5 years ago
OUT OF TOUCH LIBERALS PROTECT TAX LOOPHOLES
CHRIS BOWEN MP
Another day, another dishonest scare Liberal Party scare campaign to protect the tax concessions of the wealthiest.
Labor makes no apologies for closing down tax loopholes that overwhelmingly benefit the top end of town so we can pay for better schools and hospitals for all Australians.
Under the Liberals, multinationals and millionaires aren’t paying their fair share of tax.
Labor’s reforms to the taxation of trust is simply an extension of John Howard’s work as Treasurer, in seeking to apply a minimum standard tax rate of 30 per cent to discretionary trust distributions to beneficiaries over 18 years of age.
Labor’s reforms means wealthy people will not be able to artificially split up their income to minimise their tax.
Nurses, teachers and tradies can’t minimise their tax through tricky loopholes – so why should anyone else? It’s not fair.
Federal Labor’s plans are well targeted, with 98 per cent of all taxpayers unaffected by the changes. That’s because most Australians aren’t able to access this loophole.
Given that both Peter Costello and Joe Hockey and previously The Australian newspaper thought trust taxation should be reformed, it is remarkable that Josh Frydenberg thinks what is clearly tax minimisation should be defended.
The Australian newspaper was highly critical of the Rudd government in 2008 for not clamping down on family trusts.
“The government has yet to show it is serious about biting the bullet on the bigger tax-reform issues that have proved too difficult for successive governments in the past. These include the use of family trusts to shelter taxable income,” an editorial in The Australian argued on June 18, 2008.
The Australian Taxation Office has expressed concerns around income splitting and the ‘spiking’ of taxpayers just below the marginal tax rate thresholds who receive a distribution form trusts.
An increase in the numbers of taxpayers just under tax thresholds – as the ATO argues is partly due to the use of trust distributions – is clear evidence that some are trying to avoid paying their marginal rate of tax.
Research commissioned by the tax office – and released under Freedom of Information laws – showed that the abuse of trusts is potentially costing the Budget billions of dollars, and concluded that ‘orchestrating income tax shuffles can be particularly advantageous for high wealth individuals’.
It is completely unsurprising to see the Liberal Party continue its full frontal defence of all tax concessions that overwhelmingly benefit the wealthy at the expense of low and middle income PAYG tax payers.
The current law that the Liberal Party supports has let wealthy individuals use family and discretionary trusts to split their income and make use of the tax free threshold and lower income brackets of non-working family members.
Wealthy individuals are much more likely to have a trust than low and middle income earners. The average amount held in private trusts by the wealthiest 20 per cent of households in Australia is more than $123,000, while for the next quintile it’s just $4,000.
Small businesses using trusts legitimately such as asset protection can restructure to retain these benefits.
Labor makes no apologies for closing down tax loopholes that overwhelmingly benefit the top end of town so we can pay for better schools and hospitals for all Australians.
Under the Liberals, multinationals and millionaires aren’t paying their fair share of tax.
Labor’s reforms to the taxation of trust is simply an extension of John Howard’s work as Treasurer, in seeking to apply a minimum standard tax rate of 30 per cent to discretionary trust distributions to beneficiaries over 18 years of age.
Labor’s reforms means wealthy people will not be able to artificially split up their income to minimise their tax.
Nurses, teachers and tradies can’t minimise their tax through tricky loopholes – so why should anyone else? It’s not fair.
Federal Labor’s plans are well targeted, with 98 per cent of all taxpayers unaffected by the changes. That’s because most Australians aren’t able to access this loophole.
Given that both Peter Costello and Joe Hockey and previously The Australian newspaper thought trust taxation should be reformed, it is remarkable that Josh Frydenberg thinks what is clearly tax minimisation should be defended.
The Australian newspaper was highly critical of the Rudd government in 2008 for not clamping down on family trusts.
“The government has yet to show it is serious about biting the bullet on the bigger tax-reform issues that have proved too difficult for successive governments in the past. These include the use of family trusts to shelter taxable income,” an editorial in The Australian argued on June 18, 2008.
The Australian Taxation Office has expressed concerns around income splitting and the ‘spiking’ of taxpayers just below the marginal tax rate thresholds who receive a distribution form trusts.
An increase in the numbers of taxpayers just under tax thresholds – as the ATO argues is partly due to the use of trust distributions – is clear evidence that some are trying to avoid paying their marginal rate of tax.
Research commissioned by the tax office – and released under Freedom of Information laws – showed that the abuse of trusts is potentially costing the Budget billions of dollars, and concluded that ‘orchestrating income tax shuffles can be particularly advantageous for high wealth individuals’.
It is completely unsurprising to see the Liberal Party continue its full frontal defence of all tax concessions that overwhelmingly benefit the wealthy at the expense of low and middle income PAYG tax payers.
The current law that the Liberal Party supports has let wealthy individuals use family and discretionary trusts to split their income and make use of the tax free threshold and lower income brackets of non-working family members.
Wealthy individuals are much more likely to have a trust than low and middle income earners. The average amount held in private trusts by the wealthiest 20 per cent of households in Australia is more than $123,000, while for the next quintile it’s just $4,000.
Small businesses using trusts legitimately such as asset protection can restructure to retain these benefits.