Get ready for a GST rise
That also mean regressives taxes.
Whatever these need taxes might be, they won’t apply to wealth or property.
They end up being another avenue to transfer wealth “upwards”.
I fully expect to see GST rise again with the income tax cuts.
GST disproportionately affects people who spend their entire income (‘the poors’) so it’s an effective way of hiding a shift in the tax burden.
Totally agree.
Scrapping the foreign buyers tax is just (as intended) going to heat up the property market.
I used to be all for taxing consumption, essentially as an excise tax, quite rapidly changed my mind when realising how disproportionate it is.
I think it depends when & where you use it.
There’s times where taxing consumption; particularly if targetted to more luxury goods rather than food etc would be a decent way to pull money back out of supply to try to rein in inflation.
Of course, just having a floating top tax rate would probably do a similar thing and be easier to administer.
Floating top tax rate? As in you adjust the top tax rate based on inflation?
I used to work at IRD many moons ago, and if the government changed the tax rates during the tax year everyone hated them. I can’t imagine doing it multiple times a year!
It’s all well and good for PAYE, but when you’re income is taxed annually it gets annoying to change the rate part way through the year.
Heh, well that was in part due to the inflexibility of FIRST wasn’t it? I wouldn’t suggest changing it every year, but I think responding to inflation with tax increases on those that can most afford it to reduce supply would be a better first port of call than chucking a bunch of people out of work by lifting interest rates heavily.
I mean I’m not sure it’s quite fast enough. When inflation is high, you don’t want to have to wait until the next tax year to do something about it. I guess it could be used in combination. You put up the OCR initially, then increase the top tax bracket as a next step, which prevents you having to put the OCR up as high.
I’d be curious if that actually has the impact you’re expecting. It removes money from the supply, which in theory helps inflation, but if it’s on the top 1% of earners, that money probably wasn’t being spent anyway. When people have more money and there’s a shortage of housing, then they pay more for houses. This pushes up the price of housing, in turn increasing inflation.
If you stop the top 1% from being able to buy mansions by taxing them more, this doesn’t have a lot of impact on the average sale price, and so I’m unconvinced it would help inflation by any meaningful amount.
You need to find the solution that stops supermarkets putting up prices, not the one that collects more tax money.
That is if we assume inflation is bad. If we collect more tax to feed back into the lower income group, perhaps inflation isn’t so bad after all?
Well yeah, there’s all sorts of reasons for inflation - and taxing to reduce over supply of money only solves that reason. High overseas inputs or transportation etc there’s not much any NZ government can do to combat.
You legend - that’s a great find!
Then again, i suspect they’ve run out of wiggle room:
Instead, the Government should bring discipline to its own spending, dump expensive pet political projects like Auckland Light Rail, and focus on getting infrastructure built more efficiently.
It’s hard to see how these can be done in tandem (without something ridiculous like privatising infrastructure to fund it all):
National remains committed to reducing the income tax you pay, building and repairing the infrastructure New Zealand needs and managing government finances responsibly
Hypocrisy!?
Clutches pearls
Hypocrisy is for the poors, when you’re rich it’s just good business.
This is beginning to feel like being driven by a drunk driver. They seem to be really clueless financially.
When they say “good for business” they mean Fulton Hogan and landlords.
That’s all they know: property and road infrastructure.
This makes them dangerous as economic managers. For example overinvestment in retail residential gives us dangerous rates of foriegn-held private debt, which weakens our economy and drags down our credit rating. There’s a comensurately low level of productive investment.
Increased income inequality means our economy is more sluggish at recovering from downturns (I’m not sure what alchemy produces that, but it’s a known phenomenon throughout the OECD).
The fact they’re just randomly fiddling with the tax settings to achieve these tunnel-vision goals around landlords, is scary.
They don’t care. They line their own pockets and their cronies’.
It’s about making the economy better for the clique not for everyone.
Temporarily better. This is the action of a parasite that weakens /kills its host, in terms of actually having a functioning economy.
That’s at least partly because the inner circle are mostly lobbyists turned MPs rather than technocrats turned MPs (the criticism sometimes levied at Labour). Have a look at Nicola Willis’ education and work history - there’s nothing in there that screams Finance Minister.
I think I will lose all my faith in humanity if we get another National government after the next election
It’s Labour’s election to lose, I’m sure they’ll fuck it up somehow though.
No it’s up to the press who gets elected. In the run up to the election it was non stop coverage of ram raids and crimes while National was saying they were going to stop all crime and put more people in jail. Once the election was over you heard nothing about ram raids again. The press is now saying National got elected and ram raids stopped and there isn’t crime worth reporting anymore.
Something similar will happen in the next election.
Now he saying no new taxes in the budget
But at the same time he’s saying theyre looking at “new revenue generating mechanisms” so I assume therell be some dancing on the head of a pin about what is a “new” tax.
Although it could just be a fool’s errand to try and read much into this. The quotes in the article are complete word salad.
