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

Werewolf Issue #49: Gordon Campbell Interviews Laila Harre

For 25 years, Labour and National have been in virtual agreement about the basics of economic policy, and differed mainly on how to go about managing its social consequences.

Such is the power of the economic orthodoxy that when opposition parties arise – say, in the shape of the Greens – their “credibility” is measured by the extent to which they give the appearance of learning and abiding by the ruling consensus.

The tension between the desire for change – and the inability of the current political framework to deliver it – creates openings for populists of all stripes. It is what has made the emergence of Internet Mana so interesting. More>>

 

Parliament Today:

Gordon Campbell: On National’s Electorate Deals

For all the talk yesterday from Prime Minister John Key about National being transparent about its electorate deals in Epsom and Ohariu, that transparency is entirely front-loaded. More>>

ALSO:

Greens: Oil Drilling Face-Off With Labour

The key policy points in the Green Party’s plan to protect our beaches from oil spills are to:
1. Prohibit deep sea oil drilling; 2. Implement compulsory shipping lanes for coastal shipping; 3. Build Maritime New Zealand’s oil spill response capability; and 4. Introduce a stronger legal framework so that when accidents do happen, the New Zealand taxpayer does not have to pay for the clean-up. More>>

ALSO:


Nick Smith v Fish & Game:

Minister Told Of FBI Investigation, Says INZ: Coleman Must Quit Or Be Sacked Over Dotcom Case - Harré

Immigration New Zealand has done the right thing in distancing itself from Jonathan Coleman’s claims that ministers were not aware of FBI involvement in Kim Dotcom’s residency application, says the Internet Party. More>>

ALSO:

Valedictory Season: Maori Party Founders Say Goodbye

Two major Maori MPs gave there farewell speeches to Parliament Thursday outlining their history, experiences, triumphs and regrets. More>>

ALSO:

Resignation Not Accepted: Transport Minister Breaches Aviation Security Rules

"Running late for a plane at Christchurch Airport, I without thought breached airport and airline security rules by entering the gate lounge through a door usually used for exit only..." More>>

ALSO:

TAIC Report: Urgent Recommendations After Melling Rail Accident

The Transport Accident Investigation Commission has made four urgent recommendations to KiwiRail following the accident two months ago (27 May) when a Matangi passenger train collided with a stop block at Melling Station, Lower Hutt. More>>

ALSO:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news