The cost of corporate welfare

The Taxpayers Union released a report on Friday:

• Since National took office, corporate welfare has cost taxpayers $1-1.4 billion ($600 – $800 per household) per year
• If corporate welfare was abolished, enough money would be saved to reduce the corporate tax rate from 28% to 22.5%
• If applied to personal income tax rates, the saving would allow the 30% and 33% income tax rates to be lowered to 29%
• Alternatively, the 10.5% rate (applicable to the first $14,000 of income) could be reduced to 7%.

Some of the corporate welfare spend is justified, such as tourism. But what Government often misses is the opportunity cost. That if we didn’t spend all that money, what could you do instead – such as cut taxes. Imagine the top tax rate being just 29% or the company tax rate 23%. That would help boost economic growth also.

I encourage people to read the full report by Jim Rose. Is very well done.