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Key out of touch on taxes

Written By: - Date published: 9:30 am, December 14th, 2010 - 37 comments
Categories: class war, gst, john key, tax - Tags: ,

Do you feel better off after the great tax swindle? If you do you’re one of the few lucky ones. Key’s tax cut favoured the rich, and he broke his promise to raise GST for everyone. Net result — bugger all — unless you’re a high income earner. For most people any supposed gains disappeared into inflation, and those with kids are about to get whacked with big increases in childcare costs as well.

So most of us don’t feel any better off, and a couple of recent surveys have picked this up. In November:

A nationwide HorizonPoll survey of 1558 people between November 16 and 19 found 8.2 percent of those surveyed felt better off because of the changes while 53.5 percent thought they were worse off. A substantial group, 35.6 percent, felt their situation was unchanged.

And published yesterday:

The TV3 poll asked voters: Have you noticed your tax cut and what are you doing with it? The result was: 70 percent said they hadn’t noticed any difference, 14 percent said they were spending it, and 12 percent said they were saving it.

The PM is puzzled at our ingratitude:

“I’m a little surprised, actually,” Mr Key said at his post-cabinet press conference today. “The moves we’ve made have had quite an impact on the pay packets of most New Zealanders.”

Can everyone see Key’s problem? He’s operating under a bit of a misconception. The tax swindle hasn’t had “quite an impact on the pay packets of most New Zealanders” at all. It’s had negligible impact. The following graph (stolen from better researchers than I here and here) tells the story:

Folk on the average income or average wage got less than ten dollars a week (twenty a fortnight on the left Y axis). A paltry sum soon eaten up by inflation and increased costs. Its not until $80,000 PA and above that the gains reach even twenty a week. But the real problem for Key is that a vanishingly small proportion of the population have that kind of income (see distribution in the background and right Y axis).

So it’s pretty simple really. Most of us don’t feel better off because most of us aren’t better off. The only surprise is that John Key is so completely out of touch as to fail to understand this.

37 comments on “Key out of touch on taxes ”

  1. Lanthanide 1

    “A nationwide HorizonPoll survey of 1558 people”
    Is this the same self-selecting ‘online panelist’ malarky as the political poll?

    • TightyRighty 1.1

      no, this one is anti-national so it’s 100% correct.

      • bbfloyd 1.1.1

        tr. i took part in that poll. they gave me fullscope to answer as i wanted to. the range of choices went from one end of the spectrum to the other.. the only thing anti national were the people out in reality land who answered how they really felt…..

        try to get over it. i know it’s hard, but in a few years, when you,ve grown up a bit you might just manage it.

    • r0b 1.2

      Probably. But the TV3 poll is harder to dismiss.

      • gobsmacked 1.2.1

        As I pointed out on the other thread, this is the same poll as the party vote poll (TV3, Sunday).

        So if people are claiming the big lead for National as “fact”, they must also accept this as fact. It’s the same people responding. Therefore, National’s tax cuts have failed, according to their own supporters.

        • TightyRighty 1.2.1.1

          Nationals tax cuts failed, but national are still kicking the crap out of labour. if you get ahead of labour by failing, imagine how much further ahead you’ll be by getting it right? what hope does the left have next year?

          • gobsmacked 1.2.1.1.1

            Glad that you agree – the tax cuts failed.

            What does “getting it right” entail?

            • TightyRighty 1.2.1.1.1.1

              weak. your argument sucked and you got pinned for it. do you always ask pathetic questions in response to getting five in the poo?

              • gobsmacked

                @TightyRighty

                Let me help you (although your language suggests it’s a lost cause).

                Many voters choose National over Labour, and John Key over Phil Goff, and also are not satisfied with the tax cuts.

                This is not difficult to comprehend. except possibly for you.

                The public are not switching their vote every five minutes. Many are not engaged with politics at all. But in the election campaign, many will be.

                In 2011, the economy will be a major issue. National have used their trump card. It failed. Perhaps John Key’s personality and photo-ops will prevail. Or perhaps people will be more influenced by their wallet.

                Usually it’s the latter.

                • fizzleplug

                  Isn’t Phil Goff talking about raising taxes again though? With no detail yet either, so we can speculate all we want about what level of income rich pricks earn until he does realise something meaningful.

                  I feel sorry for Goff, he looked so promising under Clark, but elevated to the top he’s lost his way completely.

                • TightyRighty

                  so the question about the trump card, being asked at the same time, suggestes peoples loathing of labour is greater than their desire for money in the pocket

                  • Lanthanide

                    So the political party question was asked in the same poll as the tax cut question?

                    You realise that this poll had National down in the 30’s, the lowest out of any recently released polls. So I wouldn’t exactly be crowing about that if I were you…

        • luva 1.2.1.2

          Gob I don’t think it is anything to be spouting on about. If the tax changes have failed yet Natioanl are still popular, according to the same poll, where does the left go now?

          • fizzleplug 1.2.1.2.1

            Judging from what has been happening within Labour lately – further left?

          • gobsmacked 1.2.1.2.2

            @Luva

            Key is popular. Labour can’t out-Key him, not with Goff or any other leader.

            But they can campaign on substance. On policies. Probably, Key will still win, but on past record, he will win only by promising not to do what the Right wants (see mining, asset sales, nuclear-free etc).

            The more he concedes ground to keep his numbers up, the better. And the angrier the right will get.

            • luva 1.2.1.2.2.1

              completley agree on Labour focussing on Policy rather than Key. Forget about Key altogether. Treat next year like he doesnt exist.

              See my comments in Open mike on this subject

  2. burt 2

    You are better off with Labour where nobody gets a tax cut and fiscal drag is used to make the govt rich while the people get poor. Well that seems to be the alternate universe view of myopic dim-bulbs who don’t understand that as long as we have inflation we need to adjust tax thresholds regularly.

    EDIT: Oops forgot about the tax cut for the racing industry, remember the secret donations that Winston as part of the Labour-led govt didn’t declare – that is how it should be done and probably how Labour want to do it again with the help of their honesty role model Winston.

  3. fizzleplug 3

    I’m sure you’ll say I’m an isolated case and not at all indicative of reality, but I feel (and am) better off after the tax cuts.

    My income is in the $60-65k band
    Not eligible for WFF (or any other “tax credit”)
    I rent, not own, my apartment
    Grocery bill has not significantly increased due to the GST increase.

    I put myself around $20-25 a week better off. Which doesn’t sound like much, but it adds up nicely.

    In fact, this is the first time in around 10 years that a tax cut package has actually provided me anything – the last big tax re-distribution was WFF, which discriminated against middle-income earners without children (of which I am one).

    Edit: tidied up my last sentence

    • TightyRighty 3.1

      ah no it didn’t discriminate against you. It made the country better off by providing needy children with ipods and parents with flash kitchens to cook them lovely meals in. just because you shivered in your flat to pay for the middle class largesse doesn’t make you discriminated against. It makes you a contributing member of society.

      • gobsmacked 3.1.1

        Key has kept WFF. Added to it, in fact.

        You can’t claim the popularity, AND reject the reasons for it.

        • fizzleplug 3.1.1.1

          Yes, well I’d love to see WFF and interest-free student loans thrown out with the Families Commission (and a few other things).

          Dreams are free, like they say.

    • infused 3.2

      Same here. If you are on 65k, you got about $45 or something. So I signed up for Kiwi Saver. Still get left over with $10-15. Happy.

      I think I’m a rich prick. Even on 65k supporting someone who is studying is very hard.

      • Colonial Viper 3.2.1

        You are a rich prick, albeit a poor one. How can that be you ask? The thing is that on $65K p.a. you are almost in the top decile of income earners.

        ~90% of NZ’ers earn less than you.

        That’s how poor the people of this frakin country has become as a few at the top end lord it up.

        • Lanthanide 3.2.1.1

          Isn’t the average household income apparently $78k? I’ve never understood how that works. But anyway, given that, if he’s the sole breadwinner, then technically he’s below average.

          • Colonial Viper 3.2.1.1.1

            Don’t go with ‘average’ anything, go with median.

            Household income takes into account that some households have two (or more) income earners living there.

  4. AB 4

    At least the HorizonPoll researchers give their methodology, sample size, say what factors they have weighted on in order to provide a representative population sample at:
    http://www.horizonpoll.co.nz/page/72/more-than-half-say-they-are-worse-off-after-major-tax-reform

    Seems HorizonPoll is very accurate.

    They say they recruit their online panel by invitation, to match the national population, while others can also opt in if they wish.

    So, like the highly successful UGov in the UK, they can do very accurate research.
    When will TV3 publish the full results of its surveys, and reveal what crtieria they weight on.
    Horizon says it is weighting on six factors, including party vote.

    Time the pollsters fessed up and then we can judge for ourselves who’s being most open and giving the most compelte picture.

    Seems the editors at The National Business Review and Sunday Star Times have decided HorizonPoll is very acurate and continue to publish its work in detail.

    • Lanthanide 4.1

      I believe the Horizon poll was one of the most inaccurate ones at the last election?

      Their recent political one put NZFirst at 6%, and had National far lower than all other recent polls. Sure, their methodology is different (and publicised), but that in itself doesn’t mean it’s any good. Likewise I also wouldn’t tout media picking a story up as meaning that story has merit – more likely in this day and age, it means the story is controversial.

  5. Deadly_NZ 5

    See on the news that the teflon john says because we are all saving the books are screwed….

    Yeah right my bank account reads ohhh shit where’s my glasses all the red is dazzling -00000

    how much further out of touch is he going to become or has he had rose colored contact lenses made?

    • Tanz 5.1

      Key will never understand the lot of the underpaid, the worker, the little guy/gal. How could he, rolling in cash as he does? He may have come from relative poverty, but he sure as heck is never going back to it. Plenty of Kiwis out there will never get free of the mire. Does Key care a toss? Doubt it. Tax cuts for the rich for crying out loud. The rich. This is why I will never understand the Nats, never.

  6. Swampy 6

    I haven’t been swindled. Maybe you have

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