BACKFLIPS followed by backlashes seem to be what is happening to our federal government’s attempts to extract more tax dollars from our population. Those in the system who say they know, are advising that the most influential opponent to these tax grabs is former Prime Minister Paul Keating.
In an opinion piece I have just read by Joseph Olbrycht-Palmer it states that Labor considering tweaks to its proposed super tax is “proof” the policy is “deeply flawed”.
This has greatly incensed Paul Keating who designed the original superannuation system and has come out strongly against proposed efforts to change it.
The proposal was to slap an extra 15 percent tax on super fund balances north of $3million with critics decrying it as a tax on paper profits.
Others have warned that without indexation the move would penalize younger generations.
One Member of Parliament went as far to say that this tax was unfair, unworkable and completely out of touch with reality.
Taxing unrealised gains is fundamentally wrong and should be ruled out entirely.
He went on to call it a slow-motion tax trap for future generations.
The people who would be hit hardest are the youngest Australians who are just starting to save for their eventual retirement.
According to Treasury estimates, the tax in its current proposed form would pump about $2.7million into Commonwealth coffers.
Apparently, the revenue is much-needed by governments who are scrambling to broaden their tax base in response to seismic economic shifts plus poor management of past expenditure.
I see an interesting game being carried out as no one really wants to have to pay more tax.
If that has to happen, they would prefer it to be someone else to pay the piper. One aspect worth watching is the ploy to drag out the worst possible set of circumstances when discussing the need for such increased taxation.
Then when it comes time to legislate it, do so with much gentler and less invasive terms.
People’s reaction would then be: “Well it wasn’t that bad really”, forgetting that the Government was able to grab more tax dollars without offending nearly as many people.
By John BLACKBOURN
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