Superannuation tax concessions on the block?

Discussion in 'Superannuation' started by JulieW, Feb 16, 2015.

  1. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,064
    Likes Received:
    3,292
    Trophy Points:
    113
    Location:
    Australia
     
  2. sammysilver

    sammysilver Well-Known Member Silver Stacker

    Joined:
    Apr 7, 2011
    Messages:
    7,925
    Likes Received:
    6,515
    Trophy Points:
    113
    Location:
    Sydney
    A valid savings policy, but it has to measured up against what it will pay for. I think spending waste should be addressed first. Foreign Aid, overseas company tax rorts, all the money being pissed up against the wall on ludicrous subsidies and handouts. You can not take future retirement investment from working people so that mismanaged spending can continue.

    Having said that, I know we have to reduce and ultimately end the deficit, and accept it has to be tackled at both ends by reducing the spending and increasing the income, but it has to be fair and transparent. The argument that it has to be increased from 15% to the marginal tax rate seems to leave out everything in between, why not just 20%? Will those low income workers not paying tax have it reduced to their marginal rate of 0%?
     
  3. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,606
    Likes Received:
    4,392
    Trophy Points:
    113
    -1 to that article JulieW.

    I try not to attack the personal credibility of those putting forward a case, but sometimes it's hard to ignore. Especially when a career bureaucrat argues in favour of protecting her own job that is paid for using other people's money that is taken from them without consent or choice.

    The average family weekly income in Canberra is higher than any other capital city in Australia, government employees are obviously overcompensated for the goods they produce. Poor old Ms Halton, she actually believes governments can be efficient as well.

    Re: Allan Jones, (who is an economic fool) and the notion that tax concessions is revenue that is waived is absolutely ridiculous. If we were to follow that line of logic then raising all income tax rates to say 75% would be justified because to not do so would be to exempt earnings that the government is entitled to collect. The topic of tax concessions and the erroneous understanding that it is a cost has been beaten to death on this forum previously.

    And he doesn't pay 48c/$ tax anyway - hasn't he heard of a progressive tax rate???????????

    Didn't we have that with the Mining Tax? Or when we introduced the GST? No, I think it was CGT. Hang on, or was it when they decided to collect Income Tax on a permanent basis?

    Maybe Martin is right? Superannuation ticks all the boxes, it will be able to provide a huge income stream allowing the Feds to balance their budget books - for now. :/
     
  4. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

    Joined:
    Oct 30, 2009
    Messages:
    6,278
    Likes Received:
    186
    Trophy Points:
    83
    Location:
    Sydney
    Alan Jones is right (and fortunately my head didn't just explode from typing that) - he doesn't need such a large concessional tax rate on his super.

    Personally, I think people should get a concessional tax rate on the money being put aside for their retirement. Some of it comes from foregone pay rises, but more importantly the more capital they can build up, the greater the compounding effect is.

    The way the discounted rate is calculated right now is ridiculous. On the one hand you've got people earning under $18,000 paying no tax in income but paying 15% on super contributions. They're actually worse off putting extra money aside for their retirement than if they just kept or spent it all. On the other hand you've got people like Jones putting in as much extra as they can to drop their tax rate from 48% to 15%. When you get to his sort of income level, chances are you're going to be doing pretty nicely in retirement whether you get the concessional rate or not.

    The bleeding obvious solution is to set the concessional rate at x percentage points under the marginal tax rate (e.g. minus 1000 basis points) so the super tax rate is also progressive like the income tax rate is.

    For example:

    $0 - $18,200 = 0% on income, -10% on super (a simple replacement for the low income super co-contribution)
    $18,201 $37,000 = 19% on income, 9% on super
    $37,001 $80,000 = 32.5% on income, 22.5% on super
    $80,001 $180,000 = 37% on income, 27% on super
    $180,001+ = 45% on income, 35% on super
     
  5. lurk@l0t

    lurk@l0t Active Member

    Joined:
    Nov 29, 2013
    Messages:
    518
    Likes Received:
    79
    Trophy Points:
    28
    Location:
    AuSS
    Super is nothing more than an extra tax - just like the Medicare Levy - and anybody who contributes more to it than is mandated in state theft tax legislation needs their bluddy head read! :lol:
     
  6. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,606
    Likes Received:
    4,392
    Trophy Points:
    113
    Big A.D., why does every post you write about governments/tax/wealth etc involve taking more from those who earn more and distributing it to those who earn less? Now if that doesn't sound like socialism I don't know what does.

    Edit to add: and what you fail to understand is that there will always be a shortfall between government revenue and the government's/electorate's/corporate crony's/Union's/media's desire to spend the taxpayer's hard earned and stolen $$.

    Why? Please try to justify this statement without making any appeals to false notions such as "for the good of the country" or "if we all value equality" etc etc. It's only obvious if you believe government's have a right to take and distribute the earnings of individuals.
     
  7. lurk@l0t

    lurk@l0t Active Member

    Joined:
    Nov 29, 2013
    Messages:
    518
    Likes Received:
    79
    Trophy Points:
    28
    Location:
    AuSS
    I thought it was perfectly obvious... Isn't he the head-commie/socialist on this blog?? :lol:
     
  8. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,064
    Likes Received:
    3,292
    Trophy Points:
    113
    Location:
    Australia
    Daily Reckoning today:

     
  9. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

    Joined:
    Oct 30, 2009
    Messages:
    6,278
    Likes Received:
    186
    Trophy Points:
    83
    Location:
    Sydney
    Yes, well, I was naively assuming that we're beyond the childish questions about whether we should have a government and a taxation system. We have and we do. The budget that pays for all the stuff we need and want needs to be sustainable over the long term. Currently, it is not.

    As Alan Jones himself said, he doesn't need tax breaks to the extent that he's getting now. In fact, he's doing very nicely for himself thank you very much.

    And no, I don't think super contributions should be taxed at regular income rates. The trade-off for not being able to spend the money now is that you don't get taxed as much. There should be a reward for delaying gratification.

    Like I mentioned above, people should get a discounted rate on their super, but the way we calculate the discount at the moment is silly - some people get way more of a discount than they need and others who need all the help they can get preparing for their retirement are actually penalized for saving.

    That's just inefficient.
     
  10. AngloSaxon

    AngloSaxon Active Member

    Joined:
    Oct 26, 2012
    Messages:
    1,779
    Likes Received:
    6
    Trophy Points:
    38
    Location:
    Sydney
    Articles like this just attack people who know what the rules are and have played within the rules to their benefit. Much like the plethora of SMH/Age/Guardian/ABC articles arguing for the end of lump-sum retirement payments to force everyone into long-term regular pension payments. As people who get lump sums know that using that to pay off any remaining mortgage will let them still get a pension - which is entirely playing by the rules as they are set. And, people know best how to spend their own money, which the central planners and wannabe-central planners hate.

    What is argued here will make saving in superannuation more costly as it will become even more complex to administer. Who believes that changing the rate of concessional tax will be the limit? One of the beautiful things about superannuation is its' flat tax, within well publicised limits. 15% tax on concessions, 15% tax on investment income, with the exception of capital gains on investments held over 1 year that has a lower rate.

    Change the tax on contributions today, and a change to the investment income tax rates is the next logical step for the looter commentators to argue for the thieves in the government tax departments to implement.

    Today, a SMSF with 4 members may receive a $4000 dividend. Less one tranche of 15% tax ($600), the remaining $3400 is apportioned to the members according to their share of capital in the fund. In future, if Members 1-4 are all on different personal tax rates that need to be accounted for in their super, which is inevitable in the real world, the trustee has four calculations to make to generate the investment tax payable, and apportion that $4000 less four separate tranches of tax into four tranches of apportioned income to the members.

    Annoying while achievable at my SMSF level, but imagine how many more actuaries the big super funds will need to employ when they receive $4 million dividends that need to be divided amongst 500,000 members all taxed across the income tax rate spectrum, further complicated by the dozen risk classes that most funds now employ.

    At the end of this comment I'd like to say I'm thinking big picture here - I just foresee the whole system becoming more complex, costly, with less money left for actual retirement of members.
     
  11. SpacePete

    SpacePete Well-Known Member Silver Stacker

    Joined:
    Mar 1, 2014
    Messages:
    12,433
    Likes Received:
    40
    Trophy Points:
    48
    Australian superannuation is simply legalised theft designed to benefit financial industry funds and to transfer wealth from future generations.
     
  12. AngloSaxon

    AngloSaxon Active Member

    Joined:
    Oct 26, 2012
    Messages:
    1,779
    Likes Received:
    6
    Trophy Points:
    38
    Location:
    Sydney
    So start a self managed fund and take control of your own and your families' future.
     
  13. lurk@l0t

    lurk@l0t Active Member

    Joined:
    Nov 29, 2013
    Messages:
    518
    Likes Received:
    79
    Trophy Points:
    28
    Location:
    AuSS
    that wont help you one bit! my situation is a case in point.
    The scum sucking guvmunt keeps changing the super laws and moves the money further away from you with each stupid new law they pass.
    I cant touch my super until I'm 60, and the barstads will no doubt keep pushing that age up and up and up as time goes by.
    Gen X and Y will NEVER see one cent of their super!
     
  14. AngloSaxon

    AngloSaxon Active Member

    Joined:
    Oct 26, 2012
    Messages:
    1,779
    Likes Received:
    6
    Trophy Points:
    38
    Location:
    Sydney
    That is entirely the point. Your point of view seems limited to today. There is more to life than right now. Take that to heart, GenX/Y/Z's.
     
  15. SpacePete

    SpacePete Well-Known Member Silver Stacker

    Joined:
    Mar 1, 2014
    Messages:
    12,433
    Likes Received:
    40
    Trophy Points:
    48
    Exactly what I am thinking of. Gotta get off my butt and do something about it. What's the first step? Where do I start?
     
  16. Caput Lupinum

    Caput Lupinum Well-Known Member Silver Stacker

    Joined:
    Jun 18, 2012
    Messages:
    4,656
    Likes Received:
    72
    Trophy Points:
    48
    Location:
    NSW
    Esuperfund
    Clear Docs
    ASIC
     
  17. whinfell

    whinfell Well-Known Member Silver Stacker

    Joined:
    Mar 22, 2012
    Messages:
    3,327
    Likes Received:
    174
    Trophy Points:
    63
    Location:
    Australia
    Courtesy of bloomst :) Setting up my SMSF, Q&A
     
  18. sammysilver

    sammysilver Well-Known Member Silver Stacker

    Joined:
    Apr 7, 2011
    Messages:
    7,925
    Likes Received:
    6,515
    Trophy Points:
    113
    Location:
    Sydney
    Talk to me.
     
  19. AngloSaxon

    AngloSaxon Active Member

    Joined:
    Oct 26, 2012
    Messages:
    1,779
    Likes Received:
    6
    Trophy Points:
    38
    Location:
    Sydney
    A relative is with Esuperfund with a reasonably large portfolio including a few properties owned outright and it suits his purposes.

    I used ClearDocs: https://www.cleardocs.com/ doing it myself, and never looked back.

    Read Bloomst's guide and scan through the collected threads on this forum and what is on http://www.aussiestockforums.com

    I read through everything I could online for about a month before I started, so I understood what I was getting myself and my family into.

    I've recommended here before, also get one or two books on SMSF's and SMSF operating. As long as the book is relatively recent, or a new edition of a long established book, it is a good reference to answer questions of things you don't have any success in googling.

    Also, start to think about other investments than bullion, such as what are called 'blue chip' shares.

    Good luck and use the forum to ask any question.
     
  20. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,606
    Likes Received:
    4,392
    Trophy Points:
    113
    I see, it's childish now to question the legitimacy of an organisation that has no contractual agreement with anyone and enforces their authority utilising a legislative system that is self-beneficial????? :rolleyes:

    That's great that Alan doesn't need the tax breaks. But that's not the point, I don't need to drink but I do, the bloke across the road didn't need to buy 2 new cars but he did, my sister didn't need to go on holidays to HK last year but she went anyway. It's got nothing to do with need because it's got all to do with freedom and protection of property.

    Just because I drink doesn't mean I think everyone else should, just because I don't need 2 new cars shouldn't mean the bloke across the road shouldn't buy 2 new cars and just because Alan or Big AD don't need concessional tax breaks doesn't mean Alan or Big AD can dictate to others what they need.

    And every time I hear a socialist (you, Phransisku, peter etc) talk about what others need or don't need I ask the same question - Who decides what others need and what specific basic level of needs are required?
     

Share This Page