Do we need real income-tax cuts this year? Probably not.

Do we need nominal income-tax cuts? Yes, we do.

The government should go ahead with its proposed tax cuts, but only to low- and middle-income earners.

The tax cuts should compensate for the inflationary component of the cost-of-living crisis. But high-income earners – eg people receiving incomes in excess of $160,000 per year – should be willing to make a small sacrifice for the greater good.

To do this, the government – if it wants to be re-elected, and if it wants to do the right thing – should go ahead with its tax reduction policy; as per the National Party 2023 election campaign promise, but with one proviso.

The government should lower the top tax threshold of $180,000 to about $160,000.

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

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