Coalition’s plans for low income taxpayers
I support Robert Gottliebsen's opposition to the Federal Government's almost compulsive desire to fiddle with superannuation rules to find ways of gaining more tax revenue, and in doing so, creating disincentives for people wanting to fund their retirement independently (China and super: Big changes afoot, February 8). For example, at 51, with insufficient savings in superannuation (partly thanks to the global financial crisis), I'm extremely frustrated by the $25,000 limit on pre-tax contributions.
However, I would like Robert to also focus on the Coalition's intention to abolish the low income tax benefit for taxpayers earning below $37,000 per annum. I believe this Coalition policy deserves greater scrutiny than it has gotten. On the surface at least, it appears harsh and more worthy of my concern than the potential difficulties of people with $1 million or more in superannuation.
Politicians and retirement
Further to the letter from J Church (Letters of the Week, February 6), can you confirm that the deluge of possible taxes and restrictions on superannuation and pensions being "response tested" by politicians will impact on their own retirement plans?
It seems highly unfair that a group proposing changes to the retirement plans of ‘normal Australians' are not impacted by the same changes. Should this inequity be the focus of a lobby group?
Labor flies the kite
I appreciate Alan Kohler's comment that Labor is flying a kite to test public reaction (Gillard's super tax plan, February 5). What can be done to 'kill the kite' before it gets out of control?
Super talk is unfounded hype
I read with interest the reaction of many commentators about the Government’s assumed proposals to make changes to the superannuation tax position. To a large extent I consider these comments unfounded hype, since no policy has been declared to date. Many are basing their opinions on the media’s coverage of the issue, while reporters are seemingly trying to rise above the process of democracy and pass judgements, which are at best the creation of the “me” generation.
Superannuation should not by any rational analysis be used as a vehicle by the very well off to avoid paying any tax to this nation whilst enjoying the benefits that it offers. The “fair go” principle is absent from many criticisms, and nowhere is there a consideration for what should be a reasonable untaxed income for a single person or a married couple in retirement. Once this benchmark is determined, the super capital limits that would assure this level of income based the equivalent interest rate of long-term government bonds or the swap rate plus inflation can be set.
A benchmark of this nature would establish, say, a capital base of close to $2 million and an untaxed income of $100,000. Anything above these levels of capital and income should be taxed on a sliding scale. Anything below should be tax free.
The commentators are missing a critical point. The argument is not about paying or not paying tax. It is about the benchmarks that should be set before tax must be paid.
This must be the focus because we all have a responsibility to support our nation so that we don’t end up like Greece where the “me” mentality has killed the goose that laid the golden egg.
Gillard’s super tax
I strongly disagree with the comments from Alan Kohler and James Kirby regarding the Government's tax proposals (Gillard's super tax plan, February 5). Superannuation allows people with wealth assets to build a bigger nest egg for their retirement, but it is just one part of the progressive taxation system this country has had in place for many decades.
Older people with or without a large SMSF cost the community more, but in many cases pay no tax. My wife and I pay no tax on the earnings in our SMSF or on the earnings we have outside our super. We have much more than the $1 million you talked about.
A small adjustment to taxation rules for people like us would provide more funds for public transport and hospitals, the two items older people need more of.
The Federal Government has already made cuts to quite a few programs as it tries to increase tax revenue in the face of lower goods and services tax (GST) and company tax as a result of the GFC.
For you to take the line that revenue falls don't need to be addressed so that wealthy SMSFs can avoid tax is a great shame. Surely you should be looking at the complete picture and not just siding with your members.
Bruce Brammall can't be seriously implying a fund threshold of $1 million with 6% return for taxability (Inside Labor's super tax plans, February 6). A $1 million fund invested in speculatives might have zero income. He's talking about taxing presumed income.