Super and Cyprus …

Let’s eat the rich …

Well let’s at least get seriously jealous and really hurt them …

After all it’s good that we let them employ people, pay lots of tax and spend money, we let them off  having to live on the age pension, we don’t make them live on New Start. Cool.

Let’s raid their super … big problem, one thing that the hysterical class warriors, from Rob Oakeshott to Wayne Swan via Fairfax’s Peter Martin, seem not to realise is that for people with squillions super offers a chance to reduce tax by a paltry amount. Here’s Peter Martin …

THINK about an executive on $1 million a year. Not quite one of Joel Fitzgibbon’s “battlers”, but someone several rungs above. His or her company pays a legislated $90,000 a year into a super fund of their choice, the payment is taxed at just 15 per cent. So instead of paying $41,850 in tax, the executive pays just $13,500. The gift from the tax system is $28,350.

What a terribly wicked rich person, well no what a complete load of bollocks, once the numbers are corrected it reads …

… a legislated maximum of $17,190 per year into a super fund of his or her choice; … The gift from the tax system is $5415.

The fact is payments into super are capped therefore the capacity to lower tax is also capped at a fairly low figure. The way to raise money from super is to forget the very rich, just hit all those who’ve been diligent in saving for their retirement. Those who gambled away their income have made their contribution.

But, notice too, the reference to a gift. I have worked hard, I have provided employment to others, we have paid our taxes and contributed to our retirement funds.

SOMEONE on $300k pays about $113k a year income (little or no govt benefits) tax yet someone on $50k a year pays about $7700 income tax (plus govt benefits). The person on $300k pays 14 times more tax for six times the wage than the person on $50k. (Terry … )

If you are going to call that amount of your earnings that the taxman allows you to keep a gift the Cyprus solution starts to look reasonable.

 

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