Dividend Imputation System Essay Example | Topics and Well Written Essays - 3000 words

Dividend Imputation System - Essay Example Previously the corporate tax rate was 39% and now it has been reduced to 30%. Dividend imputation was brought in during the year 1987. It is a tax reform brought about by the Hawke/Keating government. Before the reform a company had to pay company tax on its gains and after that if the company paid a dividend it was also taxed again as income for the shareholder and this led into a form of double taxation. Dr Henry who is leading the Federal Government's taxation review, stated that, "If domestic shareholders have access to full company tax imputation, the company tax actually increases their dividend income - both in pre-tax and post-tax terms". In 1997 the eligibility rules for the same were introduced, with a $2000 minute shareholder exemption. In the year 1999 the exemption was enhanced to the current $5000. In the year 2000 franking credits were made completely refundable rather than decreasing tax liability to zero. In the year 2002 preferential dividend streaming was cast out. Australia's arrangement of dividend imputation which is otherwise known as franking is a key concept which new capitalists had to realize. Australian companies did not escape illogical capital allotment decisions. The imputation system encourages a more liberal distribution of profits by dividends. The most significant facet of this system is that Australian resident individual shareholders get a rebate in respect of tax which is already paid by the company on dividend income. This refund is known as the franking rebate. For instance if an individual pays tax on other income at the highest marginal rate of 47% which excludes the 1.7% Medicare then his tax liability on a entirely franked dividend is cut down from 47% to 17% by the franking rebate. At the same time if a taxpayer has to pay tax on other income at the marginal rate of 30% excluding the 1.7% Medicare levy then his tax liability is decreased from 30% to -9% by the franking rebate. Lastly when an individual pays tax on other income at the trivial rate of 20% exclusive of the 1.7% Medicare levy then the tax liability on a totally franked dividend for such a taxpayer is cut down from 20% to -25% by the franking rebate. As the franking rebate is more than the payable tax, the rest of the rebate can be utilised to offset other income like salary etc. As per calculations the individual mentioned above will have a tax credit of $250.00. Present treatment of resident shareholders in resident company with source of income in Australia: Australian Company Taxable Income = $1000 Australian company tax =$ 300 (which creates $300 of franking credits) Income after tax = $ 700 If the company wants to pay off all its after tax income the highest franking credit that it can apportion for distribution is $300. The consequences of an allocation of $700 along with a franking credit of $300 for a 48.5 % marginal rate shareholder, a 31.5 % marginal rate shareholder, for an Australian corporate shareholder and a superannuation fund shareholder is as follows:- 48.5% Marginal rate shareholder Dividend = $ 700 Franking credit =$ 300 Dividend grossed up =$1000 Tax @ 48.5% =$ 485 Tax offset =$ 300 Net tax payable = $ 185 Dividend after tax =$ 515 31.5%

The trouble with Lichen. novel by John Wyndham and Short circuit movie Literature review

The trouble with Lichen. novel by John Wyndham and Short circuit movie - Literature review Example â€Å"The trouble with Lichen.† by John Wyndham. The plot of the novel takes the reader from the lab where the doctor, Saxover Francis, with his assistant, Brackley Diana extract the drug from the Lichen to the time when she has to make a run for her life when the secret about the drug leaks into society and her life is threatened. She eventually fakes her own death in order to avoid the death. Ironically, her product is actually supposed to avert death- at least for three hundred years. The movie is about a company that develops a set of five robots. The robots were originally intended to carry out some mundane activities like playing of musical instruments and others. They are named number one through to number five. After Newton Graham has finished developing the robots, he goes to demonstrate them to the other company at the grounds. His demonstration is however abruptly interrupted by a storm. It was while he was still evacuating the robots that one of them was struck by electric current. The electric current causes a â€Å"short circuit† and ultimately changes the instruction codes in the robot. This, as we later find out, gives the robot life. The two pieces are both science fictions that are somewhat related. They both predict on future innovations that actually took place many years down the line. Even though man has not yet found a solution to ageing that would make him attain the age of here hundred years, there are at least some drugs that are being used to control ageing to a significant degree. Consequently, the prediction made in short circuit have also come to see the light of day. There are much technological advancement in the ICT field that can be comparable to the ideas propagated in short circuit. The main reason why I chose this novel and this movie is the fact that they made some interesting predictions about the innovations in the future and the innovations eventually came to be. The other reason is the fact that they both took a realistic approach as far as how society responds to new inventions is concerned. The Trouble with Lichen This is a novel about a young lady who is working as a biochemist and wh o in the course of her day to day duties, stumbles upon a certain strain of Lichen that can actually be used to reverse the aging process in humans. It is from this Lichen that the novel draws its title, â€Å"trouble with lichen.† Supposedly, this strain of lichen can be used to lengthen the lifespan of an average human being to anything from two hundred up to three hundred years. The author of the novel approaches the issue by speculating on how the wider society would deal with such a discovery. There are two main characters in the plot of the book. The first is Brackley Diana and the second one is Saxover Francis. Both are biochemists who are involved in research. Saxover is a doctor and Diana is his employee. They are doing independent experiments to investigate the characteristics of certain strains of Lichen. Diana stumbles on a life transforming discovery when she notices that a certain strain of the lichen prevents milk from turning sour. The strain of Lichen that sh e discovered was rare and it actually originates form East Asia. She works tireless with the help of Francis Saxover and two eventually manage to extract a new drug from the Lichen. They call this new drug antigerone. Antigerone can be used to slow down ageing in the human body. Francis decides to secretly use the medicine on his family members and on himself to prevent their ageing. On the other hand, Diana sets up a spa and cosmetic business and starts using the product on a number of rich and