Superannuation Is Australia’s Most Advantageous Legal Tax Loophole

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Superannuation is one of the most reliable methods for Australians to save money and reduce their tax liabilities. Despite this, many people are now advocating that limits be imposed on it.

Tax avoidance is usually only accepted if you are Google, Apple, or Jimmy Carr’s ex-accountant. With mortgage rates skyrocketing and interest rates increasing rather than decreasing, even the most devoted summer travellers to Europe may be hesitant, given the expensive cost of business-class flights. Ultimately, seeking ways to maximise value for your hard-earned money makes sense.

This week has brought up the matter of using superannuation to reduce tax legally, and both The Australian and macrobusiness.com.au have reported on it in depth.

The Australian journalist asserted that superannuation is an avenue for significant tax benefits and greater riches. In contrast, Leith van Onselen from macrobusiness.com.au exposed the truth about this system – intentionally constructed to benefit those of a higher economic class.

He elucidated, “The 15% flat tax on most superannuation contributions and earnings gives higher-income earners significantly more generous superannuation tax benefits than those with lower to middle incomes.”

As reported by macrobusiness.com.au, the “top 1%” of retirees receive more than double in earnings tax concessions than those receiving an age pension.”

Shockingly, the top 1% of earners will likely receive over $700,000 in superannuation concessions over their careers. This means these individuals are set to gain an astounding 14x more tax benefits than those making up the bottom 10%. Yikes!

“Taxpayers should not be subsidising high-income earners to become millionaires, particularly when there is a budget deficit and other more vulnerable Australians are receiving less than adequate assistance,” said Leith van Onselen.

The current system has generated discourse surrounding the necessity of a cap on superannuation so that it stays within its original objective; providing self-sufficiency in retirement. This ensures that superannuation does not become a tool for individuals attempting to increase their generational wealth.

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