Federal Labor yesterday pledged to crack down on wealthy Australians who use family trusts to avoid paying income tax.
They plan to impose a 30% tax rate on distributions from family trusts.
Mr Shorten said 98% of Australians would not be affected by the crackdown. It would target high-income earners who use trusts to split money to other family members in lower tax brackets, which cuts their tax bill.
The changed would raise $17 billion in revenue over the next decade and the tax would apply on distributions made to people over the age of 18.
What Mr Shorten fails to mention is that trusts are the legitimate structure of choice for small business owners in Australia. These small businesses employ 4.7 million Australians representing 45% of private sector employees.
$17 billion extracted from these predominately family owned businesses will have a massive negative impact on the economy and the lives of these hard working people that put their houses on the line to build a better future for their families, their children, their employees and their communities.
Mr Shorten also fails to mention the potentially significant costs of restructuring and of administering the proposed new rules.