A Labor party tax proposal is being slammed by critics who say it would tax self-funded retirees twice.
Under the policy, retirees would pay tax on already taxed company profits. Additionally, proposal would abolish tax refunds for share dividends, which critics say would also ban tax refunds for self-funded retirees.
Gerard Benedet, national director for Advance Australia, said that Labor’s proposal affects millions of self-funded retirees, including those on low incomes who heavily rely on cash refunds from Australian shares.
“Labor’s policy statement makes it appear as though the new tax is about reducing tax concessions for millionaires, but in fact, retirees set to be hit by the retiree tax aren’t the wealthy elite, but your average hard-working self-funded retiree,” he said.
Advance Australia claimed that 84% of Aussies set to be affected by the proposal are on taxable incomes below $37,000. Add to the equation the depressed shared market and weakening housing market, the proposed policy is likely to put retirees in distress, he said.
Benedet also warned about the possibility of the “retiree tax” being applied to pensioners as well.
“For years, Aussies have planned for retirement on the fair assumption that dividend imputation rules, which have historically shared support from both sides of politics, would support their retirement income. Self-funded retirees are distraught at the prospect of a significant cut to their retirement income, and at the end of the day, that’s just unfair – this isn’t the Australia we know and love,” Benedet said.