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Saturday, 31 July 2021
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Dr Rodney Brown's article last week on taxing the rich and inequality led to a lively discussion. As a follow up, we republish Oaktree's Howard Marks on the popular 'beer' example to explain the tax system.
At some point, politicians will debate how to reduce the national debt and implement measures aimed at simultaneously easing budget pressures while reducing the gap between rich and poor. Investors should be ready.
Marginal tax brackets are not indexed for inflation, so when people receive salary increases, there is some erosion in proportional take-home pay due to higher tax. But it’s not as bad as it used to be.
The extra 15% Division 293 tax slips easily under the radar, and most people do not realise how it is calculated and how the proposed Labor policy might now capture them.
Labor's franking credit proposal will reduce the income of many retirees who do not believe they are wealthy. Here's an exchange with a reader who just wants an answer to "Is it fair?"
In his latest memo to clients, Oaktree's Howard Marks quotes the popular 'beer' example to explain the tax system, and we reproduce it here.
ETFs are popular investment vehicles but can be complex for tax returns. The ATO classifies them as trusts, and investors, administrators and accountants need to know the details.
Many people are reluctant to plan financially for their death, and it's not simply a matter of passing money to heirs. Far more tax-effective techniques are available which can make inheritance simpler.
For a pension fund with a tax rate of zero, it is better to receive an after-tax dividend of $100 than a company retaining after-tax capital of $70. Why aren't company directors asked about this tax inefficiency?
The added complexity of the new superannuation rules increases the compliance burden for investors and their advisers, and the requirements around the $1.6 million threshold are especially complex.
The 50% CGT discount has little justification during low inflation and it encourages capital gains over income. The preferable system is the indexation in effect prior to 1999, and it will help housing affordability.
Major reform of Australia's tax laws hits a hurdle when opposition builds to unpopular policies. We have lost the ability to explain and advocate for change, especially when you look at global comparisons.
What happens when a superannuation expert sets up his own retirement portfolio using decades of knowledge? He finds he can afford much more investment risk in his portfolio than conventional thinking suggests.
There is a small universe of companies on the ASX which are reliable dividend payers over five years, are fairly valued and are classified as ‘negligible’ or ‘low’ on both ESG risk and carbon risk.
The Big Four banks look similar but they are at fundamentally different stages as they move to simpler business models. Amid challenges from operating systems, loan growth and neobank threats, one factor stands tall.
They are six of the greatest businesses ever and should form part of the global portfolios of all investors. The market sees risk in inflation and valuations but the companies are positioned for outstanding growth.
A comprehensive study of the impact of inflation on returns from different assets over the past 120 years. The high returns in recent years are due to low inflation and falling rates but this ‘sweet spot’ is ending.
The first of five articles on modern retirement income products that aim for an increasing pension that lasts for life and on average should not decline in real terms. They are not silver bullets but worth a look.