David Cunliffe betrays his ignorance on how taxes work

Mr. Cunliffe said that ACT’s policy of cutting the company tax rate from 28% to 12.5% would just transfer funds to the rich.

He is wrong. Under ACT’s policies everyone will benefit and the “rich” will still pay the normal tax on their income from companies. In fact it will be the workers who will benefit most.

Obviously Mr. Cunliffe does not know that wages rise in countries with lower company tax rates (such as Canada, Denmark, Finland, the UK, Sweden, Switzerland, Iceland and Ireland) because their workers have more capital to work with.

Mr. Cunnliffe also says that ACT has got its figures wrong and the policy is uncosted.

He is wrong on that score as well.

A 12.5% Company Tax rate by 2020 will result in more investment, more jobs, higher wages and greater output. ACT calculates that the Government would get additional revenue from this increased output of $625 million.

ACT’s plan to abolish both corporate welfare and the greenhouse gas trading system will save $1.7 billion of Government expenditure.

The rest of the company tax cuts are funded by a part of the $1.5 billion new policies allowances already provided for by the National Party in each budget from 2015 onwards.

It all adds up to a dynamic boost for companies, their employees and their customers.

Mr Cunnliffe should leave doing sums to his deputy the finance spokesman Mr Parker and try and escape from his Muldoonist mindset.

ends

© Scoop Media