Monday, October 06, 2008

Tax cuts for whom?

Before Idiot Savant talks about National “looting the state for the benefit of their rich mates” shouldn’t the following be made clear?

According to the Treasury website, in 2007, those on the top income tax rate of 39% comprise only 14% of taxpayers (remember when Labour said it would be 5%?) but they pay 49% of all income tax. Nearly half of all income tax is collected from those earning more than NZ$60,000 per annum – itself a fairly paltry sum, especially for anyone raising a family.

That’s the rich – the ones actually paying for the state. Go to those earning more than NZ$90,000 and you find that is only 4% of taxpayers, and they pay 31% of income tax.

By contrast, 52% of the population earning less than NZ$30k (and not those earning nothing – e.g. children with no savings accounts) paid only 16% of all income tax.

So if the Nats miraculously got rid of the 39% top tax rate, as is ACT and Libertarianz policy, it would be handing back part of the money earned by those who pay 49% of all income tax.

Besides the point that someone who loots you (the state) can hardly be looting anyone when it gives you back your money in the first place – but even if the Nats DID cut taxes for the “rich”, it would hardly be giving money to those who hadn’t paid it in the first place would it?

Imagine an election slogan - love the rich - they pay half of all income tax already, pay to keep the same number of people and their families clothed, fed, housed, emi-educated and given healthcare, and are those most able to leave.

Imagine moreso, what would happen if that 14% left tomorrow?

The disappearance of half of all income tax revenue and 20% of all tax revenue would the least of your worries - think of all the occupations of those so hated by the left for being "rich". Think of what the economy might look like.

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