Labor justified its franking credits policy based on the cost rising 10-fold since 2001 and heading towards unaffordable levels. But were the numbers right and would the savings ever have eventuated?
Tag Archives | company tax
A reader has asked for the simplest possible explanation of dividend imputation and franking, as the heated debate features many people who do not understand the basics.
Every day, an expert writes somewhere about the adverse impact of a reduction in franking credits due to a lower company tax rate. This tax rate has no impact on the after-tax returns received by Australian shareholders.
Imputation is seen as a costly tax break for domestic shareholders with minimal associated benefits for the overall economy, but any changes to the system should consider some broader consequences.