- Date published:
7:54 am, June 17th, 2019 - 175 comments
Categories: act, benefits, business, david seymour, Economy, making shit up, spin, tax, taxpayers union, the praiseworthy and the pitiful, welfare, you couldn't make this shit up - Tags: trickle down
So the party of the 0.4% has spoken and intends to not only establish a freedom to abuse and insult, particularly to the hooded type, but they are also proposing a flat income tax. That will decimate the Government’s finances and mean that for the bottom 64% of taxpayers the amount of tax they pay will increase but hey.
Why would you do such a thing? Why give a professional on a quarter of a million a year a tax break of $44,000 while expecting most taxpayers to pay more tax? Well there is this novel theory that if you give the wealthy even more resources the benefit will trickle down on those below them and we will somehow all be richer.
This theory has the usual band of supporters:
MEDIA RELEASE: Proposed 17.5% flat tax would cause economic boom – https://t.co/ixh74NI1lD— Taxpayers' Union (@TaxpayersUnion) June 16, 2019
From the press release:
Union Spokesman Jordan Williams says, “This would be a huge shot in the arm to the business sector, and amount to massive savings for the average family.”
“A lower tax burden means more money for employment, savings, and higher wages. It would also better reward workers who progress in their careers, instead of punishing them with higher and higher tax rates.”
“The biggest losers from ACT’s policy would be the IRD, tax lawyers, and accountants, all of whom would lose work in the face of a simple one-rate system.”
It is funny that a self described union should be advocating for a tax increase to most of the people it purports to represent. Shouldn’t they be representing all tax payers, not only the wealthy ones?
The proposal is also odd because lawyers and accountants will, unless they have exceptional tax avoidance measures, benefit from it.
And what of this trickle down theory? Well even its inventor had a significant qualification, the tax being reduced had to be originally over 50% which New Zealand’s top tax rate is not.
And it does not work for very clear reasons. Rich people tend to either hoard their money, buy luxury items usually sourced from overseas, go on more overseas holidays, or invest more in real estate, thereby driving up prices and rent expectations. Very little of the benefit trickles down. If they were serious in their desire to help everyone they would be better off bypassing the middle man and giving the money to the bottom 64%.
And it completely ignores the needs of the state to adequately fund health, social welfare, education, police and so on. All of which are apparently in Act’s eyes nice to haves.
The right have this reputation of being good managers of the economics. I have always thought their skills to be more suited to snake skin salesmen.
The proposal is ridiculous. Only a party polling well within the margin of error would even think of making a proposal like this in the hope of attracting a few more close to the extreme to supporting it.