Clearly the ‘Brain Drain’ applies to Tristan. Your brain is clearly drained if you can write such nonsense. ‘Superannuation is tax free and imputation a negative tax’. What strange drug have you been taking?

This is how it works with imputation. The shareholder gets a credit for the tax paid by the company on their shares. If your marginal tax rate is 30% and the company paid a fully franked dividend, then no more tax is payable by the shareholder. Super funds pay tax at 15%, so they get a credit for the extra tax paid by the company.

Under the old system favoured by Tristan, dividends were taxed twice, firstly in company tax and secondly in individual income tax. Typically, the government took 75% of the dividend in tax. Consequently dividends and company tax receipts were small and tax avoidance was big time. Imputation was an important reform introduced by the Hawke government.

Capital Gains: CGT concessions cost the government nothing, instead it encourages investment. The tax regime proposed by Tristan would make nearly all investment in real estate uneconomic. The effect of inflation is very real over the long term and coupled with a high tax rate would cause a mass exodus from real estate investments. Probably most people would just invest in their own home until Tristan decides to tax that as well.

Tristan makes some good points. I am suspicious of calls to lower the top income tax rate even though I would benefit. If it is to be contemplated it should be paid for by reducing 'middle class welfare', and increasing other wealth taxes like CGT and reigning in negative gearing. I'm a residential property investor myself and have benefited from both CGT and NG, but I fail to see what benefit these tax regimes have had for the economy or society generally. And, similar to another poster, I would like to see the pie grow. But at present that would seem to mean just digging up or chopping down more of Australia to be shipped of to China & Japan to return in the form of global warming. Smart ways to grow the pie - now there's a good topic for online opinion.

re: capital gains tax and inflation - the problem you suggest could be tackled by reintroducing indexation as an alternative to the 50% tax free status.

re: superannuation - if imputation is at 30% and super tax at 15% - then effectively you have a negative tax.

see: "Investments within super that fund pensions are officially in a tax-free zone for both income tax and capital gains tax. If there is no tax against which to offset imputation credits, the credits become refundable. In other words that means their full value is added to superannuation pension investment earnings as a tax refund. " http://www.easeaccounting.com/news/default.asp?idNo=809

Tristan

This article must be meant to be a joke.

we are an uncomptetitive country that offers little incentive to stay here once any company goes international.

Personal Tax is high, super has the guts taxed out of it, we have capital gains tax, GST and the like taking from us all the time.

You wonder why places like Malaysia are booming and we are waining.

In other countries, it is termed as Third world Corruption, but in Australia, First world Corruption is called Social Responsibility. How Orwellian and Marxist can you get than that?
Philosophical Assumptions and depravity, verses Real ethics and behavior. Sorry, Australia does not rate any more, Looting by statute is epidemic and worshiping Misery has overtaken the Metaphysics of reality.
The Future is not good; there is no value or ethics any more, The Looter/Moocher partnerships have made sure of that.
And we let it happen.
There will never be enough Loot to satisfy them, they are greedy in their own depravity. Such is the scourge of fraudulent politics, and Socialisms destruct concepts.
The ship is sinking quite fast, and only the strong will survive this batch of Looting. Not the Rich, but the ethical and knowledgeable will survive ONLY.