This is what Dr Cullen believes when he talks about what he ISN'T going to give back in tax cuts in the NZ Herald. So he wont institute a tax free threshold for income, so that NZ will remain one of the few countries where the government taxes children for having a paper round.
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This is, fundamentally, the difference between those on the left and libertarians. Dr. Cullen and the Greens (forever talking about "we" and "our" as if the state and individuals are indivisible) believe that taxes are not your money, but their money - their money to be used to pay for setting up a radio station, subsidising a business, buying a train set, paying for welfare - it's all their money. Taxes are moral to the left, they are the way by which the rich (spit) have their wealth (probably not justified) taken to be given to those who deserve it, or for a "higher purpose". The "national interest" being the reason why people are forced to pay for what Dr Cullen wants.
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Now you wont ever see those on the left talking about force, they prefer to ignore what taxation actually is. It isn't something people give up willingly - no. It is taken under threat of more being taken, and imprisonment. Don't forget, the state only presumes you're guilty of not paying your taxes - if you murder someone, you're innocent till proven guilty.
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You see the money taken in taxes is yours, you gained it by salary, wage, dividend, interest, sale or gift because someone chose to give it to you for whatever reason. However, most politicians think that it is their money, and moreover that you can choose between those who will take a bit more and those will take a bit less. That's going to be the parameters of the debate at the election. Dr Cullen is going to throw you a little bit back no doubt, and you'll be expected to be very grateful for that. The Greens will oppose it, because they believe the state should do whatever it thinks is right to make people behave correctly. National will offer you a little bit more than Labour, but still believes it isn't your money - it is the government's money.
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So what i want to ask is this. Whose money do YOU think it is?
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Many of you trust Dr. Cullen to buy you healthcare. Do you think you're getting a good deal from him? If not, why do you think John Key can do a better job?
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Many of you trust Dr. Cullen to buy your kids' education. Do you think you're getting a good deal? If not, why do you think John Key can do a better job?
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Many of you trust Dr Cullen to use your money to support businesses or other organisations of various kinds, including recording music videos, producing TV programmes. Would you choose for this to happen? If not, why do you think John Key would do it better?
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Many of your trust Dr Cullen to buy you a retirement income? Do you trust you'll get a good deal? If not, why do you think John Key would do it better?
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Got the picture?
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This is what arguments about tax cuts are about. Are politicians and bureaucrats better placed to spend your money than you are? Would you choose to spend your money on what they want?
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Ah yes, some of you say. What about schools and hospitals? You're happy to pay taxes for them. Are you? You get good value for money do you? What happens if you don't like the school, you can... no the money stays there. How about the hospital? Oh yes, you can't do anything about that either.
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How about if you gave Dr Cullen some more, so he could buy your groceries, would be simpler wouldn't it? Ah, you get that, but so many don't get why he shouldn't be trusted to buy your education or health care.
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You'll also notice that most politicians want you to pay taxes so you can pay for the education, health care and food of OTHER families. Ask them how many people you're expected to pay for - you wont get a straight answer, but the implication is that you're obliged to otherwise there is something wrong with you.
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You see I think it IS your money. So here's a trick to play this election. Do it at candidate's meetings or whatever way you can find - ask the magic question:
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Do you think the taxes I have to pay are my money or your money to use?
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If they say it is their money, congratulate them on their honesty and ask why they think they have to force you to pay for things they want.
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If they say it is your money, ask you when you can have it back because you think you can buy better healthcare, education and pensions than they can.
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No doubt you'll get all sorts of weasel words about taxation being the price for civilisation - bullshit. So tax havens are uncivilised are they?
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You'll hear something like "what about all the people who can't afford it"? In which case, why should you put up with substandard health care and education for the sake of those who'd rather spend their own money on something else? Why deny you choice because of others?
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You'll hear something like "most people agree with taxes". Say that "most people" once thought homosexuality should be a crime, and that the rights of minorities shouldn't be sacrificed because the majority wants them to be.
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You see a libertarian doesn't believe taxes are moral. Taxes are theft, legalised of course, but still theft. Those who do not produce taking money from those who do. Those who truly believe in less government will phase out taxes, and reduce them without a second thought. They will proudly hand back your money, but in exchange say it is up to you to buy education, health care, a pension and insure yourself against unemployment and the like.
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Will National do that?
7 comments:
In your first paragraph you seem to imply that you support a tax-free threshold of the kind ruled out by Cullen.
Do you think it is a good idea for a low earner, through bad choices or because they are young, to consume government services without paying a penny, while the rest of NZ's producers pick up the bill?
Do you think it is a good idea that the constituency of low earner's paying no income tax don't see the huge hole in their paycheck gouged by the government that the rest of us see?
How do you think such a constituency will react when further tax cuts are proposed, especially those Cullen can shoehorn "rich pricks" and "cuts in essential services" into his objections? Will such a constituency ever vote anything but Labour?
Scott, this post is one of the best I've read this year. I particularly your analogy about getting Cullen to buy your groceries!
Ad libertas, under a libertarian government there wouldn't be many government services for people in the taxfree threshold to receive 'without paying a penny for' ;)
writeups: I am referring to the situation as it stands, not the future ideal, since Scott wouldn't have implied his support for the tax-free threshold if he were talking about the future ideal, wherein there would be no tax at all.
fair enough. personally i'd say that a tax free threshold is a symbolic thing - something the government cannot take.
Personally, I agree with the idea of a zero tax threshold under the status quo.
Now I do understand the concern of some that poor people will not be paying for any of the services that they get, but at the present, they pay very little into the pot anyway - the data I have is dated now, but in 2006/07, those earning up to $20,000 made up 54% of the population, but only contributed 12% of the tax take (that was about $2.8 billion back then, and would have barely covered the cost of the unemployment and domestic purposes benefit.
However, when you think that over half the population contribute only 12% of the tax take, would you not agree that it would be far more efficient to give them the tax cut first - i.e. have a tax free threshold of $20,000? After all, everyone else will benefit as well since they will be getting back $4000 per annum, and it will allow for a massive cutback of the bureaucracy. All this for the cost of a mere $7 billion.
Further to that, you can use it as an opportunity to replace many of the supplementary benefits (Working for Families, Accomodation supplement, et cetera) without electoral punishment. That would generate much of the cash required for the tax free threshold.
Finally, New Zealand is one of the few OECD nations without a zero-tax threshold. Even Australia has one.
john-ston: Do you think efficiency is justification for a minority (46% in your figures above) bearing the entire burden of low earner's use of state services?
I agree the pittance low earners pay now is merely symbolic, but remove that obligation on them, then all pretense that each NZer contributes to the shared pot for the expenses we all incur is gone. We should call it what it is - the economic enslavement of a minority.
That income tax-free majority (54%) now has representation without the taxation. They have every reason to oppose tax cuts (of income) and privitisation (because they would have to pay for services again).
And do you really think the group of socialists that bring in a tax-free threshold will be willing to give up 12% of "their" tax take? IMHO, that burden will fall back onto the 46% minority in some other way (e.g. a new top tier rate).
Lastly, why do you think every other OECD nation having tax free threshold justifies us having one too? If every other OECD country took 80% of all income from their citizens and beat them daily should we naturally follow?
"john-ston: Do you think efficiency is justification for a minority (46% in your figures above) bearing the entire burden of low earner's use of state services?"
The minority will not bear the entire burden, because you forget about one tax - GST. Everyone pays GST, so everyone is still contributing to the provision of state services. All that would occur is that the collection of income tax would become far more efficient.
"I agree the pittance low earners pay now is merely symbolic, but remove that obligation on them, then all pretense that each NZer contributes to the shared pot for the expenses we all incur is gone. We should call it what it is - the economic enslavement of a minority."
Read above about GST. Also, mere symbolism means that you have employ hundreds more people at the IRD just to check through the million and a half who earn less than $20,000. Of course, couldn't you also argue that it would encourage people who stay at home to take on part-time employment?
"That income tax-free majority (54%) now has representation without the taxation. They have every reason to oppose tax cuts (of income) and privitisation (because they would have to pay for services again)."
Remember that they still pay GST, so they have representation with taxation. Also, let us not forget that it was only a hundred years ago where a large portion of the population had representation without taxation, and nothing went wrong. It was only as a result of the Great Depression that you saw the massive state apparatus start up.
Also, those people have every right to oppose tax cuts now because they generally do not get tax cuts. In terms of privatisation, how would their opinions change? They are opposed to it now.
"And do you really think the group of socialists that bring in a tax-free threshold will be willing to give up 12% of "their" tax take? IMHO, that burden will fall back onto the 46% minority in some other way (e.g. a new top tier rate)."
Actually, it was 12% of the income tax take, not total take. When you consider that all people will pay less tax, it only means a sacrifice of about 10% of the total take. Personally, I wouldn't want a new top tier rate; and the only increased burden would be because I would scrap the Byzantine system of benefits.
"Lastly, why do you think every other OECD nation having tax free threshold justifies us having one too? If every other OECD country took 80% of all income from their citizens and beat them daily should we naturally follow?"
Oh, for goodness sake, all you libertarians think of the most ridiculous scenario and ask it to us. First of all, 80% of income and daily beatings will never happen, and secondly, with every other OECD nation having a tax free threshold suggests that it is a standard.
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