Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Craig Can't Count

Craig Can't Count

Blog: Dr Jamie Whyte, ACT Leader
23/06/2014


The tax policy Colin Craig announced yesterday will increase income tax for everyone who earns more than $36,000. That is almost everyone in full time employment.

Craig’s policy is to make the first $20,000 of income tax free and then impose a flat rate after that. But, astonishingly, he doesn’t say what that flat rate would be. Perhaps he hasn’t worked it out.

Well, we have. The flat rate applied above Craig’s $20,000 tax-free threshold would have to be 33.6%. That’s higher than the current top rate of income tax which kicks in at $70,000.

The fact that ACT has had to calculate what Craig’s own flat rate would be reveals the frivolity with which Craig and his Conservatives approach public policy. They want you to vote for them on the basis of their tax policy. But they do not bother to tell you what rate of tax you would end up paying.

For those who are interested in the real implications of Craig’s tax policy – which apparently does not include Craig or his colleagues – here is how it would work out.

Income tax now contributes $29.8 billion to government revenues. Since Craig proposes no changes to other taxes nor any specific changes to government spending, we must proceed on the assumption that income tax will still raise $29.8 billion. All the income above $20,000 earned in New Zealand totals $88.7 billion. $29.8 billion is 33.6% of $88.7 billion.

As mentioned above, with a $20,000 tax-free threshold and a flat rate of 33.6% thereafter, everyone earning over $36,000 will pay more tax than they do now.

Nor will this policy do any good for marginal tax rates: that is, the rate of tax people pay on their next dollar of income, which is what affects economic incentives. The marginal tax rate will increase for anyone earning over $20,000. For those earning between $20,000 and $48,000, it will increase dramatically: from 17.5% to 33.6%.

Contrast the Conservative’s efforts on tax with ACT’s. In our Alternative Budget, published in May, we showed how the company tax rate could be cut from 28% to 24% and the top rates of income tax from 30% and 33% to 24% by eliminating $4 billion of government spending on corporate welfare and middle-class welfare. Our tax proposal reduces marginal tax rates for anyone earning over $48,000 and increases them for no one.

Our alternative Budget also treats our audience with more respect than the Conservatives do. It provides the rationale, details and calculations that anyone would need to understand and evaluate our tax policy. The Conservatives’ policy is so half-baked that we have had to work out their flat rate for them.

Craig should be embarrassed. And voters should steer clear of this man and his party. Politics shouldn’t be a game for wealthy buffoons.

ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

17 Year Sentences In Baby Moko Case: Attorney General On Plea Bargain

“The Crown’s decisions in this case, including the decision to accept the manslaughter pleas, were motivated by the need to secure convictions for this horrendous killing and to avoid the significant risk that either of the defendants could escape such a conviction because of evidential issues.” More>>

ALSO:

No Rail For New Harbour Crossing: National Giving Up On Rail In Auckland

The National Government’s decision to scrap two planned rail lines in Auckland shows it is giving up on a city-wide rail network in Auckland, and on thousands of commuters who sit in traffic jams every single day, the Green Party said today. More>>

ALSO:

Gordon Campbell: On The Ombudsman’s Verdict On Paula Rebstock And Ian Rennie

Unfortunately, the brave and damning report by Ombudsman Ron Paterson on the “flawed” and “unfair” inquiry conducted by Dame Paula Rebstock into events at MFAT pulls back the veil on a far wider issue. More>>

ALSO:

Charities' Report: Stressed Families - Overstretched Services

“Like so many of the whānau and families they serve social service organisations are under huge financial stress. The support demanded from desperate people in communities is far outreaching the resources available.” More>>

ALSO:

Detention: Wellingtonians Protest Treatment Of Refugees

Peace Action Wellington (PAW) and around 50 Wellingtonians blockaded the Australian High Commission, creating a symbolic detention centre to protest the Australian Government's policy of mandatory offshore detention for refugees and asylum seekers. More>>

ALSO:

Diver's Alarums: Breach Means Training Provider Must Repay $1.47 Million

The New Zealand School of Outdoor Studies is to repay $1.47 million (GST-exclusive) to the Tertiary Education Commission (TEC) following an investigation which showed that some student enrolments between 2009 -2014 could not be validated and that courses were under-delivered against their agreement with the TEC. More>>

ALSO:

Education: Government Plans Suggest Bulk Funding Return

Plans by the Government to return to bulk funding are likely to see increased class sizes and schools most in need missing out on much-needed resources, Labour’s Acting Education spokesperson Grant Robertson says. More>>

ALSO:

Interim Report: Auckland Looks Long Term To Pay-Per-Km Road Pricing

Aucklanders can expect to be paying variable rates per kilometre to travel on the city's most congested roads under an emerging transport strategy being formulated by the government and the Auckland Council. More>>

ALSO:

Despite Promises: Government Extends Iraq Deployment

Cabinet has agreed to extend New Zealand’s contribution to the joint New Zealand-Australia mission to train Iraqi Security Forces until November 2018. More>>

ALSO:

On The 'Terrorism' Card:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news