almost A$63,000, over A$1,200 a week. The average taxable income for the group is the lowest of all groups at A$17,735, falling below the lowest income tax threshold. Almost half (45%) have no taxable income. Their average superannuation balance is A$1,344,782.

The results tell a clear story.

The largest average benefits are paid to the wealthiest group.

Their wealth measured by superannuation account balance is 20 times that of the group that receives no cash refund. Their superannuation wealth is 76 times their taxable income.

It is misleading it is to use their taxable income as a measure of their well-being.

https://theconversation.com/its-hard-to-find-out-who-labors-dividend-imputation-policy-will-hit-but-it-is-possible-and-it-isnt-the-poor-116370

[Trader]

[i]First, taxable income does not include the largest source of income for many retirees: superannuation.

Are you saying superannuation should be taxed on the way out?

Super is already taxed on the way in, why tax it on the way out as well?

That's clearly double dipping.

[Q.]

[i]First, taxable income does not include the largest source of income for many retirees: superannuation.

Are you saying superannuation should be taxed on the way out?

Super is already taxed on the way in, why tax it on the way out as well?

That's clearly double dipping.

Re-read it. It's not asking us to tax super income, it's pointing out that taxable income does not include super.

[Trader]

[i]First, taxable income does not include the largest source of income for many retirees: superannuation.

Are you saying superannuation should be taxed on the way out?

Super is already taxed on the way in, why tax it on the way out as well?

That's clearly double dipping.

Re-read it. It's not asking us to tax super income, it's pointing out that taxable income does not include super.

Ah, ok, I think I've got it now. You're saying by grouping on taxable income and then stating the impacts of the policy, it is appearing to hit low income earners, when in reality a large portion of these people are actually drawing substantial incomes, all be it, low (/no) taxable ones.

I assume you are comfortable with the super being tax free on the way out, just uncomfortable with using taxable incomes as the way of assessing the impacts of Bill's proposed changes?

[Q.]

[i]First, taxable income does not include the largest source of income for many retirees: superannuation.

Are you saying superannuation should be taxed on the way out?

Super is already taxed on the way in, why tax it on the way out as well?

That's clearly double dipping.

Re-read it. It's not asking us to tax super income, it's pointing out that taxable income does not include super.

Ah, ok, I think I've got it now. You're saying by grouping on taxable income and then stating the impacts of the policy, it is appearing to hit low income earners, when in reality a large portion of these people are actually drawing substantial incomes, all be it, low (/no) taxable ones.

I assume you are comfortable with the super being tax free on the way out, just uncomfortable with using taxable incomes as the way of assessing the impacts of Bill's proposed changes?

Bazinga

[Q.]

I did enjoy reading this transcript from last night:

"Who's your home affairs minister going to be?" asks Morrison
"We'll pick our ministers after the election" - Shorten, who then counters: "Are you going to have the same environment minister?"
"Yes."
"Well where is she?"

All the nutjobs have been locked away until May 18.

[Trader]

Ah, ok, I think I've got it now. You're saying by grouping on taxable income and then stating the impacts of the policy, it is appearing to hit low income earners, when in reality a large portion of these people are actually drawing substantial incomes, all be it, low (/no) taxable ones.

I assume you are comfortable with the super being tax free on the way out, just uncomfortable with using taxable incomes as the way of assessing the impacts of Bill's proposed changes?

Bazinga

Ok, so putting aside the argument of whom is most impacted by the changes, lets look at if the policy is 'fair' or not.

You've agreed (as most people do), that taxing super on the way out isn't reasonable. So there's no argument around if 0% is the correct tax bracket for superannuation in retirement mode.

Now, if we agree that 0% is the correct bracket, can you please explain why this income, which has been taxed at the 30% corporate rate, shouldn't be refunded so that it is taxed at the 0% rate we agree is reasonable?

[Q.]

Ah, ok, I think I've got it now. You're saying by grouping on taxable income and then stating the impacts of the policy, it is appearing to hit low income earners, when in reality a large portion of these people are actually drawing substantial incomes, all be it, low (/no) taxable ones.

I assume you are comfortable with the super being tax free on the way out, just uncomfortable with using taxable incomes as the way of assessing the impacts of Bill's proposed changes?

Bazinga

Ok, so putting aside the argument of whom is most impacted by the changes, lets look at if the policy is 'fair' or not.

You've agreed (as most people do), that taxing super on the way out isn't reasonable. So there's no argument around if 0% is the correct tax bracket for superannuation in retirement mode.

Now, if we agree that 0% is the correct bracket, can you please explain why this income, which has been taxed at the 30% corporate rate, shouldn't be refunded so that it is taxed at the 0% rate we agree is reasonable?

A company tax is not a withholding tax on behalf of shareholders.

Franking just means that the tax on dividends is done at the individual level rather than the company. This means that by definition if you receive a dividend with any franking at all, then you have paid tax already. It is not just an offset mechanism, it is actually a representation of tax that has been withheld.

[Q.]

I'll put it more simply, a company is a legal person with its own tax liability. A share holder getting a "refund" of tax paid by a different legal person is a rort.

[Trader]

A company tax is not a withholding tax on behalf of shareholders.

Franking just means that the tax on dividends is done at the individual level rather than the company. This means that by definition if you receive a dividend with any franking at all, then you have paid tax already. It is not just an offset mechanism, it is actually a representation of tax that has been withheld.

The bit in bold, (which I didn't bold), is exactly what I'm saying.

You agree they should pay 0% tax, but if their dividend comes with a franking credit, then they've already paid 30%. Why shouldn't that disparity be corrected?

If you argue that it shouldn't be, then why do individuals with tax brackets higher than 30% have to make up the difference?

I'll put it more simply, a company is a legal person with its own tax liability. A share holder getting a "refund" of tax paid by a different legal person is a rort.

It's not a rort at all.

Lets use an example.
A company makes $100m profit, pays $30m in tax, and has $70m left over.

Lets say it now pays $49m out in dividends, that come with $21m in franking credits.

These credits are passed on in the ratio 0.7:0.3

Under your proposal, no franking credit is passed on. So you get a situation where the company is still holding $21m in profit, and the full $30m in tax paid, meaning it has paid 59% tax (30/51).

If you don't pass the credits on to the shareholders, then the company should receive the refund, reducing their bill back to 15.3m (30% of 51m).

[Q.]

A company tax is not a withholding tax on behalf of shareholders.

Franking just means that the tax on dividends is done at the individual level rather than the company. This means that by definition if you receive a dividend with any franking at all, then you have paid tax already. It is not just an offset mechanism, it is actually a representation of tax that has been withheld.

The bit in bold, (which I didn't bold), is exactly what I'm saying.

You agree they should pay 0% tax, but if their dividend comes with a franking credit, then they've already paid 30%. Why shouldn't that disparity be corrected?

If you argue that it shouldn't be, then why do individuals with tax brackets higher than 30% have to make up the difference?

I'll put it more simply, a company is a legal person with its own tax liability. A share holder getting a "refund" of tax paid by a different legal person is a rort.

It's not a rort at all.

Lets use an example.
A company makes $100m profit, pays $30m in tax, and has $70m left over.

Lets say it now pays $49m out in dividends, that come with $21m in franking credits.

These credits are passed on in the ratio 0.7:0.3

Under your proposal, no franking credit is passed on. So you get a situation where the company is still holding $21m in profit, and the full $30m in tax paid, meaning it has paid 59% tax (30/51).

If you don't pass the credits on to the shareholders, then the company should receive the refund, reducing their bill back to 15.3m (30% of 51m).

Because under that system, instead of being taxed once (at either the company or the personal level) as was the original intention, company profits can escape tax altogether.