The Next Domino: Australia Doubles Tax On Retirement Savings

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man blog,

Though Australia’s national balance sheet is comparatively quite strong, the government has been running at a net deficit for years... and they’re under intense pressure to balance the budget.

The good news is that Australia now has a goodly number of investor-friendly immigration programs designed to bring productive foreigners into the country, similar to the trend we’re seeing across Europe.

On the flip side, though, the Australian government has just announced new rules which penalize citizens who have responsibly set aside savings for their own retirement.

Any income over A$100,000 drawn from a superannuation fund (the equivalent of an IRA in the United States) will now be taxed at 15%. Previously, all such income was tax-free.

The really offensive part about this is that the government is going to tax people’s savings ‘on both ends,’ meaning that people are taxed on money they move INTO the retirement fund, and now they can be taxed again when they pull money out.

The Cyprus debacle drew a line in the sand– fleecing people with assets, or income, in excess of 100,000 dollars, euros, etc. is now acceptable. This is the definition of ‘rich’ in the sole discretion of governments.

And make no mistake– if it can happen in Australia, which still has reasonable debt levels despite years of deficit spending, it can happen in bankrupt, insolvent nations like the US.

As you may know, US tax code allows for several different types of retirement accounts… and there has been a lot of talk lately about a ‘Roth conversion’.

This is to say that a US taxpayer can convert his/her traditional IRA to a Roth IRA. And the implications are enormous.

A traditional IRA is not taxed on the way in, but it’s taxed on the way out. So if you contribute $3,000 annually to your IRA, you won’t pay income tax on that $3,000. But the accumulated retirement savings is taxed in the future when you withdraw the funds at retirement.

Conversely, contributions to a Roth IRA are taxed each year with the rest of your income. But the accumulated savings are NOT taxed when you withdraw the funds at retirement.

A few years ago, Congress inked a deal to allow US taxpayers to CONVERT their traditional IRA to a Roth IRA. In doing so, Americans were allowed to pay tax on the accumulated gains in their traditional IRA up through that point, then switch to a Roth.

Congress was essentially saying, “We promise that we will only tax you now in exchange for not taxing you later.”

It certainly begs the question: How much do you trust your government?

Can we really expect the country that has racked up more debt than any other in the history of the world to keep its word? Can we really expect that 5 or 10 years from now, they won’t make another grab for cash?

If the Australian government can unilaterally change the rules and start double-taxing retirement accounts, so can the US. And the trillions of dollars in retirement savings in the Land of the Free is far too irresistible for them to ignore.

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HelluvaEngineer's picture

Good thing they didn't confiscate all the guns in Australia.  Maybe the people can...

Oh, wait, nevermind.

InTheLandOfTheBlind's picture

come on now,  we all know that the good queen would not sleep well if her former prison colony was armed....  these things are not good for the empire

kliguy38's picture

Just don't buy Gold you fochin' blokes.......

Pladizow's picture




Title of article: Get Ready for the Phoenix

Source: The Economist; 01/9/1988, Vol. 306, pp 9-10

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let's say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today's national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates - a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers. The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

But in spite of all the trouble governments have in reaching and (harder still) sticking to international agreements about macroeconomic policy, the conviction is growing that exchange rates cannot be left to themselves. Remember that the Louvre accord and its predecessor, the Plaza agreement of September 1985, were emergency measures to deal with a crisis of currency instability. Between 1983 and 1985 the dollar rose by 34% against the currencies of America's trading partners; since then it has fallen by 42%. Such changes have skewed the pattern of international comparative advantage more drastically in four years than underlying economic forces might do in a whole generation.

In the past few days the world's main central banks, fearing another dollar collapse, have again jointly intervened in the currency markets (see page 62). Market-loving ministers such as Britain's Mr. Nigel Lawson have been converted to the cause of exchange-rate stability. Japanese officials take seriously the idea of EMS-like schemes for the main industrial economies. Regardless of the Louvre's embarrassing failure, the conviction remains that something must be done about exchange rates.

Something will be, almost certainly in the course of 1988. And not long after the next currency agreement is signed it will go the same way as the last one. It will collapse. Governments are far from ready to subordinate their domestic objectives to the goal of international stability. Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice.

This points to a muddled sequence of emergency, followed by a patch-up, followed by emergency, stretching out far beyond 2018

- except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very trends that will make it mount are making the utopia of monetary union feasible.

The new world economy

The biggest change in the world economy since the early 1970's is that flows of money have replaced trade in goods as the force that drives exchange rates. As a result of the relentless integration of the world's financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile.

Alongside that trend is another - of ever-expanding opportunities for international trade. This too is the gift of advancing technology. Falling transport costs will make it easier for countries thousands of miles apart to compete in each others' markets. The law of one price (that a good should cost the same everywhere, once prices are converted into a single currency) will increasingly assert itself. Politicians permitting, national economies will follow their financial markets - becoming ever more open to the outside world. This will apply to labour as much as to goods, partly thorough migration but also through technology's ability to separate the worker form the point at which he delivers his labour. Indian computer operators will be processing New Yorkers' paychecks.

In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.) The absence of all currency risk would spur trade, investment and employment.

The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate - and hence, within narrow margins, each national inflation rate- would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be

forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.

The alternative - to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect.


Pencil in the phoenix for around 2018, and welcome it when it comes.

Copyright of The Economist is the property of Economist Newspaper Limited and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

aerojet's picture

Welcome it or rebel, I guess.  WTF?  Once the globalists have total economic control like this, do you really think individual liberty will be sustained?

MachoMan's picture

You can either fund them with the withdrawal penalties now...  or all of it later...  your choice (and I'm not sure they care...  which is why all the fearmongering to w/d).

TwoShortPlanks's picture

Australia's Gen-Y will save them!

As far as NWOs go, you people who point toward a not too distant horizon are kidding yourselves; not only is the NWO already here, the next cycle is going-down here and now.

Like I wrote earlier; "People talk about a coming New World’s not coming at all, it’s already here, and has been here for perhaps 300 years. What they are talking about is merely the next cycle within the existing NWO…nothing more!"...

..."If you believe this, then for you the truth is revealed; that the threat of a coming NWO is a False Flag event. It is a deliberate misdirection to distract you from the truth hidden in plain view. If you believe that a NWO may be coming, then by definition, you believe that a NWO cannot currently exist. This is precisely what they want you to believe. They do not want you to realize that the NWO has already been implemented incrementally over the past 300 years and especially since the propagation of the Global Central Banking Cartel "

They own the Central Banks already, they own most of the Gold already, they own all the currencies already, they have the world's governments in their back pockets already, they own the Intelligence Services, what they want, what they need, is for the world's population to be enslaved and reduced by 5.5 Billion.

All that is required is to smear the wealth across West to East, install World Policing Powers, remove gun rights, flip to a Global Backing SDR (ready to go already), and go 'Hard Treaty' on Agenda21.

They are now free to confiscate wealth in the form of currency (savings, super, whatever!), collapse wealth in the form of equity where only debt remains, and bleed off any value left in assets. If you don't believe this, get out from under that rock.

All this wealth will transfer into Physical Gold, not by a run of the public, but by BIS decree! Silver will benefit by proxy. 10oz is all you will ever need. The next generation will work their entire lives for just 1oz of Gold. If you don't believe this then do some math on annual mining rates divided by population, knowing all the above ground stock is already spoken for.

Logic: Mining rate is 1.5-2% of AGS/pa (Gold increases by 100% every 50-70yrs). Divide that by global population. All existing above ground stocks will be vaulted. Gold will not be traded, ergo, no Spot Price. Gold as SDR backing will need to be 100% so value must be above $134k/oz, initially. Later, once Bonds are supported, Derivative and Trade Account support will require SDR backing (Gold's Proxy) and all Gold will be centrally located to the BIS or CBs. At this time Gold price becomes completely meaningless as there is no free trade to assign a currency rate (every oz in the system will support over $1M today), Gold will have 'Good Will' value only and be assigned a value associated with a 'Commodity Basket'. There will be no $ sign attached to Gold, there will be an SDR to Commodity rate. This will lock-out ALL Private, Public and Commercial interests! Gold will be like air; invisible, priceless but 100% essential.

NOTE: The value of Gold is NOT in its' Spot Price when currencies die, it lies in the decades to follow when it is not traded, but sought to support the 'essential financial system' which remains as well as future expansion. Assuming home prices remain static (LOL), then 1/oz Gold will be equal to around 2 x average homes (related to Commodity Basket), therefore, an average wage saver would take 50-70 years to pay off 1/oz Gold, or, 1 Commodity Basket, or, 1Gld-SDR (number of oz's mined each year / currency expansion = 1Gld-SDR).

Here is your enemy:

The Custodial Framework
United Nations - Global Police
World Bank - Global Lender
International Monetary Fund - Global Debt Collector
Intelligence - Custodial Eyes & Ears (Mi6, Mi5, CIA, MSS, Mossad, FSB {KGB}, SIS, CSIS, ASIS, DCRI, BND etc)
Power & Control Centres - US Council on Foreign Relations, European Council on Foreign Relations, Club of Rome, Bilderberg Group, Royal Institute for International Affairs, Trilateral Commission etc.
Main Stream Media - Global Propaganda
Hollywood - Global Propaganda and epicentre for Alternative/Pagan/Kabbalic/Ancient Mystery Religious interests.
Agenda21 - ICLEI, UN, Club of Rome

The Custodial Network
Bank for International Settlements - Global Banking Computer Network for the movement and transfer of Global Currencies (the Back Bone)
London Bullion Market Association - Physical distribution and controlling agency of Gold (real wealth)
Central banking Network - Physical distribution and controlling agency of Global Currencies (medium of exchange for services, goods and labour)
Organization of the Petroleum Exporting Countries – Global distributor and controlling agency of Global Oil (consumable real wealth)

BigDuke6's picture

Nice. if it a little paranoid for my tastes

As a fellow aussie all i can say is remember the stuff on ZH is USA centric.

it doesn't apply here in certain areas.. eg i fixed the interest rates on a couple of loans 2years ago after the hyperinflation chat here and have lost a stack.

things will take longer to hit oz

but this

"The good news is that Australia now has a goodly number of investor-friendly immigration programs designed to bring productive foreigners into the country, similar to the trend we’re seeing across Europe.''

Lefty socialists are always keen to invite the new elites into their country and fuck poor old Gen Y - dont u think?

TwoShortPlanks's picture

ZH is just one channel.

To get outside the system BRICS must scramble for physical Gold to back a Yuan SDR. China, Russia, India, Brazil are doing what exactly...hedging?

Ranga has been on all fours in China last week scrambling to establish a Yuan-AUD exchange, thus a AUD-to-Yuan/SDR.. The year before last year she was on all fours in the US offering Darwin access for US Military....Game changer or Light Bulb moment for the Office of National Assessments/ASIS?

Defence Signals Directorate states that Chinese entities have been hacking Aust RBA to gather Intel on "RBA's position on cash rates for next quarter" (LOL!). Let's get this one right, how about, Chinese military and University hacking Pools have been actively hacking the RBA to attain the RBA's position on Aust Gold Reserves as well as Cash Rate projections BEFORE Ranga flies over to China to get down and dirty. They are merely using Cyber-Intel to ascertain Aust Govs legitimacy for upcoming talks, and ongoing strategic alliance.

Allowing " investor-friendly immigration programs " is simply a PRE-TALKS BRIBE on China's new administration, and a crutch for Oz real estate, yes, at the expense of Gen-Y.

IMF is fighting to morph a Monetary Union into a Eurozone Fiscal-Politico Union. This is critical for the SDR!

The signs are everywhere.

Big Duke 6 says, "welcome out-a the Stone Age, son"

BigDuke6's picture

Its clear RE will be protected at all costs here - reassuring? ... hmm.  Labour will scorch the earth with promises to the plebs between now and august

Gold is interesting to buy here as its more how the price changes in relation the the USD.

I'm gonna stack some more at US 1.05...  god help me. You a goldbug in these hard times?

TwoShortPlanks's picture

Fear-not, Australia is the Link Pin between the Empire and the East....and they aim to keep it that way.

Australia WILL eventually join BRICS.

I've not had much success in hoarding PMs...I keep loosing them.

McMolotov's picture

Engaging in a bit of tin foil hattery, isn't The Economist considered (by some) to be a mouthpiece for the Rothschilds? So the question then becomes whether this article was a prediction or a plan?

NotApplicable's picture

"Directed history," as labeled by the fine folks over at the Daily Bell.

Too bad Tyler doesn't have their site on the blogroll.

Buckaroo Banzai's picture

“We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.”. --James Paul Warburg, Feb 17, 1950, before the US Senate

vulcanraven's picture

Isn't the Economist a Rothschild owned publication?


Connect the dots...

NotApplicable's picture

As always, Maggie Thatcher's TINA rules.

They paint us all into a corner which they painted previously.

Kirk2NCC1701's picture

By "World Currency", they mean the SDR -- the ultimate fiat currency, par excellence!

Remember I've been saying for some time now that TPTB will eventually tank the fiat currencies together, to make way for the OneCoin?  Whereby YOU become the walking, talking Bitcoin?  Well, yesterday I saw a bunch of HSBC posters in an airport about The Future.  One of them really caught my eye and attention.

It showed your finger tip, with a Bitcoin-like stamp on it, and the caption: "Your DNA will be your data".

I rest my case.  Bitchez.

DosZap's picture

By "World Currency", they mean the SDR -- the ultimate fiat currency, par excellence!

Remember I've been saying for some time now that TPTB will eventually tank the fiat currencies together, to make way for the OneCoin? Whereby YOU become the walking, talking Bitcoin? Well, yesterday I saw a bunch of HSBC posters in an airport about The Future. One of them really caught my eye and attention.

It showed your finger tip, with a Bitcoin-like stamp on it, and the caption: "Your DNA will be your data".

I rest my case. Bitchez.

WHEN this time comes, and only one form of (so called money is worth anything), it will not matter, as the END of the world as humans have known it will shortly be totally over.Take the mark, and your eternally screwed,refuse and die from starvation( a far superior way to go,than the other route).


twh99's picture

It may not be by 2018, but I assume eventually there will be one world currency.


Probably in Nicks though not Phoenix.

ATM's picture

There is already a world accepted money - gold.

knukles's picture

YoMommas budget due out this week is gonna have a proposal to tax any IRA withdrawals (in the aggregate) in excess of $205,000 at a higher tax rate than normal.

Get fucked for doing what you're supposed to... take care of yourself

johnQpublic's picture

on a long enough timeline the survival rate for every retirement account drops to zero

CheapBastard's picture

knuckles, maybe they are trying to push people into the Roth IRAs which are super-flexible and non-taxable over a certain age when you wothdraw I read. I notice that's where most Congress people have their loot stashed. Of ocurse, when you transfer your IRA to the Roth, you are immediately taxed on that amount.

I don't know...just guessing.

redpill's picture

Not far enough, these fucking savers need to be thrown in jail!  We can't stand idly by and let them horde precious resources that Chinese manufacturers need!

InTheLandOfTheBlind's picture

just makes sure the cost of the jail is cheaper than what they are fleeced of.

Thomas's picture

There is another problem with the Roth IRA: You pay the very high "marginal tax rate" going in to avoid paying a much lower "effective tax rate" coming out. Nobody does this math but it obliterates the case for a Roth IRA, and now it is about to get worse.

redpill's picture

It also makes the flawed assumption that just because the government today promises that it won't tax you when you finally take it back out that they will stick to their word.  You think they would be above "making the tax code more fair" by double-taxing ROTH IRA money over a certain account size?  I can almost hear Obamafucker saying it.

If you're going to put it in a retirement account, take the tax refund while you can get it! 

phalfa5's picture

nice point(s) Thomas 


SmittyinLA's picture

The cost of jail is irrelevant if you can finance it and take a cut too

RafterManFMJ's picture

Jail them?! That's going to cost money RP.  I say part them out...kidneys, eyes, hearts - all those parts add up to some very serious cashflow.

wee-weed up's picture

The First Mattress Savings & Trust is looking better every day.

Winston Churchill's picture

I tend to the Bank of Posturepedic NA myself.

darteaus's picture

"Golden Matress company; how may I direct your call?"

Plata con Carne's picture

California King Credit Union!

johnQpublic's picture

theres a counting sheep while mattress stuffed with gold joke in here somewhere

Banksters's picture


Oh, criminal politicians lie about their intent, spend money on nonsense, and then rape unwitting savers and retirees.  Where does a cut of it all go: TO THE PARASITIC BANKERS>




Inthemix96's picture


What you lot doing with yours then?

Sweet fuck all mate.  Same as us plebs eh?

TheGardener's picture

My heart bleeds for Australia. Back in the eighties they
called off the introduction of a national ID card with the threat of a general strike. Now they `re most advanced
fascist corporate nation state with no more attacks on their commodity dollar. What a coincidence. Could be a colony on Mars, bad science fiction movie stuff.

What happened to the robber barons ? Some dead, some still rule the world , having left the prisoners colony behind them for New World Order. My name is Bond, well I`m gone.
But me they call me the murder-dog, well I`m an American citizen now and watch out your very word, I bought all
wording on the planet.

Agreed, mateship is volksheim is national socialism.

New world incoherence even in frontier states worth shit,
there is no place to run, nowhere to hide.

ANP being the last hope and killed by death squadrons (TRG),
what a hopeless outpost Australia has become.

hannah's picture

"Good thing they didn't confiscate all the guns in Australia."...confiscate..they didnt confiscate anything. those pussies turned their guns in willingly...ha! i didnt see any shoot outs or protestors. talk to an aussie and they will say that they are safe and dont want gun ownership....LOL.

awakening's picture

"talk to an aussie and they will say that they are safe and dont want gun ownership....LOL"

I am an Aussie, I don't feel safe and let alone just one gun would have loved to have my own private armory (I would have made a fortune on the prices of ammo today). While I don't have any firearms in my possession; I do know how not to shoot my own mouth off and make an ass out of myself (assume - make an ASS out of U and ME ) so would certainly handle them with far more respect then you seem to based off that little post of yours.

DosZap's picture

Seems like the "ONE OFF", scheme has ENLIGHTENED some heretofore trustworthy gubs.I think WE all know where this headed.GET OUT ASAP.

duo's picture

And my accountant wonders why I paid the 10% penalty...

Winston Churchill's picture

Before it becomes a 100% penalty.

LawsofPhysics's picture

Indeed.  Shit, pay the 50% penalty or take the 150% haircut (after inflation).  Seems like a no-brainer.

Smegley Wanxalot's picture

Your accountant may be right.  Because you paid a tax and a penalty, and now they are going to cyprus what you have left over. 

Had you left it there they'd just cyprus what you had and saved you the penalty, which would leave to more to spend as they say, and when they say it.


Unless you have one of those fancy spanish safe-mattresses.

yrbmegr's picture

I wonder how much difference there really is between cyprus-now and cyprus-later.

Smegley Wanxalot's picture

Assume 100k, 35% tax, 10% penalty, 40% haircaut.


Take out 100k now = pay tax & penalty of 45k (reminder 55k), and your haircut later of 40% (22k) of the remainder when the bank wants your money leaving you with 33k out of your 100k.


Take out 100k later = pay haircut of 40k, leaving you with 60k.  This may move you into a lower tax bracket, but assuming 35% holds on the remaining 60k they fuck another 21k out of the remainder, so you net 39k.


Now, if you have a matressafe, you can hide the 55k by taking out the cash now and avoid the coming haircut, which beats holding it in an IRA to avoid the penalty, but if you trust the banks and they demand the haircut, you are fucked.  Only civil thing to do is hide what you have from the govt and corp thieves and keep your mouth shut because your friends will fuck you over.  And dont say jack to your wife.