Analysis of ATO data from the Financial Services Council (FSC) shows over 500,000 current taxpayers will be adversely impacted by the government’s proposed 30 per cent tax rate on earnings above $3 million.
The modelling has produced examples of actual taxpayer impacts. Examples include:
- A 25-year-old IT professional earning $100,000 with a current superannuation balance of $35,000 would reach the $3 million threshold by the time they retire at age 65.
- A 45-year-old school principal earning $150,000 today with a current superannuation balance of $650,000 would reach the $3 million threshold by the time they retire at age 65.
- A 55-year-old dentist earning $220,000 today with a current superannuation balance of $1,400,000 would reach the $3 million threshold by the time they retire at age 65.
The FSC said it will work constructively with the Treasury throughout the consultation process on details that still need to be resolved, including:
- The long-term impact if the $3 million threshold is not indexed;
- The interaction with the transfer balance cap;
- How investment earnings will be calculated and whether they will be applied to unrealised gains;
- Impacts on consumers in the accumulation phase who are unable to adjust their super balances; and
- How contributions from structured settlements on personal injuries will be treated.
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