Today my office has been inundated with complaints about Bill Shorten’s $59 billion tax hit which will hit pensioners and self-funded retirees extremely hard.
Labor’s “retiree tax” is a $59 billion raid on imputation credits and a direct attack on retirees, pensioners and low income earners.
Under Labor, dividends from shares would no longer be protected from double taxation, meaning that more than one million individuals will have their income squeezed. Labor’s proposal would also impact around 40 per cent of all SMSFs, and retirement savings held in approximately 3.5 million super fund accounts.
Despite Labor’s claim that recipients of imputation credit refunds are “typically wealthier retirees”, the fact is that 97 per cent of individuals who receive refunds of franking credits have taxable incomes below $87,000.
What’s more, over half of all individuals who receive refunds of franking credits have taxable income below $18,200, including pensioners, part-pensioners and self-funded retirees who have worked hard to support themselves during retirement. Labor’s policy would completely extinguish a vital income stream for these low income earners.
If Labor were serious about preventing the distribution of refundable imputation credits on the basis that entities haven’t paid tax, why does their policy still allow hundreds of millions of dollars’ worth of franking credits to be refunded to income tax exempt organisations like trade unions?
Incredibly, today’s announcement means he has now proposed more than $200 billion worth of new taxes over ten years – that’s a tax hike roughly equivalent to the entire GDP of New Zealand, and that’s what we know so far.