web analytics
The Standard

Polity: Key: Pathological liar about tax

Written By: - Date published: 3:05 pm, May 18th, 2014 - 29 comments
Categories: gst, john key, tax - Tags:

polity_square_for_lynnHere’s Key on Radio New Zealand last evening:

But Prime Minister John Key said he categorically denied his Government was interested only in helping the rich, saying the Budget aimed to help a wide range of New Zealand families.

“I utterly reject those propositions. Twelve percent of households pay 76 percent of all net tax in New Zealand,” he said.

Get that: “all net tax in New Zealand.”

That claim is a complete lie.

The calculations Key is relying on exclude the over $15 billion that New Zealanders pay in GST, which is around 40% of the total tax taken from individuals in New Zealand. As I’ve said before:

Doing net tax calculations while excluding GST is like doing calorie counts while excluding nibbles, dessert, and drinks.

And, as I have noted both here at Polity and over at Pundit the other times National has tried to peddle this lie, GST is much more heavily loaded on lower income families, compared to income tax. That means including GST will markedly change how much “net tax” is estimated to come from various groups.

The Treasury has even warned English about the misleading effects of not including GST, and still the fibs keep showing up in National press releases.

When I did the correct calculations for National in 2011 – accounting for GST – I found that the top ~10% of households actually pay around 43% of the total net tax on individuals. They also earn around 30% of the income and have over 50% of the wealth.

That is a far cry from Key’s dishonest dog-whistle.

29 comments on “Polity: Key: Pathological liar about tax”

  1. Lanthanide 1

    Actually I believe this is a misquote of John Key by Radio NZ. I listened to him make this statement and I’m sure he said “76 percent of all net income tax”.

    I’m trying to find the actual audio on Radio NZ’s website but haven’t had any luck so far.

  2. Gosman 2

    It is no bigger lie than the view that poverty and inequality have increased dramatically under a National. These sorts of statements tend to be spin rather than outright lies.

    • felix 2.1

      Nope.

      “76 percent of all net tax” is an outright lie, not spin.

    • McFlock 2.2

      Child poverty has.
      Of course, that relies on the government not undercounting it (by accident, I’m sure /sarc)

      • Gosman 2.2.1

        Stats NZ is the main body that collects data in this area. Are you implying they have been politically compromised?

        • McFlock 2.2.1.1

          Fuck off, it was Treasury was involved too.
          Treasury have been politically compromised for at least 4 decades.

          Was it an intentional undercount to keep the nats in power? I don’t think so. I reckon the more likely explanation is that a randian superhero in treasury didn’t give a shit about the measure so phoned it in.

          Fuck, Treasury didn’t even give a shit they fucked up: “[T]here are no ‘real world’ impacts on New Zealanders from the miscalculations,” Treasury chief economist Girol Karacaoglu said in a statement.

          Apart from making it seem that national aren’t quite so cruel to children as they really are. If they’d undercounted 20,000 cases of child assault, heads would roll. But because we disguise it with the name “poverty”, they don’t care.

    • Actually National’s figures saying they’ve stayed still on inequality rely on excluding capital gains, so your comparison is a bit of a non-starter, given the very wealthiest people in our society don’t even have salaries.

    • Tracey 2.4

      so spinning is what, not a lie but not a truth? a mythical limbo planet where ethics dont matter.

      how much of the total income do those top folks earn?

  3. Melb 3

    They have 30% of the income, pay 43% of the tax, and you’re still complaining?

    • Colonial Viper 3.1

      The number 43% needs to be far higher, and needs to touch the net asset base of the country’s top 5%.

      The reason for this is the principle of progressive taxes – once you have enough to be financially secure week to week, say $1000 pw gross, you have to contribute far more in taxes as a proportion.

    • The Lone Haranguer 3.2

      Really? $1000 per week, then tax the “rich”

      Even with a few sproggs, you get tax credits on an income of only $52,000

    • mickysavage 3.3

      The sad thing is that 1% of the population has a huge disproportionate share of the income. They share some of their super profit so that society can survive and function and still kiwi kids suffer from third word diseases.

      Wouldn’t you prefer to live in a world where everyone had enough?

    • You seem not to get the concept of disposable income.

      When you have a $20,000.00 annual income, not much of it is disposable. Almost everything goes to bills and food, if not everything.

      When you have a $2,000,000.00 annual income from capital gains, very little of it is required to stay fed, healthy, and engaged with society, so you can afford to pay much more than an even share of tax. (although if all your income is from capital gains, you actually pay a below-average share given you’re not paying any tax on your income, just GST and other non-income taxes) You most likely have tens of thousands of times more disposable income than someone on 20k or even 50k a year, which is fine, but it means that it’s by no means unfair if you pay, say, 50% of your income as taxes.

      • Draco T Bastard 3.4.1

        You most likely have tens of thousands of times more disposable income than someone on 20k or even 50k a year, which is fine,

        No, it’s not. No one is worth thousands of time more than anyone else.

    • SpaceMonkey 3.5

      Wouldn’t it be a better indicator to express amount of tax paid as a percentage of income/revenue to get a better picture of who is paying what? Add GST and other sales taxes into the mix and lower income people are paying a disprotionately high amount of tax based on income.

    • DS 3.6

      They pay 43% of the tax, with 50% of the wealth.

  4. vto 4

    I think the rich are starting to get nervous actually.

    true

  5. Lloyd 5

    Its the rich or those who think they are rich that create recessions, playing with their assets.

    Tax the rich hard enough and recessions go away.

    (Of course there is a point where you tax the rich so hard there are no rich any more, then who do you blame? – I guess the state needs to leave the rich some pocket money, otherwise they would end up being on the benefit – shock horror)

    • Draco T Bastard 5.1

      No society can afford the rich. We can afford for everyone* to have a reasonable living standard with that encompassing a small spread of inequality.

      As long as we’re not over populated.

      • Chooky 5.1.1

        DTB +100…and as a bottom line there must be equality of opportunity..in:

        1) education(free state high quality education through to PhD level) special education for those with special needs

        2) equal health access ( free)

        3) high quality environment protection for all to enjoy…open access as far as possible ( no exploitation of rivers and no more population)

        4.) housing ( affordable and plentiful for New Zealanders only) ( no foreign investment which sucks off New Zealanders and undermines Nzer’s right to their own housing stock)..people who own rental properties should be taxed accordingly

        5) employment ( employment must be made available for all who want it….and in particular there must be no under 30s unemployed unless they are ill )

        6) UBI

        7) Financial Transaction Tax

        http://thedailyblog.co.nz/2014/05/16/hone-heke-financial-transaction-tax-now/

        That should do it…now what party do i vote for?

  6. Rosie 6

    Well said Chooky!

    As far as I am aware, Mana are the ONLY party who understands the immense burden GST has on households.

    I thought this was an eye popper:

    “The calculations Key is relying on exclude the over $15 billion that New Zealanders pay in GST, which is around 40% of the total tax taken from individuals in New Zealand…..”

    Have you ever worked out the average you pay each week in GST? I haven’t done a thorough account of it but I know it really puts the screws on our weekly budget. I resent it and I resent the immorality of it. Imagine if the burden on the poor, working poor and middle income earners was put rightly back on to financial speculators via a FTT. The relief on household budgets would be dramatic. You might even have a little money left over to do something nice, which helps the tills ring too. Every one would benefit.

    • Chooky 6.1

      Mana is increasingly sounding very attractive….GST hurts those at the bottom of the economic heap the most , with the least money to spare for essentials, let alone any left over for discretionary spending …it is a very unfair hidden tax imo

      ….i rather like the Financial Transaction Tax because it gets those at the other extreme end of wealth and there are big dividends to be squeezed out and some of the richest banks are so wealthy they would hardly notice it imo

      ..of course they would squeal but they would get over it…and they would live in a much nicer society

  7. Goon 7

    Typical Tories think their responsibility to their fellow man begins and ends with having a job.

  8. feijoa 8

    I remember the Social Credit Party talking about at FTT
    Does anyone here know much about it – do any counties use it and what sort of money does it raise?

    • Chooky 8.1

      (more on your question as to what countries use it )

      ……while quite a few countries support the global concept of FTT and many charities and organisations support it ( eg On 15 February 2010 a coalition of 50 charities and civil society organisations launched a campaign for a Robin Hood tax on global financial transactions. The proposal would affect a wide range of asset classes including the purchase and sale of stocks, bonds, commodities, unit trusts, mutual funds, and derivatives such as futures and options.[55])

      Most hedge funds managers fiercely oppose FTT.[129] So does the economist and former member of Bank of England Charles Goodhart.[149] The Financial Times,[150] the Asia-Pacific Economic Cooperation Business Advisory Council, the Confederation of British Industry, and the Adam Smith Institute have also spoken out against a global financial transaction tax.[151]

      IMF’s position[edit]
      In 2001, the IMF conducted considerable research that opposes a transaction tax.[152] On 11 December 2009, the Financial Times reported “Since the Nov 7 [2009] summit of the G20 Finance Ministers, the head of the International Monetary Fund, Mr Strauss-Kahn, seems to have softened his doubts, telling the CBI employers’ conference: ‘We have been asked by the G20 to look into financial sector taxes. … This is an interesting issue. … We will look at it from various angles and consider all proposals.'”[153] When the IMF presented its interim report[21][22] for the G20 on 16 April 2010, it laid out three options: a bank tax, a Financial Activities Tax (FAT), and a third option (which was not promoted but not ruled out), a financial transaction tax.[101] On 16 April 2011, the IMF stated, it does not endorse a financial transaction tax, believing it “does not appear well suited to the specific purposes set out in the mandate from the G-20 leaders”.[21] However, it concedes that “The FTT should not be dismissed on grounds of administrative practicality”.[21]

      http://en.wikipedia.org/wiki/Financial_transaction_tax

  9. Chooky 9

    @ feijoa …here is Martyn Bradbury on it :

    “If progressives in NZ want extra funding to combat inequality, the money has to come from somewhere. A Financial Transaction Tax forces those with the most to pay vast sums of revenue that can be ploughed into the social and economic infrastructure.”

    ( read more plus view clip from ‘The Banker’ on the FTT )

    http://thedailyblog.co.nz/2014/05/16/hone-heke-financial-transaction-tax-now/

    http://en.wikipedia.org/wiki/Financial_transaction_tax

  10. feijoa 10

    Great
    Thanks for the info. Based on who opposes it, it must be good!

Links to post

Recent Comments

Recent Posts

  • National must lead by example on climate change
    The National Government must meet its own climate change obligations before it preaches to the rest of the world, Labour's Climate Change spokesperson Megan Woods says. "Calls today by Climate Change Minister Tim Groser for an end to fossil fuel… ...
    10 hours ago
  • Biosecurity rethink a long time
    The Government has opened New Zealand’s borders to biosecurity risks and its rethinking of bag screening at airports is an admission of failure, Labour’s Primary Industries spokesperson Damien O’Connor says. Nathan Guy today announced a review of biosecurity systems in… ...
    1 day ago
  • Chinese rail workers must be paid minimum wage
    KiwiRail must immediately stop further Chinese engineers from working here until they can guarantee they are being paid the New Zealand minimum wage, Labour’s MP for Hutt South Trevor Mallard says. The Ministry of Business, Innovation and Employment today released… ...
    1 day ago
  • Better consultation needed on Christchurch asset sales
    The Christchurch City Council (CCC) should be promoting wide and genuine public consultation on its draft ten year budget and plan given the serious implications for the city’s future of its proposed asset sales, outlined in the plan. Instead, it… ...
    GreensBy Eugenie Sage MP
    1 day ago
  • ‘Healthy Families’ a good start but not enough to tackle obesity relate...
    Today the Government is making a the meal out of the launch of its ‘Healthy Families’ package to promote ‘healthier decisions’ and ‘changing mindsets’ over nutrition, physical activity and obesity. Great! The programme is based on a successful model from… ...
    GreensBy Kevin Hague MP
    1 day ago
  • ‘Healthy Families’ a good start but not enough to tackle obesity relate...
    Today the Government is making a the meal out of the launch of its ‘Healthy Families’ package to promote ‘healthier decisions’ and ‘changing mindsets’ over nutrition, physical activity and obesity. Great! The programme is based on a successful model from… ...
    GreensBy Kevin Hague MP
    1 day ago
  • No more sweet talk on obesity
    The Government should be looking at broader measures to combat obesity rather than re-hashing pre-announced initiatives, Labour’s Health spokesperson Annette King says.  “While it is encouraging to see the Government finally waking from its slumber and restoring a focus on… ...
    2 days ago
  • Government two-faced on zero-hour contracts
    The Government should look to ban zero-hour contracts in its own back yard before getting too high and mighty about other employers using them, Labour’s Health spokesperson Annette King says. “Information collated by Labour shows at least three district health… ...
    2 days ago
  • Scrutiny of battlefield deaths should continue
    As New Zealand troops head to Iraq under a shroud of secrecy, the Government is pushing ahead with legislation to remove independent scrutiny of incidents where Kiwi soldiers are killed in hostile action overseas, Labour’s Defence spokesperson Phil Goff says.… ...
    2 days ago
  • Damp-free homes a right for tenants
    Labour is urging tenants to use a little known rule which gives them the right to live in damp-free rental homes. Otago University researchers have today highlighted the Housing Improvement Regulations 1947 as a way tenants can force landlords to… ...
    2 days ago
  • National must take action on speculators
    The Government must take action on property speculators who are damaging the housing market and shutting families and young people out of the home ownership dream, Labour Leader Andrew Little says.  “There are a number of options the Government could… ...
    3 days ago
  • Milk price halves: A $7b economic black hole
    Global milk prices have halved since the peak last year, creating an economic black hole of almost $7 billion that will suck in regions reliant on dairy, crucial industries and the Government’s books, says Labour’s Finance Spokesperson Grant Robertson. “The… ...
    3 days ago
  • Kitchen plan set to swallow up health boards’ funds
    The financial impacts of implementing a proposal to outsource hospital food, forced on them by a crown-owned company which is now facing an auditor-general’s inquiry, are being felt by district health boards across the country, Labour’s Health spokesperson Annette King… ...
    3 days ago
  • Reserve Bank scathing of Government
    The Reserve Bank’s most scathing critique to date of National’s inability to handle the housing crisis shows the Bank is sick of having to pick up the pieces, Labour Leader Andrew Little says.  “John Key continues to deny there is… ...
    3 days ago
  • Time for McDonald’s to upsize work hours
    Labour is calling on McDonald’s to have more respect for their workers and offer them more guaranteed work hours. McDonald’s is proposing to guarantee its workers 80 per cent of their rostered hours, Labour’s spokesperson for Labour Issues Iain Lees-Galloway… ...
    4 days ago
  • Brownlee misses the boat on asbestos
    Gerry Brownlee has once again missed an opportunity to improve the lives of Cantabrians post-earthquakes, Labour’s Canterbury Earthquake Recovery spokesperson Ruth Dyson says. A new report from the Royal Society of New Zealand and the Prime Minister’s Chief Science Adviser,… ...
    4 days ago
  • Government must come clean on troop deployment and protections
    New Zealanders deserve more than to hear about their troops’ deployment overseas from Australian media, Opposition Leader Andrew Little says. “News from Australia that Kiwi troops are on their way to Iraq this week is another example of the culture… ...
    4 days ago
  • Cancer prevention calls gain momentum
    Research showing bowel cancer treatment sucks up more public health dollars than other cancers once again highlights the need for a national screening programme, Labour’s Health spokesperson Annette King says. A study by Otago University, which found colon cancer is… ...
    4 days ago
  • Burger King shows zero-hour contracts not needed
    The abandonment of zero-hour contracts by Burger King is further evidence good employers do not need to use them, Labour’s spokesperson on Labour Issues Iain Lees-Galloway says. "Congratulations to the Unite Union and Burger King for settling an employment agreement… ...
    4 days ago
  • Kiwis deserve more than reheats
    The Government looks set to rely on regurgitated announcements for this year’s Budget if today’s speech is anything to go by, Labour Leader Andrew Little says. “National has been building up to this Budget for seven long years, promising a… ...
    4 days ago
  • Landlords not cashing in on insulation schemes
    The fact so few landlords have taken up the generous taxpayer subsidy for retrofitting shows it is time to legislate minimum standards, says Labour’s Associate Housing spokesperson Poto Williams. “Many landlords aren’t using Government insulation schemes because they don’t want… ...
    5 days ago
  • Zero excuses, end zero hour contracts now
    It’s time Workplace Relations Minister Michael Woodhouse cut the weasel words and banned zero hour contracts, Labour Leader Andrew Little says. “Michael Woodhouse today acknowledged zero hour contracts are unfair. ...
    5 days ago
  • We’ve reached Peak Key with ‘artificial target’
    John Key’s attempt to redefine his cornerstone promise of two election campaigns as an artificial target suggests his other promises are works of fiction, says Labour’s Finance spokesperson Grant Robertson. “For seven years and two election campaigns, John Key has… ...
    5 days ago
  • Top 10 need to know facts on climate change
    All the numbers and stats around climate change can be confusing, so we’ve put together a handy list of the top 10 numbers about climate change that we should all know- and then do something about. You can sign up here to… ...
    GreensBy Frog
    1 week ago
  • Campbell Live a bastion of investigative journalism
    The announcement that current affairs programme Campbell Live is under review and may be axed has sparked outrage from the New Zealand public, for good reason, says Labour’s Broadcasting Spokesperson Clare Curran. “Investigative journalism is a precious resource in today’s… ...
    1 week ago
  • Ground Zero for ‘disastrous’ contracts
    Yesterday the Green Party called on the Government to follow the leadership of Restaurant Brands and ditch zero-hour contracts. Currently it looks like the Government is a large part of the zero-hours problem. It allows these types of “non-jobs” to… ...
    GreensBy Jan Logie MP
    1 week ago
  • Trust in National will disappear with deficit
    Bill English is set to break his promise to get the books back in the black this year and lose the trust of Kiwis who have had to do it too hard for too long, says Labour’s Finance spokesperson Grant… ...
    1 week ago
  • Dorothy Jelicich passes away
    It is with sincere sadness that the Labour Party conveys its sympathies and condolences to the bereaved family of Dorothy Jelicich who passed away last night at the age of 87 years, says the MP for Mangere, Su’a William Sio.… ...
    1 week ago
  • Government leaves aquaculture industry at sea
    If the Government had acted in its first term, the Sanford mussel processing plant would not have to close, says Labour’s Fisheries spokesperson Rino Tirikatene. “Sanford is considering closure after a decline in the natural supply of spat. This is… ...
    1 week ago
  • Maggie –it’s time to roll your sleeves up
      It’s time for the Minister of Conservation Maggie Barry to listen to the Parliamentary Commissioner for the Environment  and start untangling the mess around  New Zealand’s stewardship land, says Labour’s Conservation spokesperson Ruth Dyson.  “The Commissioner has called for… ...
    1 week ago
  • Gutting of prison jobs a gift to private prison provider
    Today’s announcement that sections of three prisons are to be closed is the thin end of the wedge for the privatisation of the country’s prison service, says Labour’s  Corrections spokesperson Kelvin Davis.  It's estimated that 260 prison officers will lose… ...
    1 week ago
  • Joyce must rule out revising export target
    Steven Joyce must rule out a second revision of the Government’s export target in six months and stop trying to massage statistics when he fails to meet his goals, says Labour’s Economic Development spokesperson David Clark. “National set a target… ...
    1 week ago
  • Caregiver law passed in haste now a fail
    The Government’s response to supporting family caregivers is mean spirited and designed to fail, says Labour’s Disability Issues Spokesperson Ruth Dyson.  “Figures released by the Ministry of Health show that only a tiny percentage of the eligible families have applied… ...
    1 week ago
  • Clear message handed to nuclear states
    MPs Phil Goff, Shane Reti and Marama Fox are due to meet with diplomats from the United Kingdom, Russia, the United States, China and France tomorrow to hand deliver a letter calling for their countries to disarm their nuclear weapons.… ...
    1 week ago
  • Parity is no party for export businesses
    The extent of the damage done by the high dollar to New Zealand businesses is larger than many think as shown by a dramatic decrease in exports to Australia as our dollar rises, Labour Leader Andrew Little says. “When the… ...
    1 week ago
  • Nats’ limited thinking stifling innovation
    Businesses trying to innovate and create better products are being let down by this Government with an industry expert saying Steven Joyce’s mini-tax credits will have almost no impact, says Labour’s Finance spokesperson Grant Robertson. “Andrew Dickeson, director of taxation… ...
    1 week ago
  • Vanishing Nature: A must-read for all New Zealanders
    The Environmental Defence Society’s new book Vanishing Nature – facing New Zealand’s biodiversity crisis, should be read by every New Zealander concerned about our native plants and wildlife and striking natural landscapes; and particularly by Government Ministers before Budget Day… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • The CYF review – an exercise in predetermination?
    Child Youth and Family (CYF) has a troublesome history of underperformance and botched care and protection cases, the most recent being its abject failure, along with the Police, to address the Roastbusters sexual abuse allegations with any semblance of professionalism.… ...
    GreensBy Metiria Turei MP
    2 weeks ago
  • Time to act to protect Hector’s Dolphins
    The death of a Hector’s Dolphin in a set net must lead to action from the Minister of Conservation, Ruth Dyson, Labour’s Conservation Spokesperson said today. “Despite the fact that the Akaroa Harbour has been a Marine Mammal Sanctuary since… ...
    2 weeks ago
  • Double-laning Darby and Joan disputed
    The Prime Minister’s by-election promise to double lane the road between Northland’s iconic Darby and Joan kauri trees has been contradicted by officials, Labour’s spokesperson Phil Twyford says. The NZ Transport Agency has told a media outlet that not all… ...
    2 weeks ago
  • Parity: Cheaper trips but lower incomes
    The Kiwi dollar’s near-parity with the Australian means some tourists will have cheaper Gold Coast holidays but New Zealand incomes will stay lower for longer, making it harder for many to afford the trip, says Labour’s Finance spokesperson Grant Robertson.… ...
    2 weeks ago
  • English’s state house flog off plans exposed
    Labour is calling on Bill English to confirm or deny a claim the Government is exploring a mass sell-off of state housing to tenants. Property magnate Bob Jones writes in a newspaper column published today that the Minister responsible for… ...
    2 weeks ago
  • Extension of work scheme urged for disaster relief
    The Government is being urged to extend the Regional Seasonal Employment (RSE) scheme to help families in the most severely-damaged islands of Vanuatu, following Cyclone Pam. “Allowing a further 300 people to take up seasonal employment in New Zealand under… ...
    2 weeks ago
  • Nuclear deal with Iran should be just the start
    A deal struck by Iran and major powers to ensure the Iranian facilities producing nuclear material are not used for the purpose of constructing nuclear weapons has been a long time coming, Labour’s Disarmament spokesperson Phil Goff says. “Undoubtedly Iran’s… ...
    2 weeks ago
  • Green Aoraki Newsletter March 2015
    Attachmentsmarch2015_web.pdf - 1.4 MB ...
    2 weeks ago
  • Minister needs to do his homework
    Nathan Guy needs to do his homework, Labour’s Primary Industries spokesperson Damien O’Connor says. “Answering questions in Parliament today on the dairy sector, the Primary Industries Minister denied John Key wants to float Fonterra. ...
    2 weeks ago
  • Minister needs to put the kibosh on dirty diesel
    State-Owned Enterprises Minister Todd McClay has to get a grip on the KiwiRail board and put the kibosh on its crazy plan for dirty diesel on the main trunk line, Labour’s Transport spokesperson Phil Twyford says. It has been revealed… ...
    2 weeks ago
  • Louise Nicholas Day: Work still to do
    This is a summary of a speech I gave in honour of Louise Nicholas Day on March 31 The IPCA report showed us basic mistakes are still able to be made within a specialist unit. The Police Commissioner said there… ...
    GreensBy Jan Logie MP
    2 weeks ago
  • The meanness and pettiness of Nats in power
    Last night, Parliament debated NZ First MP Tracey Martin’s Bill to ensure children in the long term care of family members were able to access a clothing allowance currently only available to children in foster care. Many of these children… ...
    GreensBy Jan Logie MP
    2 weeks ago
  • Defence Force’s Hotshots given cold shoulder
    The latest victim of the Government’s cost-cutting drive looks set to be an organisation that has provided vital services and support to defence force staff and their families for 67 years, Labour’s Defence spokesperson Phil Goff says. “Labour understands Gerry… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere