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SUPERANNUATION, Discussing all aspects of Superannuation
wolverine
post Posted: Apr 5 2013, 08:10 PM
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In Reply To: mrbear's post @ Apr 5 2013, 03:02 PM

Big words confuse me too but Henrietta/J owns me with that post. We happen to disagree on this one but that doesn't change the character of the man and he is one the best here.

I agree we need incentives to work and achieve but this has nothing to do with this discussion IMO. Super has been concessionally taxed going in and during accumulation. Money was pouring in prior to Howard/Costello's free kick so it is not a valid argument that this incentive was required.

Since then the limits have been lowered to reduce leakage of tax dollars on this long tail generosity this has affected self employed people like myself who can now only move $25k into super per annum. So if a self funded retiree is asked to pay tax at marginal rates like the rest of us then yeah I say suck it up but in this case they are only clawing back a poofteenth of the money on earnings over $100k.

The broader the base of tax, the fairer it is for everyone and that is the way to keep taxes low which what most of us want.

edit: Just read the Pascoe article and it is mirroring the Gittins article, it pretty much sums up what I believe.



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TOO MANY CHIEFS

NOT ENOUGH INDIANS
 
henrietta
post Posted: Apr 5 2013, 08:04 PM
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Just read Michael Pascoe in the SMH today. He reckons that anyone with $2m in super is "fabulously wealthy", and goes on some more about the "FW", which he obviously thinks is a very clever abbreviation.

QUOTE
the fabulously wealthy, who we now know are those who have $2 million or more tucked away in their superannuation account.

Read more: http://www.smh.com.au/business/super-still...l#ixzz2Pa5ywYXE


I live in a very modest 60 year old house, drive a very modest Subaru, and live a very modest lifestyle. I am not fabulously wealthy. I am not even wealthy. I am comfortable, just.

What a load of BS.

Cheers
J

ps I may have been hasty . The "fabulously wealthy" phrase might have come from Swan et al. Will check.


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flower
post Posted: Apr 5 2013, 07:47 PM
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In Reply To: wolverine's post @ Apr 5 2013, 12:29 PM

.
QUOTE
I will never be ashamed for accusing you of lying on how much tax you pay for money withdrawn from your SMSF in pension phase. You are paying nothing. Admit that and we can move on.


Already admitted--note date and timeline:

In Reply To: wolverine's post @ Today, 01:13 PM

QUOTE You are SMSF pension phase and still paying tax.......I don't believe you.
Yes, in SMSF pension phase, of course pay no tax



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wolverine
post Posted: Apr 5 2013, 07:40 PM
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In Reply To: flower's post @ Apr 5 2013, 03:05 PM

I will never be ashamed for accusing you of lying on how much tax you pay for money withdrawn from your SMSF in pension phase. You are paying nothing. Admit that and we can move on. Feel free to obfuscate and change the subject but when you do everyone reading this will know you are a person with no greater morals than the labour pollies you lampoon on a regular basis.

Call me a whinger rolleyes.gif



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TOO MANY CHIEFS

NOT ENOUGH INDIANS
 
henrietta
post Posted: Apr 5 2013, 05:53 PM
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Just something to think about. Most have probably seen this before, but its subject is in the news today.

Cheers
J

Suppose that every day, ten men go out for beer and the bill for all ten comes to £100...
If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
... The sixth would pay £3.
The seventh would pay £7..
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.

So, that's what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by £20". Drinks for the ten men would now cost just £80.

The group still wanted to pay their bill the way we pay our taxes.

So the first four men were unaffected.

They would still drink for free. But what about the other six men?
The paying customers?

How could they divide the £20 windfall so that everyone would get his fair share?

They realised that £20 divided by six is £3.33. But if they
subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid £2 instead of £3 (33% saving).

The seventh now paid £5 instead of £7 (28% saving).
The eighth now paid £9 instead of £12 (25% saving).

The ninth now paid £14 instead of £18 (22% saving).

The tenth now paid £49 instead of £59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a pound out of the £20 saving," declared the sixth man.

He pointed to the tenth man, "but he got £10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a pound too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get £10 back, when I got only £2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works.

The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics.


 
forrestgump
post Posted: Apr 5 2013, 05:52 PM
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In Reply To: flower's post @ Apr 5 2013, 05:20 PM

QUOTE
Unless I have grasped the wrong end of the stick the tax on over $100K refers to the ammount of pension that has to be paid out


I believe you have indeed grasped the wrong end of the stick.

It has nothing to do with the amount of pension that is (or has to be) paid out of the fund when it is in pension mode, It is much simpler than that. It is simply a tax (at a flat 15%) on any earnings within the fund that exceed $100k per year.

Whilst it has not been clearly stated I think it is reasonable to assume that it is $100k per pension recipient. That is, if you and your wife are in the same SMSF and are both in pension mode then the fund can earn $200k per year before paying any tax - regardless of how much you actually draw from the fund as a pension.

As far as I can understand it, Capital Gains will be treated as earnings (with some special allowances for existing CG assets). I have not seen any mention of whether the CG will be discounted to an effective 10% as at present - I presume not.



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Peace
Fforrest

Try to be as good a person as your dog thinks you are.

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flower
post Posted: Apr 5 2013, 05:20 PM
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In Reply To: ciabatta's post @ Apr 5 2013, 04:50 PM

QUOTE
There was a rather cryptic comment in this morning's announcement, to the effect that "earnings" by a fund, in Pension Phase, would be taxed at 15% on anything above $100K.

I did not hear anyone say what actually constitutes "earnings". Does this include unrealised capital gains? I.e., if my fund increases in value by more than $100K, then tax is payable? Naturally, the Taxation Department will pay me if, somehow, my fund loses value over the tax year!

Fat chance!

Cheers, Ciabatta

Unless I have grasped the wrong end of the stick the tax on over $100K refers to the ammount of pension that has to be paid out by virtue of the annual Fund valuation trustees have to do and be audited on. (for those actually in pension phase)

Forgot what the actual %'s are, but they are age based, the overall aim is to have the SMSF expire worthless on the death of the youngest trustee, easy to acheive as there is no maximum that can be taken out annually but there is a minimum, which of course Swan has tinkered with over the years, this year mine is at 75% of the "norm" due to Swannies largesse following the GFC.
It is that maximum---IF over $100,000---that I think Swan means, presumably he has used the ATO deeming return rate of 5% to arrive at the aimed for capital value SMSF's of over $2m, thought he said there only 16,000 of such high value SMSF's.

Nothing to do with unrealised capital gains, thank God he hasnt thought of a wealth tax of 40% including private housing worth over $500,000.



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ciabatta
post Posted: Apr 5 2013, 04:50 PM
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In Reply To: flower's post @ Apr 5 2013, 03:13 PM

There was a rather cryptic comment in this morning's announcement, to the effect that "earnings" by a fund, in Pension Phase, would be taxed at 15% on anything above $100K.

I did not hear anyone say what actually constitutes "earnings". Does this include unrealised capital gains? I.e., if my fund increases in value by more than $100K, then tax is payable? Naturally, the Taxation Department will pay me if, somehow, my fund loses value over the tax year!

Fat chance!

Cheers, Ciabatta


 
flower
post Posted: Apr 5 2013, 03:13 PM
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In Reply To: mrbear's post @ Apr 5 2013, 03:02 PM

QUOTE
Gee wolver ,never seen so many big words before,kinda shows me how dumb bears are when you gotta check the dictionary.

I just wonder how the government wisely spent the many hundreds of thousands of capital tax dollars they extracted out of me over the last few years though i suppose i should be grateful they left me any even though they paid no part in me making the profit,as i remember they taxed the hell out of me all the way .

I suppose i should have just gone on the dole as a young fella and milked the public purse for the rest of my life and received the pension ,no questions ,no worries and would not have had to do all that nasty work on the way.
This country has forgotten that you need to give people incentive to achieve and as far as i can see they are doing their best to eliminate this feeling though there will come a day of reckoning when those nasty rich people cannot keep propping up all those poor unfortunate pensioners and dole receivers though i am sure the pollies will get the last treasury dollar for their schemes,cheers mrbear


Spot On mrbear--no wonder the current government leaders are so hated.



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flower
post Posted: Apr 5 2013, 03:05 PM
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In Reply To: wolverine's post @ Apr 5 2013, 12:29 PM

QUOTE
I guess that means you give up and accept that you aren't paying your fair share of tax so you want to stop a discussion about it.



Cannot and will not let that go unanswered, above is a grossly unfair, and untrue accusation.You have no idea what my dob is, or for that matter anything else personally, you should be ashamed of yourself.



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