‘Crisis’ but tax cuts for the rich keep coming

Marty G
13 years ago
Categories: budget 2011, public services, tax
Tags: cuts, income splitting, norightturn, shock doctrine, tax cuts

The Nats are telling us there is no other option than massive cuts to government spending. Roughly, a third of the cuts covers the earthquake rebuilding, another third covers the Nats’ tax cuts for the rich, and the last third covers the revenue loss from this neverending recession. So, how come the Nats can afford another round of tax cuts for the rich?

I/S at No Right Turn explains:

While National is planning the biggest assault on government services since the era of Ruth Richardson, it is also planning more tax cuts for the rich. The Finance and Expenditure Committee – on which the government has a majority – has reported back [PDF] on the Taxation (Income-sharing Tax Credit) Bill and recommended that it be passed. The bill allows couples with children to split their income for tax purposes – a feature found to be explictly discriminatory in violation of the Bill of Rights Act by the Attorney-General [PDF]. The total cost of the measure would be over $500 million a year – and 78% of it would flow to households earning over $70,000 a year (which is roughly the median for households consisting of a couple with children). While not mentioned in the report, that benefit will skew heavily towards the top end – in other words, the usual story of giving the most to those who need it least.

So, the poor get to pay for the earthquake. Meanwhile rich families with kids get a tax windfall. National is looking after its base again – and everyone else gets to pay for it.

And let’s not forget that there are $280 million a year worth of corporate tax cuts coming in on April 1. In the middle of their cries that public service cuts can’t be avoided, they’re cutting tax on foreign-owned corporates.

The fact that National is planning more rounds of tax cuts for the rich shows that their crisis rhetoric is just about excuses to do what they want: enrich the wealthy elite and rip off everyone else.

As I said yesterday, rather than cutting public services, the government could fill the hole in the accounts by restoring the top tax rate, stopping the corporate tax cut that comes in on April 1, eliminating the ETS subsidies to polluters, and not building the white elephant highways. Instead, they’re cutting yet more taxes for the rich and screwing the rest of us.