On Tuesday, John Key told us that we don’t matter. In fact, he said that we have to be taxed more to give money to the rich because they are so important and we are not. To top it off, he told us not to be ‘jealous’ (two insults there – assuming we are ‘jealous’ of the rich and invalidating any sense of injustice we feel).
Well, that went down like a cup of cold sick. So, now reducing the top tax rate isn’t about giving tax cuts to keep this vital (more vital than you) people in New Zealand. It’s about ‘closing loopholes’. The loophole is that if a high income person runs their income above $70K through a company or trust they can end up paying 33% or 30%, rather than 38%.
How would you close the loophole? Well, you would make it impossible to abuse trusts and companies this way, eh?
Ah, but you’re not as cleverly as these Nats (probably why they’re so highly paid). Rather than closing the loophole they make the tax cheats’ job easier for them by abolishing the top rate altogether. ta da!
Historically, loopholes were gaps in castle walls or trench walls for firing arrows and guns. So, you can think of the Nats’ ‘solution’ to the tax loophole as like knocking down the castle wall as a ‘solution’ to the gap in it.
Put it another way, it’s like solving murder by making it legal.
But hey, it’s all about keeping valuable people (who must be rich, by definition) in this country, or about closing loopholes, or was it about boosting growth through the magic of trickle down (which is kind of like helping a dehydrated man by giving water to someone with an already full bladder and hoping they piss on him)?
Whatever, just don’t be jealous, OK?