Originally posted by Gindaldan
you do realise that the USA taxes dividends at a flat rate and that is much lower than our highest effective tax rate of 46.5%? A lot of other countries without franking credit refunds tax dividends at 15% flat rate, so regardless if I earned $10 or $10billion it would be taxed at that rate?
So actually, in other countries these measures benefit the rich, not the lower middle or lower class who hold a tiny amount of shares.
The rich are not effected by labor’s policy, myself included as my income is well over the top tax bracket and will even be so in retirement. I feel for those who worked hard and needed that refund for retirement. Now being forced to pay 30% tax if they earn as little as $10k. That is unfair, a PAYG earner would get that money back and pay no tax.
lastly, if instead of a PTY LTD company, all these companies were unit trusts, then tax would be paid at the beneficiary level, as our tax system intends. So instead of a $70 dividend with a $30 franking credit refund for a low income earner, you’d receive the $100 straight out as the trust makes it so the beneficiary pays the tax, not the entity.
I’m an ex tax accountant, you clearly have nfi how tax is intended to work in this country. It’s not a tax scam, it’s paying tax at the ultimate recipient level.
I’m all for a USA based system of a flat tax rate on dividends, i would benefit handsomely from it. However I’m not asking for that, I’m more concerned for those who work hard and have a modest amount. Labor just wants to give the unemployed leaners more money for nothing.
You haven't addressed the argument that Australia is the only country to offer cash refunds. Not that I was advocating the US system (you missed the point), but you have overlooked the fact that the US taxes dividends twice, once from the profits of the company paying them and again in the hands of the recipient. You haven't addressed the argument that the only people adversely affected are those paying no tax. As an ex tax accountant you might try to do better at constructing a logical refutation of my argument, because any fool can hurl abuse.
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