A Tax Cut For Every Worker

…well, that used to be the Act Party’s slo­gan. Not any­more sadly.

After read­ing through the debate between The Stan­dard, Idiot/Savant and DPF, it looks like the best pos­si­ble retort – because both DPF and the left­ies are argu­ing at cross-purposes. It doesn’t mat­ter if you’re talk­ing about house­holds, fam­i­lies or indi­vid­u­als. The prob­lem is that pro­gres­sive tax sys­tems inher­ently tax the wealthy more; so the wealthy always ben­e­fit the most from cuts to any of the rates of tax, whether they’re the low­est or high­est rates. That’s the whole point of a pro­gres­sive tax system.

So as soon as you talk about cut­ting income tax, those at the bot­tom always get the least, because they pay the least pro­por­tion­ally. Key’s prob­lem – apart from break­ing a promise on pay­ing GST (sure, that’s a free hit for the left – and Key’s reac­tion should’ve been “yeah I broke a promise – but I’ve spent a lot of tax­pay­ers money look­ing at fix­ing the tax sys­tem, so it was a promise I’m jus­ti­fied in break­ing” not some dopey defence of being quoted out-of-context – but I digress) is that any attempts at reduc­ing tax for the poor will trickle upwards. The only alter­na­tive is fur­ther tin­ker­ing with Wel­fare Work­ing For Fam­i­lies, or some other kind of tax credit for poorer households.

It would be far smarter to sim­ply scrap WFF and intro­duce a tax-free thresh­old for every­one who’s not actu­ally a net con­trib­u­tor to the government’s rev­enue – in other words, a tax-cut for every worker. The top tax rate could then fall as all house­holds ben­e­fited, albeit still with increases in GST. Of course, gov­ern­ment spend­ing in other areas would need to be cut (as it has to anyway).

Tagged as: DPF, FCK, Idiot/Savant, No Right Turn, Tax, The Standard

Tagged as: DPF • FCK • Idiot/Savant • No Right Turn • Tax • The Standard