So may people don't understand what Labor is proposing.
To understand this, firstly refer to the personal income tax tables:
Tax Rates 2017-2018 1 Taxable income Tax on this income
2 Rates 3 $ Zero - $18,200, NIL TAX
$18,201 – $37,000
19c for each $1 over $18,20019% 4 $37,001 – $87 000 $3,572 plus 32.5c for each $1 over $37,000 32.5% 5 $87,001 – $180,000 $19,822 plus 37c for each $1 over $87,000 37%
Just say you don't work, and you don't have any income from any other source, except you earned $18,000.00 per year in income from dividends of companies that you own (shares). If they are "Franked at 30%" that means tax has been paid on them already at 30%. This actually means that your dividends of $18,000, are taxed at 30% ($5,400.00 tax) and this tax is paid to the ATO by the company, and you receive the remaining cheque for $12,600.00.
Imagine if the company didn't pay that tax for you? then you would receive $18,000 instead.
At the moment, the personal tax tables show that any income an Australian receives should be tax free up until $18,200, and because of this, in the above example, you can claim back the $5,400 tax already paid.
Under Labor's new proposal, you can not.
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