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

The triumph of mediocrity over aspiration

Although I did not vote for National, or any of the parties keeping the National led government in power, I did have some optimism that there would be a positive change. I knew it would barely be a fraction of what I wanted, and that it would be overlaid with the sort of folksy platitudes that patronise the vast majority of the population, most of whom are too uninterested to seriously challenge it.

However, there were, at least, two reasons to smile after the 2008 election. Firstly, Helen Clark and her government of control freaks was ousted. Nine years of government that believed it almost always had a role, to spend other people's money on things, to regulate, to set up strategies and inquiries, was finally at an end. Secondly, John Key is, at least, a self-made man. He at least in part represents the dream of many, so at least there would be some belief that the incoming administration would be in support of business, and would be sceptical about government providing solutions. Enough rhetoric had been thrown about by some in the National Party that there could be some hope of less spending, less government and less taxes, albeit at a fairly glacial pace.

This has proven to be, by and large, a delusion. Even the low expectations of optimism I had, are being frittered away.

The recent proposals to engage in the Roger Douglas style tax reform of the 1980s, again, by hiking GST and dropping some income tax, smack of the triumph of mediocrity over aspiration. National apparently believes that all of the bureaucracies that current exist have merit. It believes that the current levels of welfare dependency and the structures of both individual and corporate welfare set up by Labour, should largely remain intact. Indeed, the belief in the role of the state is such that National is embarking on road building plans that under the evaluation criteria it once stood by, are not worth it.

The arguments in favour of consumption taxes over income taxes may be quite solid, but the impact of this sort of reshuffling will be minor. It wont make a smidgen of difference to get New Zealand to be more productive, dynamic and innovative. It still smacks of the low value commodity based economy terrified its exchange rate would actually be worth enough to import high value goods from the rest of the world.

Why? Because National has demonstrated, once again, that it is not a party of serious change, a party that will shrink the role of the state and grant tax cuts as a result. It is a party to reshuffle the deck, a party too terrified to contemplate the sort of education policies even the British Conservative Party is gleefully waltzing into an election with. It is terrified of saying the word privatisation, as much as it did when it should have been confronting the economic retards of Winston Peters and Jim Anderton, though who really thinks that the state owning three competing power generation and retail companies is a serious long term strategy for the energy sector?

It is true to form, and sadly ACT is not making anything of this when it could and should. It could, positively, be arguing for things to go further, and National could give it free rein to make the sort of arguments it knows Labour never could - whilst remaining aloof from them (the implication being obvious - Labour would never advocate less government).

What will punish National the most is the simple fact that the increase in GST will fall most hard on those on lowest incomes. If you wanted to hand some rhetoric and a rallying cry for the left on a plate, increasing GST does it. For it not only hurts those who spend most of their earnings, but it also encourages the growth in a black market, a growth in trading via TradeMe to help avoid GST (and other taxes). The most recent TVNZ Colmar Brunton poll should, if Key was doing a Helen Clark, give room to pause. National was never elected to INCREASE ANY taxes, and the sleight of hand that it demonstrates is not fooling many.

Of course, given this is partly the brainchild of Bill English - the man who delivered National its most crushing defeat in 2002, because he couldn't confront Helen Clark's forceful (and believable) commitment to her principles, despite that government having legislated over private contracts with ACC and forcing Air NZ into a crisis because of its own dithering and nationalism.

However, maybe I'm wrong. Maybe New Zealanders just like governments that look like they are "doing something".

So would ACT bring down the government?

With the Nats now backing away from previous statements that a rise in GST is "not on the agenda" and is "not our policy", it appears the two parties the Nats need to govern need to make clear what their policies are.

According to Stuff:

National ally the Maori Party is nervous, however. MP Rahui Katene said the party was retaining the option of walking away from its confidence and supply agreement with National over a GST rise.

Good for the Maori Party. It knows only too well that a rise in GST will hit everyone, not just those who might get an income tax cut. Being seen to support an increase in the price of everything to offset tax cuts that may be seen to be for those on higher incomes could cost the Maori Party dearly.

However what about ACT?

Jane Clifton reports Rodney Hide saying:

"The new fiscal programme had only been made possible because of ACT, he said, and he would therefore like to thank all ACT's supporters, his fellow MPs and the members of other caucuses with whom ACT had worked so tirelessly to bring about much-needed reform."

Roger Douglas has rightly said "The spending cuts must come first. Once we have cut spending, then we can cut taxes. If we want to make the tax system more efficient, we need constitutional restraints against excessive levels of Government expenditure. It is only when we have stopped the Government from exploiting the taxpayer that we can aim for efficiency"

So it's view is clear then...?!?!

ACT either makes it clear it votes against this, and tells the Nats a flat no, or the government is brought down.

Or ACT votes for it, and risks splitting asunder.

The test is simple - is ACT a party that people voted for so that government could cut one tax but increase another?

Land tax - short memories

If you ever had doubts of the degree to which the National Party could be a political whore (which the shift from Muldoonism to free market economics and the recent return to elements of Muldoonism ought to show), take this issue.

When it was previously in government, the Bolger government abolished Land Tax.

For the current government to even contemplate it, or to not hit it on the head absolutely and finally, speaks volumes about how easily swayed the National Party is to the winds.

More importantly, the idea that a party that sold itself in part on the basis of lower taxes is contemplating new taxes to offset tax cuts, tells you even more about how a vote for National is not, and (with the exception perhaps of 1990, 1993 and 2005) has never been about reducing the size of government.

Matt McCarten wants your money

Given he believes in a bigger state, he believes in compulsory welfare, state monopoly education and health care, it is hardly a surprise.

However, he has an odd view of "fairness".

He thinks, as do most socialists, that the imperative behind those supporting the free market in wanting lower taxes is greed. They think simply that people who are relatively successful want more of their own money and to hell with everyone else. The concept that we actually are suspicious of an ever growing state, see abject failure in the state addressing poverty and social mobility, is beyond the likes of Matt.

You see he loves the state, the state for him is the embodiment of humanity. It is a democratic expression of the "people's will" and it both protects and serves. The more it does, the better we all are for it. Given Matt spent much of his political career advocating for the Alliance, an openly socialist political party, this is hardly surprising. He sees the state as an instrument to take by force from those he deems rich to give to those he deems poor - the rich implicitly having not earnt their money "fairly", and the poor, well it isn't their fault, is it?

Matt says: "We need our public services". Hold on. Who is this "we"? Most would accept that they need health care and education, but separating who pays for it from who provides it creates all sorts of problems of performance. Matt doesn't believe this though. He thinks that when people pay taxes they can keep the state health and education sectors accountable for what they receive, even though it's clear that this works rather badly. However, he has spent much of his life representing suppliers, as in workers. He hasn't ever represented consumers of services, and certainly not those paying for it.

He then goes into his favoured taxes, like capital gains tax and death duties. Then he brings up the tired old nonsense of financial transactions tax, without blinking an eyelid as to how the financial sector could avoid much of it by engaging in most transactions offshore.

He says "Most of us wouldn't even notice it. But those who buy big-ticket items would. That's why the ruling class won't do it.". If Matt put down Das Kapital for a second he might think that "big ticket items" might get bought offshore with offshore bank accounts, and there will be other useful techniques to avoid the tax. However, he's cleverer than those who seek to protect their money.

That's a phrase he doesn't understand. To Matt (and many others on the left) taxes are not the money of those who own it, but the state's money - so it can be used for the benefit of the vested interests who best convince politicians to spend it on them and then all others.

Then he makes something up: "Twenty-five years ago we were told that if we cut taxes for the rich and raised taxes on the poor then we would work harder and earn more. It was nonsense then. It's nonsense now."

Who told you that Matt? Who ever called for raising taxes on the poor? In fact, name ONE report or one person who ever supported this? It's a bright Marxist red herring, as nonsense as he says.

The bigger argument is what the role of the state should be. The welfare state in its current form has produced a culture of dependency and entitlement that is not earnt, and needs to be urgently addressed. By keeping those who pay for health and education far apart from those who deliver it, patients and parents find it difficult to influence outcomes and to ensure that those providing those services are accountable to them.

Other countries have adopted significantly more consumer friendly approaches to both health and education that are hardly radical. Sweden's voucher approach to education is difficult to rebut as a significant first step to increasing diversity and accountability for that sector. Singapore's approach to health care has also resulted in far higher degrees of accountability for service delivery, and a greater interest by individuals in their own health care.

Matt prefers the world of - you earn more, you consume less, then you pay more taxes to pay for the health, education and welfare of everyone else (few of whom are ever grateful for it). He likes state monopolies in those sectors so that the workers can command ever increasing incomes from taxpayers by organising themselves as labour monopolies, so that there are more workers, less work and more pay.

You see the very greed and so called selfishness Matt attributes to the rich is exactly what the trade union movement of which he is a part of, demands for its members.

Absolutely none of it is to do with fairness, none of it is to do with users of state provided services and certainly none of it is to do with taxpayers getting value.

It's just from each according to their ability to each according to their means for Matt.

Treasury still has some thinkers

Flat tax was put forward to Bill English as an option according to the NBR.

Pearls before swine some may think, as Bill English could never have the gumption to argue for a flat tax. He has none of the backbone needed to argue that just because people earn more, does not mean they should pay an ever higher proportion of their income to the state. You do not consume more of what the state spends its money on just because you earn more. Too many of the envy brigade on the left would say it is "giving money to the rich" when in fact it is letting people keep more of THEIR money.

Flat taxes are common in former communist countries like Albania, Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Romania, Russia and Slovakia. Indeed even former Yugoslav republics of Macedonia, Montenegro, Serbia and Bosnia Hercegovina have adopted it. Hong Kong has close to a flat tax system.

So moving towards a flat tax IS good policy, it isn't extreme, it isn't uncommon, it is a sensible way to show New Zealand as a low tax small government economy, and it would help attract people. It does mean getting rid of the two top income tax rates, and that means some proper culling of the state. Not the limp wristed "efficiency gains" that haven't delivered.

It means abolishing agencies and functions.

It means saying the government needs to do less.

You'd think a government with ACT in it, might start to do something about it. Wouldn't you?

Who is the thief?

Let's say the mafia strongarms money out of you and your business regularly, say it does so to "protect" you, but is not very good at it.

Let's say your much bigger neighbour finds ways to evade the mafia strongarming so much money out of his business, quite successfully.

Then is the fact the mafia got less money from your neighbour, because your neighbour hid its money in clever ways, means your neighbour has effectively stolen from you (because the mafia might have taken less had it had what it thought it should have got from your neighbour)?

Just a way of looking at this.

In rebuttal to this.

High taxes don't win votes or attract winners

Not when you've run deficits and borrowed the country into the ground.

The Daily Telegraph reports a massive swing to the Conservatives in the latest Yougov poll.

45% Conservative
27% Labour
18% Liberal Democrats

David Cameron has a 56% approval rating, vs Gordon Brown with a 69% disapproval rating. Not that the Tories have earnt it, they are just very lucky they didn't win the 2005 election.

Expect Labour to get a pounding in the forthcoming MEP elections for the European Parliament and the selection of local body elections that are run at the same time.

Meanwhile, the FT reports the new 50% tax rate will drive talent from the City of London.

The head of one City institution with a strong private client business fumed, “What are they trying to do, drive all the high-earners out of London?”

New York must be rubbing its hands with glee, and ready to welcome an influx of talent in a year's time.

Of course the knuckle dragging tracksuit wearing "werking peeepill" will think it's fair - and as a result the Tories are not promising to remove the new tax. Oh well, let the UK get what it votes for - and watch the talent leave.

IRD cuts seen differently by Labour

250 jobs to be axed from the Department of Legalised Theft - which can only help boost the economy, as there are less claws trying to clasp money from the productive.

However, I found it funny that Wellington Central MP Grant Robertson on Twitter said:

"250 jobs to go at IRD. apparently its a good time to ask people to take voluntary redundancy! services we get from IRD will suffer."

Services? What are they Grant?

IRD is the state institution that says you're guilty and you have to prove your innocence to it. It harasses people to pay for what they never asked for, for services whether they deliver what you want or not, all without asking - it takes.

I've never understood the mindset of someone who would work for IRD - what joy is there is forcing people to pay for government? What joy is there is forcing people to surrender between 20 and 40% of their income for monopoly education, health and pension schemes which are never accountable if they fail you, and which you can't opt out of?

USA and North Korea celebrate 15 April

For Americans some are protesting it as Boston Tea Party day, a day to protest taxes, as it is the day for the final lodging of tax returns for the Federal government. A tax code that is mind numbingly complex, give the likes of lawyers and H & R Block completely unproductive jobs helping people avoid the heavy hand of the US Federal Government pursuing its number one goal - taking money off of US citizens to pay for its activities. NOTHING the US Federal Government does is pursued with such relentless threats and assuming guilt (with you having to prove innocence) like it pursues tax.

CNN reported "CNBC personality Rick Santelli went off on Obama's policies live on air. "The government is promoting bad behavior," he said, his voice loud. He asked why Obama would make Americans who pay their bills subsidize the mortgages of "losers." Santelli said he wanted a tea party to happen in Chicago, to stand up and angrily demand "No more.""

The Ayn Rand Institute explains more clearly what the problem is:

"Today, thousands of Americans are joining modern day tea parties, named after the Boston Tea Party of 1773. They are protesting a government that, in the wake of today's financial crisis, is rapidly strangling their freedom, with endless bailouts, mounting regulations, reckless spending, and the promise of a crippling tax burden. Correctly sensing that the American system is being discarded, they seek to battle this trend by taking to the streets to register their outrage.

But today's statist onslaught is the result of a deeply entrenched set of ideas about the proper purpose of government. Virtually everyone today believes that unrestricted capitalism is immoral and dangerous, and that the government's role is to actively intervene in the economy in order to achieve the "public good." So long as these ideas remain unchallenged, and no positive alternative is offered, no protest will be able to change the country's course."

That is why a moral defence of capitalism is essential.

Don't expect the man who has engaged in the biggest exercise of fiscal child abuse in world history to do much substantively about it, he is part of the problem. President Obama is promising a simpler tax code according to the Wall Street Journal:

"It will take time to undo the damage of years of carve-outs and loopholes," Obama said. "But I want every American to know that we will rewrite the tax code so that it puts your interests over any special interest."

However, his record in combatting the special interests of his party is so far nil.

SO what about North Korea? Well 15 April is the birthday of President Kim Il Sung. Yes he has been dead since 1994, making North Korea the world's first necrocracy according to Christopher Hitchens. It's a public holiday in North Korea.

Just thought it was a curious parallel.

Kiwis get a tax cut - what to do with it?

Be grateful for it, although the Standard doesn't get it - a tax cut means you getting more of YOUR money back. It was never the government's in the first place. It hasn't been taken from anyone, it just isn't being taken from YOU anymore.

The left will bleat on about those who effectively pay next to no tax anyway getting no cut, not that the left promised any cuts for them anyway. Instead the left will evade the point that a tax cut is leaving people to have more of their own money, it doesn't "plunder the state" anymore than not being robbed isn't plundering from thieves.

So here is a simple guide for those who oppose the tax cuts. You have only two moral options for the money.

1. Gift all of the tax cut money to the state. You would have preferred it had gone there in the first instance. Don't pretend you're so retarded you need to be forced to pay money to an institution you wish did more, do it by choice; or

2. Gift all of the tax cut money to charities that support the social activities you say you are passionately concerned about. This may be education, health, social care, poverty, international aid, whatever. Then you might see results, the money will be going somewhere YOU care about, and you wont regret the tax cut.

Because, you see, if you oppose tax cuts, you oppose that money of yours being spent on you and your loved ones. You'd be a hypocrite if you didn't donate the lot.

So go on, what are you going to do besides get angry and jealous that richer people earn more than you (pay more tax anyway) and get more of their own money back when any tax is cut?

Support government programmes by choice

The Standard is bleeting on that you wont be forced to pay for so many state programmes it thinks are just dandy.

So my question is this - what is stopping those who agree with them paying for them by choice? Yes there is this incredible concept, astonishing in its equity and fairness, called choice.

If you want to support advertising that encourages kids to eat healthy, YOU pay for it. Why not? You go try to convince others to donate too. It's what charities and businesses do all the time.

If you want to subsidise the coastal shipping industry, then YOU pay for it. After all, if you think it's so good for others, why be a selfish prick and not try to keep it going?

If you want to subsidise the provision of water supplies to rural districts, then YOU pay for it. After all, just because banal councils couldn't run infrastructure efficiently, nor are ratepayers willing to pay for clean water, why should taxpayers do so?

Not the lazy "get the state to make everyone pay" violent collectivist nonsense that the left gleefully portrays as "caring" when it is nothing of the sort.

So go on - those on the left, spend your taxcuts on the things the government isn't spending money on that you want. If you spend them on anything else, you're a hypocrite. If you wont spend money on the government, why the hell should everyone else be forced to?

Rule out tax rises, go on

With PWC NZ Chairman John Shewan saying GST would have to go up to 15% and the top tax rate to 45% to fund the big spending promises of both parties, you do have to wonder if that was a strategic press release designed to undermine Labour's one time pledge to spend up large.

Thankfully that seems to have evaporated, perhaps as taxpayers didn't respond well to the government spending up big when others can't afford to.

Curiously, John Key didn't rule it out, just saying that if National does a half decent job at growing the economy, raising GST wouldn't be necessary. He should have said that National would rather cut waste and be more efficient than increase tax.

Understanding Nat's tax policy

So what are the Nats going to do? It's not so simple, but it is a step forward.

The Independent Earner Rebate is a fudge for extending Working for Families to single people, which is ok in itself, but complicates the tax system. Simpler, but more controversial to do away with Working for Families altogether.

The top tax rate inches down to 37% over 2 years, and the bottom rate from 21% to.... 20%! The threshold for reaching the 33% rate moves up to NZ$50,000, which is a step forward. Be grateful for small mercies, for that is what they are. If you want more, it's clear you'll have to vote for ACT, Libertarianz or United Future even (eeeks).

On top of that the Nats are maintaining a growth in real terms in state dependency on the grand fraud scheme known as national superannuation. You will continue to pay taxes for your parent's retirement in the hope that your children and other people's children will do the same. You will continue to pay taxes "towards retirement" and your estate will get absolutely nothing whatsoever if you die the day before 64, you'll get what the state says you get regardless of whether it invested the money wisely or not.

Yes I know most New Zealanders don't understand that it is fraud, yes I know that engaging in a rational debate about this sort of policy is beyond the feeble minds in much of the media, especially television, but why increase the dependency?

Roger Douglas understood the fraud of national superannuation only too well, although his solution was not one I agreed with. For National to abandon even discussing people saving for their own retirement, shows its great fear of the Muldoonist Grey Power lobby, and intellectual and communications vacuousness.

More fuel tax thanks to Labour

and the Greens, and NZ First, and United Future and Jim Anderton.

2c a litre next year, rising to 9.5c a litre by 2011. Yes, you needed that didn't you?

7c of it is to electrify the Auckland passenger rail network, which shows you how much of a great saving that will be, because fares can't recover that cost.
1c is for further upgrades to Auckland's rail network.
1c to help build the Penlink highway in Rodney District
0.5c to upgrade ferry terminals and a new ticketing system

Well it IS a Labour government.

National opposed it, but big surprise what did John Key say in response? *baaaahh meeeeee toooo* Getting used to National opposing policies it just never changes when it is in government? Getting used to wondering what the hell the point is in voting National yet?

The NZ Herald reported he "acknowledged a fuel tax as a "legitimate way" of raising money for electrification, but was concerned at the speed with which it would go up to 9.5c"

Meanwhile, according to the NZ Herald the rail worshipping Greens are unhappy that a small part of the new Auckland regional fuel tax, which largely comes from motorists is to be spent on - a road!! Yes, outrageous really - motorists paying for a road, when they should be happy to be paying for transport modes they don't use, and which aren't even within 10kms of them (rail). Given motorists on the North Shore will pay this new fuel tax and wont get a railway, maybe the Greens might ask why they should be paying this tax at all?

The Greens think the proposed Penlink road/bridge, to link Whangaparaoa Peninsula with the Northern Motorway, is inconsistent with the Auckland Regional Land Transport Strategy - a document that before Labour was barely relevant to transport planning (fortunately). It calls the Penlink project "pork-barrelling of the worst kind". Not that the Greens believe in special subsidies for projects no - I mean the Wellington trolley buses for example...

Unbelievable. So pillaging the pockets of road users, car users, taxi companies, bus and truck companies to pay the costs of building an electric rail network isn't pork- no, because those who use it wont be paying for it, but those who don't use it will.

Now the Penlink project was once meant to be a toll road, but its costs have blown well out and it is no longer viable - which tells you that it shouldn't be getting built at all as not enough revenue can be gained from tolls to pay for it - but for the Greens to feel blasphemed against because a new petrol tax may have less than 15% of its revenue spent on a road, tells you how disconnected from user pays they are.

Just think if car usage dropped 20% there wouldn't be enough money to waste on subsidising railways hmmm.

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.

Grateful for your tax cut?

Lucky little kiwis getting a tax cut, which I admittedly also benefit from.

Now you're meant to be grateful to Dr Cullen and Hel Clark Il for letting you keep a bit more of money that was yours to begin with.

So just think about that. If you hadn't worked, or invested your money wisely, Clark and Cullen wouldn't have had any money to take from you to "invest in the community" or other forms of doggerel Labour MPs go on about.

Don't forget also that if Don Brash hadn't made it an issue in 2005, it wouldn't be such an issue now. Labour nearly lost because of it.

Don't forget that as you take your tax cut back from Cullen's cold hands, he's also wasting your money on:
- Increasing the welfare state by increasing the Working for Families package;
- Making you pay for pensioners who want to travel on urban buses and train, by giving thm free off peak travel;
- boosting National Superannuation.

It was your money in the first place, would you thank a thief who gave you back a little from what he steals from you?

What politician will take on the IRD?

Not PC blogs about the appalling case of the IRD turning its back on a written agreement regarding GST.

"In 2001, members of the Inbound Tour Operators Council (ITOC) signed formal, written agreements with the IRD about the GST tax treatment of the fees they charge to overseas wholesalers for arranging tours.

The IRD advised in the formal, written agreements that the fees should be zero-rated, and the industry has followed this advice.

Now, however, seven years later, the IRD has advised the industry that it has changed its mind, apparently because it believes it made an error.

In a meeting with the industry last week, top IRD officials said they would not honour the formal, written agreements signed with the industry in 2001 and would now seek back taxes."

So the word of the state means nothing.

What do I expect the politicians of the main political parties to say AND do about this?

Labour and Anderton- nothing.
Greens - nothing.
Maori Party - maybe say something, but not the philosophical conviction to care
United Future - nothing, remember Peter Dunne chaired the last enquiry into the IRD's practices. He is now Minister of Revenue, especially nothing to see here.
NZ First - nothing. Winston did nothing as Treasurer after all.
National - say lots, hold an inquiry, do nothing. Although Whaleoil seems to have confidence in Bill English, I hope it is well placed.
ACT - say lots and support a more strongly worded inquiry, do little.

I hope I am wrong, but I have heard words before about IRD - it's time for action. Retrospective changing of minds should not cost the public, but should cost the IRD - I'd suggest the officials who drafted and signed the letter be made liable, and pay up the taxes. It was their job to be fair after all.

Greens ignore where welfare comes from

Sue Bradford is awfully upset that a Work & Income case manager allegedly told a welfare recipient, living off compulsorily acquired funds from other people, to "f' off" after she asked for a "food grant".

Most of the hoo ha about it is simply around her use of the "f" word, which is a bit of a yawn to me. It astounds me what offends politicians - not lying, not taking other people's money and spending it on all sorts of activities or indeed unprofitable businesses that nobody in their right mind would choose to spend it on, not the Police who pursue those who defend themselves, not calls for the state to continuously monitor the lives of every child, not giving food aid to a country that enslaves children as political prisoners.

No.

However Bradford's characterisation of the event she describes is telling in two ways.

First is her absolute abandonment of the idea that people have options other than going to the state in saying that Work and Income "has the power to grant or decline her very means of survival". Oh please Sue, she wasn't malnourished and emaciated was she? Could she not seek work? Could she not ask people to give her money or food of their own, out of their own choice? Work and Income after all isn't dishing out money it has been "given", but money that has been taken.

What it tells me is that the Greens think that the state should be the basic means for us all to survive, which works as long as the majority of mugs don't use it as such.

Second is the more telling refusal to acknowledge the other side of the ledger. Every dollar that a beneficiary receives costs more than a dollar taken, by force, from a taxpayer. The Greens ignore this, treating what beneficiaries have as "entitlements", as if you are allowed to live off of the back of others, by force. Imagine if beneficiaries asked their neighbours for help, or had to go door to door asking for assistance. No, the Greens prefer the clasped fist of the state and it threatening to confiscate your property and imprison you if you don't agree to give up some of your property to pay beneficiaries.

You see I'm more offended by the way taxpayers are treated by the Department of Legalised Theft (IRD). Behind the attempts to be friendly and helpful, IRD is an agency of threats, which it is quite willing to use to extract its cut from you. More importantly, the state treats you with more respect if you murder, rape and steal, than if you don't give it what it deems you should - in a dispute with IRD you're guilty till proven innocent. Funny how all those on the left who are so concerned about human rights and freedoms are happy for the state to live off this presumption of guilt.

See I'd rather like beneficiaries to have to ask for what they want - but not ask bureaucrats, but citizens. To go to a body where people donate money and make a case for having more, perhaps in exchange for doing something in return. I'd like the Greens to acknowledge that their big beloved Nanny State isn't some warm loving entity that can dish out prizes like Santa Claus, but an institution of violence - that takes money from taxpayers under threat of violence. The Greens want it to do more threatened confiscation of people's income and give out the cash as if it came off of some tree. It doesn't - state welfare is money taken from other people, and IRD does a lot more than say "f' off" if you ask to keep more of your own money to spend on food.

Tara Marks (the woman concerned) might think a little more about whether any should give a damn that she was "offended" compared to those who she is indirectly asking to be forced into funding her and her family. Note she is using the media to have a moan about how she was treated, rather than ask for some money - she's clearly hardly on her knees is she?

So United Future joins the tax cut game

As a party polling at the same level as Libertarianz, Peter Dunne has to be thinking whether he risks being a one man band after the next election. Don't forget that is exactly what he was after the 1996 election (when none of the Labour and National MPs who defected to what was then United held onto their seats), and the 1999 election when Libertarianz party vote beat United in a number of seats. He doesn't want to go back to that.

So United Future has launched its tax policy, which David Farrar describes. On the face of it he is offering a step forward. Three tax rates, of 10, 20 and 30%. It's far more radical than Labour, and I think more radical than NATIONAL would consider. After all it gets rid of the 39% tax rate, something National has been too scared to talk about because it doesn't have the courage or intellectual robustness to fight it (even though it opposed it in the first place). Give him credit, he has announced a comprehensive policy. ACT has announced half a policy (get rid of 39% and have a tax free threshold), National none.

However, for that you might ask Peter Dunne a few questions:

1. You're the Minister of Revenue. You have kept the current government in power for two terms, indeed you are PART of it. If you have such a radical approach to tax, why haven't you withdrawn providing confidence and supply and helped initiate an early election? (of course the Greens would probably step in). Do you like having it both ways or is the only policy that matters the completely wasteful Families Commission?
2. Would you achieve this with spending cuts? If so, where, given you are responsible for creating an obvious bureaucracy to abolish.
3. Given you're meant to be a party in the centre, should we expect you'll only back National if it implements a version of you're moderately worthwhile tax cuts? If not, why not?

Most importantly, a vote for United Future in 2002 and 2005 proved to be a vote for keeping Labour in power. In 2002 many opponents to Labour voted United Future to give Labour an alternative coalition partner to the Greens. In 2005, half of those voters returned to National because it had a chance of winning.

In 2008, you might wonder why anyone who wants a change of government would bother casting a party vote for a party that has helped kept Helen Clark in power for two out of her three terms, and whose most well known achievement has been creating a useless bureaucracy. The people of Ohariu-Belmont might also ask what he has done for them. I certainly don't know.