Name a Conservative Success Story

[kranky al]

You’re living in the past. It’s no longer legal to have the double Irish Dutch sandwich. You just have a view that big corporates pay no tax despite any evidence presented to the contrary.

I quite literally posted an article showing how little an effect the legislation will have.

 

[Captivating]

I quite literally posted an article showing how little an effect the legislation will have.

Legislation enacted plus the Govenments funded Tax Avoidance Taskforce has broight in $23 billion in tax over five years.

Tax Avoidance Taskforce | Australian Taxation Office

Tax Avoidance Taskforce's role and results in ensuring multinationals and large businesses pay the right tax.

www.ato.gov.au

As I said, you have view that big business pays no tax despite evidence to the contrary

The ATO estimate that large business pay 95% of the tax they are supposed to. Compare that to 87% for small business.

Latest estimate and trends | Australian Taxation Office

www.ato.gov.au

 

[Captivating]

That doesn't say what you think it does.

Yes it does. Franking credits are included as assessable income - despite you thinking they aren't

 

[Captivating]

You keep parroting the definition of franking credits.
That's not what I asked.
Try to answer the question. Stop parroting.

Here's another scenario for you to consider...
I am paid net income, income - tax.
Out of my net income, I pay a tradie $5000 for a job.
i.e. the $5000 I paid the tradie has already been taxed.

2 questions:
1/ Why can't the tradie claim a franking credit for the $5000 income and thereby reduce her tax burden? (double taxation 'n all)
2/ Why TF are you allowed to claim a franking credit when you get a dividend from a company?

Worse than just being able to claim a credit, franked dividends allow an individual to get a tax refund, in cash, on tax someone else paid.
How is that not complete BS??????????????????????????????????????????????????

I'd like to read your justification.
Tell us why that should be allowed.
NB: the double taxation argument doesn't fly.

Dividend imputation removed previously existing distortions which provided incentives for debt financing. Interest is deducted from corporate income and therefore is only taxed once, when received at the personal level. During the 1980s many Australian corporations became highly leveraged due in part to a tax bias in favour of debt financing. Interest payments are deducted out of pre-tax profits, whereas dividend are taxes from post-tax profits. Interest is taxed once - in the hands of the interest income recipient. Dividends would be taxed twice - in the hands of the company and then in the hands of the dividend recipient.

 

[SBD Gonzalez]

Dividend imputation removed previously existing distortions which provided incentives for debt financing. Interest is deducted from corporate income and therefore is only taxed once, when received at the personal level. During the 1980s many Australian corporations became highly leveraged due in part to a tax bias in favour of debt financing. Interest payments are deducted out of pre-tax profits, whereas dividend are taxes from post-tax profits. Interest is taxed once - in the hands of the interest income recipient. Dividends would be taxed twice - in the hands of the company and then in the hands of the dividend recipient.

Fine but how did we go from the previous sensible arrangement- where dividends are untaxed, because the tax has already been paid by the company - to this madness we have now, where dividends can actually be a tax refund when the shareholder paid no tax in the first place.

I think, stripped of all the Murdoch-generate hysteria, most voters would agree the former situation was fair and reasonable, the current situation is a rort.

 

[Captivating]

Fine but how did we go from the previous sensible arrangement- where dividends are untaxed, because the tax has already been paid by the company - to this madness we have now, where dividends can actually be a tax refund when the shareholder paid no tax in the first place.

I think, stripped of all the Murdoch-generate hysteria, most voters would agree the former situation was fair and reasonable, the current situation is a rort.

So you want to remove the benefit to low income people, so only the wealthy can benefit from dividend imputation.

You are basically saying that, if your employer withholds too much tax, too bad, no refund for you. Thats exactly what’s happening here. The company has withheld too much - their 30% tax rate was higher than the individual. You don’t want the individual to get that tax back.

An alternative would be for businesses to withhold tax based on the individuals marginal tax rate. But that would be administratively prohibitive, It's easier for the company to withhold a flat rate and let the individuals deal with their own tax affairs.

 

[HairyO]

Where do we sit on the GST?

Should it be higher?

15% and FAR better enforcement of tradies, retailers and other dodgy cash in hand groups would be fine as long as we compensated the lower end.

Old school would be removal of the White Australia policy which Labor and the unions especially loved, and letting in the Vietnamese boat people Whitlam refused to allow here.

 

[Captivating]

Fine but how did we go from the previous sensible arrangement- where dividends are untaxed, because the tax has already been paid by the company - to this madness we have now, where dividends can actually be a tax refund when the shareholder paid no tax in the first place.

I think, stripped of all the Murdoch-generate hysteria, most voters would agree the former situation was fair and reasonable, the current situation is a rort.

Most voters don't understand tax. You see it on here and in ticktok with people complaining about their lower refund because of the removal of LMITO. SO using voters to determine if something is a rort is no better than Murdoch generated hysteria - in fact, worse.

 

[HairyO]

Fine but how did we go from the previous sensible arrangement- where dividends are untaxed, because the tax has already been paid by the company - to this madness we have now, where dividends can actually be a tax refund when the shareholder paid no tax in the first place.

I think, stripped of all the Murdoch-generate hysteria, most voters would agree the former situation was fair and reasonable, the current situation is a rort.

Albo was absolutely gutless when he said it would never be a Labor policy to fix this. Its a rort and has simply no place in our tax system.

Full and partial Age pensioners should be excluded now but it phased out for everyone except full Age pensioners over 5 years - to reduce the impact on people who had planned on it for retirement. Maybe phased over 10 years for full Age penaioners.

Find other investments which arent a rort.

 

[Captivating]

Albo was absolutely gutless when he said it would never be a Labor policy to fix this. Its a rort and has simply no place in our tax system.

Full and partial Age pensioners should be excluded now but it phased out for everyone except full Age pensioners over 5 years - to reduce the impact on people who had planned on it for retirement. Maybe phased over 10 years for full Age penaioners.

Find other investments which arent a rort.

as the biggest recipients are super funds, it affects everyone’s retirement. We are ALL planning on it for our retirement.

 

[HairyO]

as the biggest recipients are super funds, it affects everyone’s retirement. We are ALL planning on it for our retirement.

And most of us have decades to adjust. We dont know what income taxes will be. We dont know how super will be taxed. This is no different.

Its bad tax policy and should be removed but one side wants it and the other side is too gutless to go near it.

 

[Captivating]

And most of us have decades to adjust. We dont know what income taxes will be. We dont know how super will be taxed. This is no different.

Its bad tax policy and should be removed but one side wants it and the other side is too gutless to go near it.

Hypothetical : I’m retiring in 3 years. Do I have time to adjust? What about 5 years? What's the cut off?

please explain why it is bad to get a refund when too much tax has been paid?

 

[HairyO]

please explain why it is bad to get a refund when too much tax has been paid?

No tax was paid and you get a refund anyway.

That is the issue.

The govt is giving money for nothing.

 

[SBD Gonzalez]

Most voters don't understand tax. You see it on here and in ticktok with people complaining about their lower refund because of the removal of LMITO. SO using voters to determine if something is a rort is no better than Murdoch generated hysteria - in fact, worse.

Nah that in itself is a pretty desperate interpretation.

The Australian sense of a fair deal is an actual thing.

Shorten’s proposed changes for the most part simply returned us to the sensible system that existed to no-one’s alarm for - what, a decade or more? (can’t remember which govt actually brought in dividend imputation) - before Costello ran riot. And I think if what he was proposing had been truthfully presented for what it was - namely, ironing out a distortion that overwhelmingly benefited a select few, which would have next to zero consequence for the vast majority - they would have supported it. But the big end of town guard their entitlements ferociously.

Anyway I’m done with this little dividend diversion. Let’s get the discussion back to the repeated failure of Conservative actions to bear a resemblance to Conservative talk.

 

[SBD Gonzalez]

No tax was paid and you get a refund anyway.

That is the issue.

The govt is giving money for nothing.

I suspect Old Mate thinks the notion that the company is nothing but the shareholders works in reverse too.

 

[Captivating]

No tax was paid and you get a refund anyway.

That is the issue.

The govt is giving money for nothing.

No tax was paid? What do you mean? Tax was paid - it was withheld by the company. If the individual has a lower marginal rate, they are entitled to get that tax returned.

 

[Cap]

15% and FAR better enforcement of tradies, retailers and other dodgy cash in hand groups would be fine as long as we compensated the lower end.

Old school would be removal of the White Australia policy which Labor and the unions especially loved, and letting in the Vietnamese boat people Whitlam refused to allow here.

I have zero idea what relevance these two statements have to each other.

 

[SBD Gonzalez]

No tax was paid? What do you mean? Tax was paid - it was withheld by the company. If the individual has a lower marginal rate, they are entitled to get that tax returned.

Why? Just because the company is the shareholders doesn’t mean the shareholder is the company.

 

[Captivating]

Why? Just because the company is the shareholders doesn’t mean the shareholder is the company.

The role of dividend imputation is explained above. It's to remove the benefit of debt finance over equity finance.

 

[HairyO]

I have zero idea what relevance these two statements have to each other.

One was a comment on the GST, the other was a comment on old Conservative success stories - as per the thread title (GST also being a success story).

No tax was paid? What do you mean? Tax was paid - it was withheld by the company. If the individual has a lower marginal rate, they are entitled to get that tax returned.

By the individual. Also, the changes were to stop the dodgy practices companies have been using because of flawed legislation. It was not intended to be used the way it is now being used. They just worked out a way.

 

[Captivating]

One was a comment on the GST, the other was a comment on old Conservative success stories - as per the thread title (GST also being a success story).



By the individual. Also, the changes were to stop the dodgy practices companies have been using because of flawed legislation. It was not intended to be used the way it is now being used. They just worked out a way.

What dodgy practices and what flawed legislation?

 

[Cap]

One was a comment on the GST, the other was a comment on old Conservative success stories - as per the thread title (GST also being a success story).

To be honest I'd never really looked who got rid of it.

Fact check: Did former prime minister Harold Holt abolish the White Australia policy?

Liberal MP Tim Wilson claims that former prime minister Harold Holt was responsible for abolishing the White Australia policy. RMIT ABC Fact Check finds that claim to be simplistic.

www.abc.net.au

It appears both parties did the work, Good old Holt started it.

By the individual. Also, the changes were to stop the dodgy practices companies have been using because of flawed legislation. It was not intended to be used the way it is now being used. They just worked out a way.

I agree with you on this.

 

[SBD Gonzalez]

The role of dividend imputation is explained above. It's to remove the benefit of debt finance over equity finance.

So explain that to the average punter, because right now I think if the average punter realised how little this affects them on the one hand, and how on the other hand it's mostly exploited by those holding substantial share portfolios they would agree it stinks.

(I already disclosed I am a beneficiary of franking credits, and I think it stinks. I'll continue to benefit from them as long as they exist; I'm not crazy, but I would be more than happy to see things returned to the former sensible situation of tax free but not a tax refund.)

 

[SBD Gonzalez]

The role of dividend imputation is explained above. It's to remove the benefit of debt finance over equity finance.

And do you or do you not agree that just because the company is the shareholders, doesn’t mean the shareholder is the company?

 

[Captivating]

And do you or do you not agree that just because the company is the shareholders, doesn’t mean the shareholder is the company?

I don't understand what you are getting at here. They are separate legal entities. The company is not its shareholders. Shareholders come and go. Hence why its impractical for the company to know each shareholder's marginal tax rate and adjust the dividend accordingly. Similarly the shareholders are not the company. They own an equity interest.