Sent: 05-05-2009 11:29:01
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Excess Contribution Assessments & EU retirement finances
The ATO have determined that about 24,000 individuals have breached the 2007/08 contribution limits and will therefore face penalty tax.
Unfortunately the Tax Office haven't broken this number down into those who breached the concessional limit, the one year non-concessional limit or the three year non-concessional limit. In relation to the concessional contribution limit it would be interesting to know how many breached it because of employer contributions or how many because of personal contributions or how many because of both types of contributions.
One major problem identified by the ATO is that some people who breached the non-concessional contribution limits are not deducting the excess tax from their super balances (which is what the law demands).
You have to wonder about these "envy" taxes. The number caught seems to be similar to the number of people who had RBL problems and it's worthwhile remembering that the ATO did say in one of their annual reports that the RBL system was simply not worth the time and effort to collect the revenue.
Certainly the current government seems to display a certain amount of 'envy'. Admittedly it's playing to its moderate income base and it will be interesting to see how hard it kicks those who earn between $150,000 and $400,000 in the forthcoming budget.
In other news the European Union has a large problem caused by population aging. Overall it's not that dissimilar to the problems Japan faces.
Already the EU says that future prosperity will not come from new workers but can only come from productivity improvements.
This is the first report of its type prepared since the financial downturn hit. (The next instalment in Australia's Intergenerational Report will not appear until 2011.) The EU members had agreed that in order to survive population aging they needed to tightly control their fiscal expenditure. The global financial problems have thrown that strategy out the window for some time.
In theory, there's nothing actually wrong with have fewer children - and hence a declining population - as long as the remaining population are happy to work and not retire. It would seem that many want both fewer children and a decent retirement provided in large part by the government.
You can read from the EU documents at this link: http://www.atcbiz.com.au/r.php?r=af1p2fu
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