Labor's Franking Credit Changes | Cause

Labor's Franking Credit Changes

Add/Update information

Reviews

Tags

• Community
• Cause

23.01.2022 Labor’s recent dumping of their franking credits policy ( if believed) is only about elections. That policy would be reinvigorated if many in Labor if they had their way. The biggest problem I think they have with the policy is that, no matter how they try to twist it, the ATO does not lose out in the existing system. It’s just simple arithmetic. The same amount of tax is retained by the ATO after any franking credit refund as it collects on any other non-dividend income w...hich is taxed outside the franking system. It would be very difficult to pursue the theft, rort, gift and loophole line of Shorten and Bowen. Albanese had no where to go. My guess is they will leave it a bit, Try to put lipstick on the pig of a policy and give it a go later. But their options will be limited now that their fake class war and politics of envy cards have already been played. I don’t think they are finished with franking credit refunds yet, and a sudden change to fcs, if Labor is elected would be the danger.

20.01.2022 When Labor say they won’t do something, that could be a sign they will. This means very little. https://www.sbs.com.au//labor-leader-dumps-franking-credit

18.01.2022 The tax retained by the ATO after a franking credit refund is the same amount of tax that would be collected on any income. So what's unique about that? The refund?... Irrelevant, since the same tax remains at the ATO as on any other income.

15.01.2022 One of the most telling shortcomings of Labor and the supporters of Labor’s franking policy is that in the 2.5 years since Labor announced the policy , they have been unable to show any loss of revenue which is attributable to franking credit refunds. The inescapable, and inconvenient reality for them is that the exact same amount of tax is retained by the ATO after any franking credit refund as it collects on any other income which is just taxed normally. Even when a share...holder has a government set tax rate of 0%, and no tax is retained by ATO after the refund, the result is still the same as for any other income taxed normally. No tax would be received by ATO on any other income either. With other types of income, such as interest, for example, no tax is ever paid by the paying company anyway, since the payment made is tax deductible. Against that background, none of the reasons put forward to deny franking credit refunds are valid, or carry any weight at all. None. Does Labor understand this? Probably. Will this understanding prevent them from reintroducing a similar policy in the near future? Definitely not ! Slow learners driven by policy of envy are very unpredictable.

13.01.2022 There is much support for Labor’s franking policy on Twitter, if you want to present our story, visit Labors franking credit changes on Twitter and get involved.

11.01.2022 Labor’s franking policy confirms the company tax paid on dividends belongs to the receiving shareholder by confirming franking credit tax offsets would continue under Labor. So ownership of the tax held at ATO is unquestionably the property of the dividend receiving shareholder.

10.01.2022 Currently, franking credits may be used to offset any tax, and excess franking credits are refunded. Labor will resurrect their policy to deny franking credit refunds, it’s only a question of when. Labor NOW claim Franking credits are ONLY to offset double tax on dividends... Currently Industry super and other funds use MOST of their franking credits to NOT PAY NON- dividend taxes. So if Franking Credit refunds are denied by Labor, would they dare apply the same principle to Industry funds, and limit franking credits ONLY to the tax on the dividend they came with? My guess is they would pander to the Industry funds and go after just us. Again. The inequity of denying fc refunds, but allowing fc offsets against NON DIVIDEND taxes MUST remain under the spotlight at all times. Otherwise our lost refunds would just go to help support the avoidance of payments of such taxes as member’s contributions, tax on rentals received, etc by Industry funds and others. I can’t quote actual figures, but the amount of non-dividend tax NOT PAID by superfunds using Franking credit offsets would make our refunds look like a rounding error.

09.01.2022 What if Labor’s denial of franking credit refunds gets up? Heaven forbid. But if it did, there are more changes than just that required to maintain some semblance of fairness.... Firstly, and most importantly, franking tax offsets should be quarantined in a way that franking credits could only be offset against the tax on the dividend to which they are attached. If refunds no longer exist, franking credits which are in excess of the tax incurred on the dividend should not be offset against other income. The fcs have served their, then, sold purpose, they eliminated double tax on the dividend. The practice of Large superfunds, such as industry funds using excess franking credits to NOT pay otherwise fully payable tax should be ended. For example, excess fcs should no longer be available to NOT pay tax on contributions, or other non dividend incurred tax. The exact same logic applied by Labor to end refunds applies equally to ending the practice of offsetting non dividend income against franking credits. All the franking credits should be fully expended once the tax on the dividend is offset. Whether this requires all the fcs, or only part of the fcs. They have done their job, and further offsets should be denied. The second major change should be that NO exemptions apply to the loss of refunds. Labor have complied a list of exemptions which should be abolished. Unions, and others, are exempt from losing their refunds? On what grounds? Back to Keating? No, no refunds existed under Keating’s policy. So, there is no basis for any exemptions, so there should be none. Obviously, the system is fairer the way it is, complete with refunds. But if those refunds go under Labor, the quarantine and no exemptions become mandatory by keeping FCs to the only purpose Labor admit they have: eliminating double tax on the dividend itself.

07.01.2022 In the nearly 2 years of this page I have not found anyone who can give us an example of where the ato retains less tax after a refund than it would have collected on the same amount of income taxed normally outside the franking system. The assumption must be that no body can. Therefore the claims still being made by Labor Lackeys that franking credit refunds cost the budget, or are a gift may be safely deemed bullshit ... https://www2.com.au/franking-cash-refunds-cost-the-budget-/

04.01.2022 Just reposting this. The article

02.01.2022 Finally a Twitter user inadvertently agreed with my claim that the tax retained by the ATO after ANY franking credit refund is ALWAYS the same amount of tax the ATO would collect on normal earnings. In this example, the tax retained after the "Under Costello" $1K refund is $9,000 which is exactly the same amount of tax the person pays "on their normal earnings". So the "Costello" scenario produces the desired outcome.... The "Keating" example clearly demonstrates that, by denying the cash refund, the person is OVERTAXED by $1,000. Point proven, the refund still results in the CORRECT tax being retained by the ATO.