PM attacks franking credits crackdown, page-16

You clearly have no idea so I will explain it to you.

Lets say your sister is a self funded retiree earning an income from super. She is invested in company A who posts a profit and issues a dividend with franking credit. Company A has paid the company tax rate of 30% on its profits.

Your sister pays $0 as income from super is not taxable income. The current system allows your sister to receive a franking credit refund from the government to her marginal tax rate (0%). This means the company has paid 0% tax on those profits because your sisters marginal tax rate is lower than the company tax rate. So NO tax is now being paid on these profits, and your sister has received a tax refund from the government despite paying NO TAX.

How the system originally worked before Howard decided to change it was that only shareholders who paid enough tax to offset could actually get a tax refund. That is, someone who paid a marginal tax rate higher than the company tax rate (30%) could reduce their tax paid on their dividends down to the company tax rate, thus the profits not being taxed twice.

So no, your sister has not over paid tax, she has paid no tax and received a refund for it. Only people who pay more tax than the company tax rate should fairly be able to utilise franking credit refunds, otherwise the policy is absurd.