Dnarever wrote on Feb 7
th, 2016 at 8:25am:
Redmond Neck wrote on Feb 7
th, 2016 at 8:02am:
Sigh!
I think you may be talking through your arse!
Sigh!
My understanding is that currently marginal tax rates and super contributions tax are two separate things.
This article is talking about making all taxpayers super contributions be taxed at 15% and somehow this is going to save the government $6 billion per year.
An aside I acknowledge that low income earners super is taxed much higher as a % of their earnings.
You seem to be building a new set of marginal tax rates that includes the super tax. How is this going to save the government $6 billion a year ?
The plan being considered would make tax incentives for contributing to super the same for everyone at 15 cents in the dollar No I think he is correct. It is very badly saying that everyone would be advantaged by 15% on superannuation.
that is if you are paying 47% your super is taxed at 47-15 = 32. pay 32% tax on superannuation but get a 15% discount the same as everyone else.
Of course the businessmen who bring in many hundreds of thousands but minimise their tax to the point that they look like the poorest amount us would still get the maximum benefit.
Everyone gets a tax benefit on their super of 15%
I hate to say it but it does look like Turnbull may have got one right.
Currently there are three ways of paying into super
2. The Super Guarantee (9.5%) of your salary paid in by your employer to your fund and taxed on deposit by the fund at 15% (up to 30% high income earners.
2. Salary Sacrifice amounts voluntarily paid in by your self also taxed as above.
3.After tax contributions voluntarily paid by your self and not taxed on deposit into your fund (tax has already been paid)
https://www.australiansuper.com/superannuation/how-super-works/how-your-super-is...Currently marginal tax rates on income
$0-$18,200 0% Nil
$18,201- $37,000 19% 19 cents for each $1 over $18,200
$37,001-$80,000 32.5% $3,572 plus 32.5 cents for each dollar over $37,000
$80,001-$180,000 37% $17,547 plus 37 cents for each dollar over $80,000
$180,001 and above 47%* $54,547 plus 47* cents for each dollar over $180,000
You guys seem to be combining Income Tax and Tax on Super which are quite separate things at the moment.
Is this correct?
How is this going to save the government $6 Billion / year First the tax scale applies to income separately to Superannuation saving which is taxed at 15% on pre tax dollars, currently for everyone on any pay scale. This will appear on your tax group certificate typically as reportable employer super contributions. It will currently be taxed at 15% irrespective of your pay scale or marginal tax rate, as you can imagine it is only high earners who can afford to be paying additional superannuation.
What it seems to be saying is that for people on higher scales they would be taxed in the same manner but @ up to $32% instead of 15%. Still pre tax $'s.
The current position is that people who pay tax at 47 c get their super contributions taxed at 15c under this recommendation they would get a benefit of 15c on super contributions or have to pay tax on it at 32c.
High earners would get their super savings at a 15c discount but have to pay 17c more in the dollar than they do today.
This means that on your tax return for the section on reportable employer super contributions the tax rate would go from being set at 15% to being 15% below your upper tax rate.
The additional government income is generated by higher income earners paying about 17c in the dollar extra.
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