Just in case you have missed the feeling of higher taxes coming down the pike, take last week’s comment from Assistant Treasurer, Kelly O’Dwyer:
No one has a right to a super tax concession. It is a gift that the government should only provide when it makes sense.
Yes, be afraid. It’s the Canberra beltway talking. Everything belongs to the government and anything that the ordinary punter is allowed to keep is a gift.
Just think about it: the top marginal tax rate is not 60 per cent. The current rate of 49 per cent, including the Medicare Levy, is a gift that the government should only provide when it makes sense.
Hey, the 50 per cent ‘discount’ on capital gains tax is another gift. Gosh, if those capital gains were taxed as annual income but then the discount is applied, that’s another gift that the government should only provide when it makes sense.
This all reminds me of the time when Tanya Plibersek – yes, that monument to public policy thinking – told us that poor people pay for the health insurance rebate paid to those on higher incomes. Que? Since those poor people don’t pay any tax whatsover and receive copious government transfers and benefits, I’m not quite sure how she thought this worked.
But evidently that thinking is not confined to the Labor side of politics. O’Dwyer also thinks that super tax concessions are somehow paid by other people.
Here’s the thing: the taxation of superannuation is based on the fact that the money is locked up for very long periods of time and the money must be easy to collect. (Actually, there really should be no tax at either the contributions or earnings phase and the government knows this. But being short of money, the gift talk is useful.)
And if you look at the Mercer figures, it is clear that only someone in the highest income decile for their entire professional life (no one, in fact) actually receives more in tax concessions than those in other income deciles when the cost of the age pension is added to the tax concessions.
So when working out the value of this ‘gift’, I would suggest that some careful calculations be undertaken to to account for the cost of the age pension as well as the way super is taxed.
On this sort of stuff, it’s hard to tell the difference between the Coalition and Labor.