On a serious note, I endorse his suggestion that lower company taxes do help economic growth. The two related effects he did not mention were:
(a) ‘greater compliance’ (increased amount to assess) as it is less worthwhile seeking to not declare income; and
(b) lower ‘transfer pricing’ disputes with international companies using (i) raw material transfer pricing, (ii) IP royalties and (iii) Head Office payments, to transfer income to other lower-corporate-tax countries

Further, he did not point out that the lower the corporate rate of tax is, the less importance dividend imputation is anyway… which goes a little way to address the issues raised by self-funded retiree Gerry Costigan. However, the bigger issue is that the shares would do better with an ability to re-invest more of their earnings… with the result that the first significant taxation of them being when the funds are finally transferred into the hands of the shareholders.

But for a ‘smart economy’, we need to rid Australia of anti-investment taxes, of which payroll tax stands out. Payroll tax was introduced after WW2 to pay for the public transport needed to get people to work. Clearly it has failed to achieve that purpose… one may as well recoup that amount by way of time-of-day micro-billing on all major arterial roads at ONLY peak hours, to promote public transport and tax those who use roads at their most valuable time.

Property investment has to become more liquid like shares. Better to tax the resultant capital gains uniformly and remove stamp duty. The housing stock is used very inefficiently because people cannot easily trade-down and we FAVOUR non-productive assets, due to capital gains tax exemption on own home.

Abolition of dividend imputation would accelerate the fast falling stock market value of Australian shares. It would greatly reduce both value and income of most retirement funds. It would reduce the amount of money its beneficiaries can spend or invest in an economy which needs this spending and investment. It would even increase the number of retired people making applications for old age pensions, needing to sell their cars or homes, and unable to afford housing and medical care in their old age.

The money made available from dividend imputation is of great benefit to individuals, to retirement funds and to the general economy. Could Nic write more about that and about compensation for all three if dividend imputation were abolished?

Gerry Costigan, East Perth