Hi, i promised myself i wouldn't go back down this rabbit hole again , but here goes. Cutty has it wrong. This is due to a basic misunderstanding of what franking credits are , and what they are supposed to do. The major anomalies that arise from franking credits occur because there are too many entities on zero, or very low tax rates , that shouldn't be there. As you rightly point out , there is no equity in a real low income earner, paying the same tax on their share of the company profits as someone with a much larger income. But of course , if I get 150k per year out of my super , tax free , I shouldn't get all my franking credits back either.
The cart before the horse , playing with limts on refundibilty of credits is tinkering with the cart when the problem is with the horse. The 20k limit partially redresses the problem , but raises its own difficulties. Think about public super funds?
Now , in saying all this , this measure is aimed at closing an out and out rort , and has virtually nothing to do with the old bowen/shorten measure , no matter how much both the loony right or left would like it to be. cheers
