An overwhelming majority of SMSF practitioners have rejected Labor’s proposal to tax earnings in retirement, and speculation continues to mount over the future of tax breaks in super for the wealthy.
An SMSF Adviser straw poll asked readers “Do you support Labor’s proposal to tax superannuation income exceeding $75,000 by 15 per cent?”
Of the 489 respondents, 16.4 per cent said yes, while an overwhelming majority of 409 respondents or 83.6 per cent said no.
Labor’s tax proposals, announced by Opposition Leader Bill Shorten late last week, have been met with mixed reactions from the superannuation industry.
Those in the SMSF sector, including those representing SMSF trustees, have voiced strong opposition to the proposals.
“Labor says it is reacting to calls for action on superannuation tax concessions for high-income earners. These calls come from predictable quarters – left wing think tanks and industry funds that don’t like SMSFs,” the SMSF Owners’ Alliance stated.
“They are usually based on a mis-reading of tax estimates which Treasury itself says contain no policy message and don’t acknowledge that the high-income earners who get most of the superannuation tax concessions actually pay an even higher proportion in income tax.”
Others, like Taxpayers Australia, who have long been calling for a reassessment of superannuation tax concessions, have welcomed debate over the sustainability of super tax breaks for the wealthy.
While tax-free retirement income is a “great facet” of the current superannuation system, Taxpayers Australia’s head of superannuation Reece Agland believes it is unsustainable in the long run.
“You look at those that don’t need the tax concession and remove it from them. This is worthy of debate,” Mr Agland said.
Mr Agland told SMSF Adviser in mid-2014 that the “excessively generous” deductions in superannuation available to the wealthy are unsustainable and need to be considered in any genuine tax reform process.
“While most of us will need superannuation to provide for our retirement, the wealthy do not. Without it they would still be able to make adequate preparations for their retirement years,” Mr Agland said.
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