The whole “franking credit” discussion is based on government smoke and mirrors ... go back to basics and forget the fancy terminology. Consider these scenarios:- A) My investment pays me a dividend of $1000. I add this to my taxable income and pay the relevant tax.
B) My investment declares a dividend of $1000 and the hungry government grabs $300 of it in case I skip town. When I show I’m an honest citizen earning less than $ 18000 or whatever they give it back with a friendly smile (in theory) since I’m not earning enough by their rules to pay tax.
C) As in B, but the Shorten government says we’ve got your $300 and we’re keeping it!
Now someone please explain where the rorting comes in ?? Seems to me it’s only in C and it’s not done by me!
Simplest and fairest option would be to do away with all advance taxation of dividends and let everyone pay their tax in the normal manner, and maybe save a few public servants churning money.
