Filth, Bacteria, Lies and Tax

If you choose to live in dirt and filth and you wind up getting an infection, whose fault is it? Is your fault for choosing to live in filth or is it the bugs’ and rodents’ fault for spreading bacteria in the welcoming environment you have created?

TAFKAS has been engaging in a number of tax policy skirmishes on Twitter. They start as responses to manifestly wrong and misleading posts from ALP representatives and devolve into the usual twitter nonsense.  The particular issue du jour is the ALP proposals around changes to dividend imputation.

To start with, it is a complete lie to suggest that this is about addressing some sort of largess of the Howard government.  It is also a lie to suggest that it costs the budget something, because the absence of a revenue is not a cost.  If the absence of revenue is a cost, well then the Commonwealth budget needs to start accounting for the remainder of the economy and private wealth that it is about to grab.

What the ALP’s dividend imputation policy is, is a hit; a direct hit against a particular segment of the community.  It does not hit pensioners.  It does not hit industry funds.  It does not hit charities.  It does not hit the ultra-wealth people.

It hits people with a bit more money necessary to qualify for a pension and a bit less money than the top hat wearing, champagne drinking, first class flying dilettantes who generally demand climate action.  Basically, it’s a hit on the people who probably vote Liberal and are being punished for the temerity of doing so.

If this tax change applied to everyone equally, a reversal of the 2001 change, that would be one thing.  It would be bad, but not as bad as this.  This is a targeted hit against a particular demographic segment.  Dare one say this is round 1 of identity tax policy?

When it comes to their dividend imputation proposal, the ALP is either deliberately lying about how it would work or they are completely ignorant of how the dividend imputation system works. The ALP has form in being both dumb and duplicitous and it is not beyond the realm of possibility that they are both in this case.

And then you must add in the twitter tribes and mobs egging them on.  Those tribes and mobs who would argue for mass suicide if an ALP representative said it would be good policy, would help them get elected and would contribute to action on climate change.

But the conditions that have allowed the ALP to engage in this hit did not come out of thin air.  There was a time when such policy would not be dared to be proposed.  But the welcoming conditions that have allowed such policy to be proposed were created by the Liberal-Nation Government; this Liberal-National Government.

To start with, changes, retrospective changes, to superannuation were an idea of this Liberal National Government; a policy idea taken up by then Treasurer ScoMo, Revenue Minister KelDwy and endorsed by Prime Minister MalTurn.  This made the case that retired superannuants, with a bit too much, are a revenue cost to the Government.

Then another policy gem from then Prime Minister MalTurn, Treasurer ScoMo and Revenue Minister KelDwy; the bank tax which was sold as being paid for by banks and not by customers or shareholders.

And then the company tax cut fiasco by suggesting that small company tax cuts, much like accelerated depreciation, are different and more than cash flow timing policies.  Oh and let’s not also forget the wet lettuce response to the lie that was Mediscare.

When a political party strays from its principles, or at least stated principles, this is what happens.  In this case, the principles of small government, low taxes, small business and economic self-reliance were jettisoned for … what?  What it did do was give the ALP the space to appear as a credible alternative.

Ironically, TAFKAS suspects that this proposal won’t generate any additional tax revenue because of behavioural changes by those impacted, including by going onto the pension. One day these geniuses will learn that there is a difference between tax rates and tax revenue, and  that they don’t necessarily follow each other in a proportional and linear manner.  You know like the mining tax which generated all of no revenue.

This Government has become so sullied they cannot smell their own stink and therefore cannot even notice the stench of their opponents.

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23 Responses to Filth, Bacteria, Lies and Tax

  1. stackja

    Many people accept silly ideas.

  2. The insidious notion that the ALP is different than the Liberal-National party is a farce.
    The Uniparty is one, with one and the same immoral set of destructive ideas.

  3. The BigBlueCat

    It hits people with a bit more money necessary to qualify for a pension and a bit less money than the top hat wearing, champagne drinking, first class flying dilettantes who generally demand climate action. Basically, it’s a hit on the people who probably vote Liberal and are being punished for the temerity of doing so.

    Well, punished for not voting Labor anyway …

    If this tax change applied to everyone equally, a reversal of the 2001 change, that would be one thing. It would be bad, but not as bad as this. This is a targeted hit against a particular demographic segment. Dare one say this is round 1 of identity tax policy?

    I agree … it does not hit those who pay tax on other taxable income – they get to apply the franking credit to lessen their tax exposure. People forget that the franking credit represents the tax withheld (at the corporate tax rate) from the dividend payment. Individuals should pay tax at their individual tax rate, not the corporate tax rate, and all taxpayers should be treated equally – that’s why the ALP policy is wrong.

    When it comes to their dividend imputation proposal, the ALP is either deliberately lying about how it would work or they are completely ignorant of how the dividend imputation system works. The ALP has form in being both dumb and duplicitous and it is not beyond the realm of possibility that they are both in this case.

    The ALP are both deliberately lying and ignorant. They lie to cover up their ignorance and their connivance. They are acting like they are being just, but in reality, they are being unjust. It is virtue-signalling of the worst kind – it’s costing people money, and will make many of those people look to the welfare system in order to meet their cost of living. Bowen and Shorten are proving themselves to be thieves.

  4. Percy Popinjay

    Another much loved participant in this ongoing idiocy – JoFry.

  5. Let Labor do it, then maybe people will wake up to what it means to vote Labor. Who knows, the next government may even reverse the policy, or not.

    It’s especially odd that even though the LNP have so many hand grenades to lob into the Labor camp, every one of them seems to go off in their own camp.

  6. Another much loved participant in this ongoing idiocy – JoFry.

    Is that with Game of Thrones “Joffrey” pronunciation?

  7. MACK

    These people are vindictive – talk to any Melbournian who lives in Toorak or South Yarra about the behaviour of the Victorian ALP government. They closed Domain Road, a major artery, in front of Melbourne Grammar School for five years for the rail loop. At the same time they narrowed parallel Toorak Road to one lane to give trams preference, lowered the speed limit and put in lots of traffic lights. They have announced a noisy ugly overhead sky rail at the eastern end of Toorak Road, and have refused to connect South Yarra railway station to the new train loop. And just a day or two ago, they announced new technology to give trams precedence over cars, and the first trial will be run right down Toorak Road. They are running a Marxist class war.

  8. These people are vindictive – talk to any Melbournian who lives in Toorak or South Yarra about the behaviour of the Victorian ALP government.

    Aren’t most of the residents of these areas more of less ‘doctors wives’ types, drinking from the global warming koolaid flagon? They should welcome more trains and trams. Or is that only for the plebs?

  9. davo

    yep, all true but it feels terrible that people who did save and do something constructive really have no capacity to change anything; just totally outnumbered by the free-loaders and their envy; while the truly rich are unaffected as always

    The tax system explained in beer (from UK but strikes a chord) summarises it nicely; https://cuffelinks.com.au/marks-and-the-tax-system-explained-in-beer

  10. Boambee John

    Excuse my ignorance, but what would happen if companies only distributed unfranked dividends?

  11. Tim Neilson

    Boambee John
    #2944388, posted on February 26, 2019 at 6:21 pm

    The starting point is that if a company makes $100 profit and pays $30 tax, it can pay the $70 as a fully franked dividend, and if the shareholder is a top marginal rate taxpayer (47% at present I think) the shareholder will pay an extra $17 tax.
    (That’s because with franked dividends the shareholder is treated as if the shareholder directly earned the $100 profit and directly paid the $30 tax, so at 47% there’s only a further $17 to pay.)
    The shareholder gets $53 of the total $100 profit and the government gets $47.

    If the company paid the $70 as an unfranked dividend the government still keeps the $30. The shareholder now pays something like $32.90 extra tax. The shareholder gets to keep $37.10 and the government gets $62.90.

  12. Boambee John

    Tim

    Thanks, I was not clear enough, why not pay the full $100 as an unfranked dividend? Then the recipient declares the lot as income and pays the relevant tax/gets the relevant refund?

    Is it that tax law requires the company pay tax on the dividend before distribution?

  13. Mark A

    Boambee John
    #2944485, posted on February 26, 2019 at 8:03 pm

    Tim

    Thanks, I was not clear enough, why not pay the full $100 as an unfranked dividend? Then the recipient declares the lot as income and pays the relevant tax/gets the relevant refund?

    Is it that tax law requires the company pay tax on the dividend before distribution?

    Yes his answer is not right, can’t pay tax on the $100 and then call the $70 as “franked”.

  14. MatrixTransform

    The shareholder gets to keep $37.10 and the government gets $62.90.

    They’re putting their hand in the pocket of Main St.

    1. s’pose I could pay myself higher wages
    2. Maybe it’s not the time to hire another guy
    3. Perhaps I should stop spending personally on things like a subscription to The Age
    4 Could drive the old car for a few more years

    with Labore in charge things are on the up-and-up

  15. John Stankevicius

    Why is it that 19 years ago this incentive was introduced while the budget was in surplus. Now 19 years later it’s not affordable.

  16. Peter Campion

    I’ve battled this greentard in various papers for years. Thick as a brick…

    The Editor
    Courier Mail

    Sean McGinn (Letters, 26/2), doesn’t understand franking credits.

    “Shares” means you’re part-owner of a company. Government makes your company pay tax on your share of the profit.

    If your other income is low, you get a refund. If it’s high, you pay extra tax.

    It’s not a “gift” and the “work” was done to buy your share of the company.

    Of course, facts don’t matter when there’s a narrative to spin.

    (71 words)
    Peter Campion

  17. John Stankevicius

    Karbar and Bemused
    I agree that Labour has been running the country for the past 6 years. With regards to hand grades the labour machine have perfected that vile morality. Just like [email protected]
    AST night , could not understand 4 of them but they sounded so moralistic. It’s only today that I realised how stup that women was talking about feeding a baby and how political it is for a woman.

  18. Whalehunt fun

    Many people accept silly ideas.

    Tens of millions voted for both Clintons. Thus proves many people are cretins.

  19. Gan Do

    Spartacus is wrong it does hit pensioners. You can have two hundred and something thousand dollars and receive a full pension. In my case the franked dividends refund pays for the house & contents insurance.

  20. Is it that tax law requires the company pay tax on the dividend before distribution?

    Yes. The company can’t reduce its tax liability on its profits by paying dividends. Tax liability is calculated on pre-dividend profits irrespective of what the company does or doesn’t then pay as dividends. (With very limited exceptions not relevant to normal shares and normal shareholders.)

    Mark A
    #2944490, posted on February 26, 2019 at 8:12 pm

    Actually they can, but in normal circumstances it would be idiotic to do it. (And in any circumstance where it might be sensible the tax law would penalise you for doing it.)

  21. The BigBlueCat

    Here’s something I recently came across. We should be asking why we don’t have Australian politicians talking like this.

    Yes, it is US-centric, but regrettably, there is no-one in the 2 major Australian parties who reflect or enact the values the speaker refers to in any context whatsoever!

    Until we start hearing our politicians talk like this – things like how our initiative and self-sacrifice have been wrongly substituted for allegiance to our overseers who control us by making us dependent on them, parents being the decision makers regarding their children’s education and not bureaucrats, and the individual must be free to pursue their own happiness without government dependence or control.

    Revolutionary ideas for sure (/sarc) …. will any Australian politician stand up for these principles? Will we hear anything like this during the federal election campaign? Methinks not, and we will all be the poorer for it.

  22. Pyrmonter

    Adverts in the AFR promising ‘high returns, nice and safe’ from interest-bearing debentures in 5 …, 4…, 3 …, 2…, ….

    A welcome support for the insolvency profession, now that banks won’t appoint receivers (lest the borrowers contact Wacker Williams, Kate Carnell, Adele Ferguson etc).

    Then, once the investors move their money elsewhere, where will the ALP turn to fund yet further transfer payments?

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