20 May 2010

Hone Harawira is right

Yep I don't say that too often.

According to Stuff "He was having difficulty supporting a tax increase that made things easier for the wealthy "at the expense of those in need".

"GST hits poor people the hardest because nearly all of their money is spent on things that you pay GST on – food, petrol, electricity – so any increase is going to really hurt them.""

Yes, and you don't need to be a socialist like Hone to realise that consumption taxes do this because those on low incomes spend more than they save.

There can, of course, be income tax cuts. In fact simply winding back government spending in real terms to what it was in 1999 would enable the deficit to be abolished and for the top rate to be scrapped and the 33% rate to be cut without raising GST.

Imagine the change in economic activity and international perceptions of NZ if government did scrap the spending outlined by Roger Douglas, wound back spending to 1999 levels, scrap middle class welfare such as "working for families", put serious caps on welfare and see the top rate drop to 21% for income and company tax, and make the first $14000 tax free.

Hone Harawira would be arguing about spending cuts (yes you wont get subsidised broadband, your university fees would go up with inflation and welfare would be far tougher), but he'd not be arguing about tax because those he is interested in would be paying less. Everyone would be.

However, I forgot, many of you elected a Labour Lite government led by Helen John Clark Key with Michael Bill Cullen English as Finance Minister.

After all Labour only increased income tax once (the 39% rate) and then reduced income tax once, and did not ever increase GST.

UPDATE: Oh NOW I know why you voted for Labour National, David Farrar makes it clear it is about staying in power for three terms. Quite why you'd choose the blue team over the red team to keep implementing the red team's policies is beyond me


ZenTiger said...

Blue team? I thought I was going colour blind. They both look fairly red.

With you on the tax plan too.

Jeremy Harris said...

How are the Lib-Dems shaping up..? Seems people like the wealth being shared and will only vote for those that promise to do it...

Libertyscott said...

Jeremy: Lib Dems concentrating on "civil liberties" and political reform this week.

I find the main people who like wealth sharing are those without wealth, not those who created it. Funny that :)

Still, in the UK the focus is a budget deficit of £163 billion. Transport will be getting a big cutback across the board.

Jeremy Harris said...

Well those are some pretty good things for the Lib Dems to focus on...

That budget deficit is unbelievable, I was watching the budget today and cringing when English said that our net government debt would peak at $60 odd billion and 30 odd% of GDP and wondering how to reform the Reserve Bank, or introduce competing currencies, so the government has to face the budget realities I do every week, but that English deficit can't go on more than a year or two...

Surely you'll be thinking about coming home when it hits 100%..?