Finance Committee should embrace honest fiscal policy

31 JANUARY 2017

The New Zealand Taxpayers’ Union today briefed MPs on Parliament’s Finance and Expenditure Committee on issues of fiscal drag and tobacco excise tax.

Fiscal drag:

“Inflation drags individuals into higher tax brackets, even when there is no real increase in their incomes. This is called fiscal drag, and is caused by the failure of politicians to permanently index tax brackets to inflation. It’s a regressive process because it only affects taxpayers earning below the top bracket of $70,000.

“Fiscal drag also leads to dishonest politics, allowing politicians to take more from taxpayers by stealth, despite not campaigning on it. It's an annual tax hike that's kept in secret.

“And fiscal drag hurts economic efficiency. Higher marginal income tax rates harm productivity growth, and therefore lower long run economic growth.

Tobacco tax:

“The new Government seems dependent on regressive tobacco excise tax hikes to achieve its Smokefree 2025 goal. This is absurd when they could simply legalise a much safer smokefree alternative to smoking.

“Under the current law, the sale of nicotine fluid for e-cigarettes is technically illegal.

“The harms of tobacco tax hikes – financial devastation for smokers and robberies of retailers – are significantly increased while the Government fails to legalise nicotine e-cigarettes.”

"It appears the only thing more addictive than smoking is the money the politicians are making from it."

ENDS

© Scoop Media