The Liberal Party - How long?

[Stan_Darsh72]

and my position outlines what happens to those that can't make use of franking and the flow on of wealth transferring away from the ordinary and the government to the wealthy

I cant make use of franking because franking has ****ed any chance of my generation owning a home.

 

[SBD Gonzalez]

yep!

essentially the company pays no tax, meaning there is no franking credit
then distribute the "return" (not the dividend) and thus the tax is paid by the recipient at the individual tax rate


There is little to no issue for multinationals as like in the past, they issue a range of securities that meet the needs of the investor (who consider tax such as franking and WHT).

All that happens is the government collects less tax and wealth shifts from the ordinary to the wealthy for providing a solution.

Well you'd better tell many of Australia's leading economists because they appear to have overlooked this.

 

[SBD Gonzalez]

and my position outlines what happens to those that can't make use of franking and the flow on of wealth transferring away from the ordinary and the government to the wealthy

Seriously, how many people can't make use of franking? Most people, most years, have a tax bill of some sort.

 

[Theseventhhamster]

What do you guys get out of engaging with power raid?

 

[FredLeDeux]

What do you guys get out of engaging with power raid?

Stupider by the post

 

[Kram]

I cant make use of franking because franking has f’ed any chance of my generation owning a home.

Mate please haha.

 

[Power Raid]

Seriously, how many people can't make use of franking? Most people, most years, have a tax bill of some sort.

I think you've just answered the major issue here in your own question and that is why make a change if we are causing so much damage for such a small proportion of people.

The issues are:
- government collects less tax
- removing franking undermines the all important marginal tax rates
- removing franking hurts the vulnerable such as those who lose their jobs, take unpaid maternity leave or have a serious accident
- the wealthy take a clip on the arbitrage such as preference shares
- wealth transfers from government and ordinary to the wealthy

 

[Number37]

The tax laws dictate how such instruments are treated for tax purposes. You can structure a preference share to be debt or equity for tax purposes depending on what outcome you want.

I think what Power Raid was suggesting is that companies would issue preference shares that were debt for tax purposes, so the shareholder still paid tax on the dividends at their marginal tax rate but the company would get a tax deduction for paying the preference dividend, which it wouldn’t get for an ordinary dividend. This would effectively mean the tax benefit of dividends shifted from the shareholders to the company.

Whether that would actually work would depend on a number of factors, but the thin capitalisation rules would make it difficult for most Aussie multinationals.

yep!

essentially the company pays no tax, meaning there is no franking credit
then distribute the "return" (not the dividend) and thus the tax is paid by the recipient at the individual tax rate


There is little to no issue for multinationals as like in the past, they issue a range of securities that meet the needs of the investor (who consider tax such as franking and WHT).

All that happens is the government collects less tax and wealth shifts from the ordinary to the wealthy for providing a solution.

You are referring to Subdivision 974.
(1) Your logic doesn't add up.
(2) Whilst it is true that the govt collects less tax, the govt saves roughly an equal amount in compliance monitoring.
(3) You'll have to explain how the "wealth shifts from the ordinary to the wealthy for providing a solution."

 

[Power Raid]

You are referring to Subdivision 974.
(1) Your logic doesn't add up.
(2) Whilst it is true that the govt collects less tax, the govt saves roughly an equal amount in compliance monitoring.
(3) You'll have to explain how the "wealth shifts from the ordinary to the wealthy for providing a solution."

please go back two pages and finally you are looking at tax rather than accounting or corps

 

[SBD Gonzalez]

I think you've just answered the major issue here in your own question and that is why make a change if we are causing so much damage for such a small proportion of people.

The issues are:
- government collects less tax
- removing franking undermines the all important marginal tax rates
- removing franking hurts the vulnerable such as those who lose their jobs, take unpaid maternity leave or have a serious accident
- the wealthy take a clip on the arbitrage such as preference shares
- wealth transfers from government and ordinary to the wealthy

But. I'm. Not. Talking. About. Removing. Franking.

 

[Number37]

what rubbish.....accounting standards do not govern preference shares

and neither the corps act or accounting standards will drive the renaissance of preference shares. Rather the efficient market will, in response to tax law changes.

AASB 132 and AASB 7 call bullshit.

If you're keen you can have a look at the the history of those 2 standards & how they precede changes to the tax act and you might even notice how the language in the tax act mirrors identically the language of those 2 standards. It's almost like the tax act changed to keep up with accounting standards.

Mum & dad investors are gunna lose out to the big end of town because they own so many preference shares.<-----that's a joke.

 

[Number37]

and my position outlines what happens to those that can't make use of franking and the flow on of wealth transferring away from the ordinary and the government to the wealthy

As you always do...state something then inevitably claim mum & dad investors are going to lose out, without actually making an argument.

 

[Power Raid]

But. I'm. Not. Talking. About. Removing. Franking.

same said for removing franking credit refunds

 

[Power Raid]

AASB 132 and AASB 7 call bullshit.

If you're keen you can have a look at the the history of those 2 standards & how they precede changes to the tax act and you might even notice how the language in the tax act mirrors identically the language of those 2 standards. It's almost like the tax act changed to keep up with accounting standards.

accounting standards do not impact franking, so it is about as relevant as my dogs age

so why are you still stuck on your mistake?

Mum & dad investors are gunna lose out to the big end of town because they own so many preference shares.<-----that's a joke.

again you've erred as the issue isn't the security. Rather the issue is the arbitrage that favours the wealthy and the misfortune of those who can't make the most of franking due to Labor's and the Green's attack on the all important marginal tax rate

 

[Number37]

accounting standards do not impact franking, so it is about as relevant as my dogs age

so why are you still stuck on your mistake?



again you've erred as the issue isn't the security. Rather the issue is the arbitrage that favours the wealthy and the misfortune of those who can't make the most of franking due to Labor's and the Green's attack on the all important marginal tax rate

Another word salad with the conclusion that something-something favours the wealthy & the poor miss out.

 

[Number37]

accounting standards do not impact franking, so it is about as relevant as my dogs age

as I'd suggest the difference between equity and liability is a pretty simple concept only made harder under IFRS...

...but IFRS (accounting standards) made the difference between equity and liability harder?
....or does equity and liability have nothing to do with franking?
....if equity and liability have nothing to do with franking then it wouldn't make any difference how preference shareholders are paid dividends, or is that only dependent on whether the shareholders are rich or misfortunate?

 

[Crankyhawk]

accounting standards do not impact franking, so it is about as relevant as my dogs age

so why are you still stuck on your mistake?



again you've erred as the issue isn't the security. Rather the issue is the arbitrage that favours the wealthy and the misfortune of those who can't make the most of franking due to Labor's and the Green's attack on the all important marginal tax rate

What’s the last half of that sentence referring to? High income earners who are paying higher marginal than company tax?
I’m not sure high income earner interests need protection, I’d like them to address issue of excess super contribution caps when it is purely due to employer mandated contribution exceeding cap.

 

[Power Raid]

What’s the last half of that sentence referring to? High income earners who are paying higher marginal than company tax?

thanks Cranky

The issue is the removal of franking refunds is it attacks the all important low income earners thresholds. This obviously doesn't impact the wealthy as they can fully utilise franking as individuals.

The arbitrage is the offering of securities, by institutions and the wealthy, to offer a security that does not have franking credits to the market and taking a clip for the service. This would be a wise investment for every individual (including super) to ensure maximum investment returns after tax.

I’m not sure high income earner interests need protection, I’d like them to address issue of excess super contribution caps when it is purely due to employer mandated contribution exceeding cap.

YES

If you only address franking, then you can still get around it with preference shares or other securities.

If you address the actual issue, being super, the actual issue is addressed with no loopholes or unintended consequences!


PS. this quirk in the super laws were important for a period, as many retiring did not have enough super due to the scheme being introduced to late in their lives and the contribution rate too low to start with. This was a little supercharge needed towards the end but unfortunately poorly executed by the authorities. This has to be removed as the need has gone and the clumsy rules are distorting our tax system.

 

[Power Raid]

...but IFRS (accounting standards) made the difference between equity and liability harder?

This is like teaching one plus one.......you either get it or you don't.

Please stop referring to accounting is it is irrelevant.

....or does equity and liability have nothing to do with franking?

Accounting classification of assets and liabilities have nothing to do with franking.

....if equity and liability have nothing to do with franking

To keep it simple, get equity and liability out of your head and look at the treatment of the distribution from a tax perspective

then it wouldn't make any difference how preference shareholders are paid dividends, or is that only dependent on whether the shareholders are rich or misfortunate?

Now your warm

What we are looking for in a distribution is whether the distribution is franked or not. If it is franked and an investor can't utilise all the tax credits, then there is a loss of full utilisation to the investor.

Thus entities who can not utilise 100% of their franking asset will need to recalibrate there portfolio and look for unfranked distributions. They can invest in offerings through tax havens such as BVI etc or more simply buy a security such as a preference share.

So please keep it simple and look at whether the distribution would be franked or unfranked and that means looking at tax rules relating to revenues and expenses (not accounting balance sheet treatment).

 

[HPKS]

Natalie Baini claims Liberal party ignored complaint about conduct of married Coalition minister

Exclusive: The former Liberal complained to Scott Morrison’s office and party leaders about Craig Laundy who she was in a relationship with

www.google.com.au

Like I’ve said previously. They ain’t getting the women vote. It’s a party of old men living in “the good old days”

 

[HPKS]

NSW Liberals impose target for female candidates in upcoming federal election

Half the Liberal candidates in NSW at the next federal election could be women after the party’s executive quietly set a target for recruitment.

www.google.com.au

A lot of women will see straight through this bullshit. It won’t work imo. Make it a party policy for every election and people might believe they’re serious about changing their 1950’s ways. Christ they really are a bunch of old men living in the past.

 

[Cyg1992]

NSW Liberals impose target for female candidates in upcoming federal election

Half the Liberal candidates in NSW at the next federal election could be women after the party’s executive quietly set a target for recruitment.

www.google.com.au

A lot of women will see straight through this bullshit. It won’t work imo. Make it a party policy for every election and people might believe they’re serious about changing their 1950’s ways. Christ they really are a bunch of old men living in the past.

Don't be surprised if it does work. The average Aussie voter isn't that smart and with the right amount of newscorp salad dressing they can sell anything to the 'quiet Australian'

 

[HPKS]

Don't be surprised if it does work. The average Aussie voter isn't that smart and with the right amount of newscorp salad dressing they can sell anything to the 'quiet Australian'

Imo news Corp can see the writing on the wall. Their articles over the last week have had a different tone to their normal stuff. They can see the bloodbath coming and will try to align with the ALP imo.

 

[Number37]

This is like teaching one plus one.......you either get it or you don't.

Please stop referring to accounting is it is irrelevant.



Accounting classification of assets and liabilities have nothing to do with franking.



To keep it simple, get equity and liability out of your head and look at the treatment of the distribution from a tax perspective



Now your warm

What we are looking for in a distribution is whether the distribution is franked or not. If it is franked and an investor can't utilise all the tax credits, then there is a loss of full utilisation to the investor.

Thus entities who can not utilise 100% of their franking asset will need to recalibrate there portfolio and look for unfranked distributions. They can invest in offerings through tax havens such as BVI etc or more simply buy a security such as a preference share.

So please keep it simple and look at whether the distribution would be franked or unfranked and that means looking at tax rules relating to revenues and expenses (not accounting balance sheet treatment).

Another word salad.

Strictly in relation to hybrid instruments...like preference/convertible shares...

An entity can pay a dividend to those hybrid instruments out of amounts that have been taxed, or out of amounts that haven't been taxed.
A dividend paid out of amounts that have been taxed have franking credits attached. <---this relates to the equity part of the balance sheet
A dividend paid out of amounts that haven't been taxed do not have franking credits attached. <--- this relates to the liability part of the balance sheet

 

[NSWCROW]

Is david van a wet or a delcon ?