Zero tax rate on pensions is right and fair

Discussion in 'Superannuation, SMSF & Personal Insurance' started by twisted strategies, 20th Sep, 2018.

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  1. twisted strategies

    twisted strategies Well-Known Member

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  2. D3xx

    D3xx Well-Known Member

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    I disagree with the opinion of the article. The earnings of a super fund in retirement phase should be subject to a degree of income tax. It is income, plain and simple. Any tax paid on contributions or pre-retirement earnings is irrelevant.
     
  3. Rickwood

    Rickwood Member

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    Would be interested in your reasoning.

    Cheers
     
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  4. D3xx

    D3xx Well-Known Member

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    My reasoning is that all income earned by anyone should be subject to a degree of taxation (allowing for a tax free threshold). Super earnings of pensioners is not currently.
     
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  5. twisted strategies

    twisted strategies Well-Known Member

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    i would argue 'deeming' if the retired person is claiming a pension , also is just that

    and a truly independent retiree ( no pension ) is saving the government money and administration costs

    after all these folk were fiscally responsible ( unlike the Federal government )

    they have compulsorily ( and some have salary-sacrificed ) saved part of their income and saving the government some excessive future obligations .

    why would you tax the frugal and encourage the financially reckless ??
     
  6. D3xx

    D3xx Well-Known Member

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    I dont see that it is directly relevant. If i was a 40yo stock broker who, through skill and discipline, accumulated millions of dollars; should the government reward me with zero applicable tax on the future earnings of said millions of dollars? My age shouldnt matter. Its the income which matters.

    Super is an investment like any other and should be subject to tax on earnings. The government encourages investment during the accumulation phase by offering a tax discount, and rightly so.
    However i dont see the justification for that tax to ever drop to zero. I would like to see a tax free threshold on post retirement super set at, say, the annual age pension. Then,15% from there up to around median wage. Then income tax style brackets above that.
     
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