Dim-Post on Tax

No, it is not satire, but a couple of useful posts. First he rebuts a cliche:

Tax cuts for rich, paid for by the poor.’

That’s how Marty at The Standard (happy Lynn?) describes the working group recommendations. To me it looks more like tax cuts for the rich and middle class who pay income tax, paid for by the rich and middle class who use loopholes in the property and WFF tax laws to rort the current system. The working group recommends compensating low income earners for GST increases and I don’t think a lot of struggling families and beneficiaries are benefiting from, say, LACQ shelters or depreciation rebates.

Indeed. I think some (not all) on the left just hate the thought of the top income tax rate being reduced. Maybe Danyl’s other post quoting the TWG may convince them:

. . . out of an Inland Revenue sample of 100 of the highest wealth individuals in New Zealand, data indicate that only about half are paying the highest marginal tax rate on their income.

Tax Working Group Report, Page 27

The higher the marginal rate, the larger the incentive to avoid it. When Labour reduced the top tax rate from 66c to 33c in the 1980s, the amount of tax paid actually increased.

If National does reduce the top tax rate to 33c, that will only bring it back to what it was before Cullen increased it.