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National’s dodgy tax campaign

Written By: - Date published: 8:31 pm, September 20th, 2010 - 55 comments
Categories: class war, spin - Tags:

According to the ODT government MP’s are going to be travelling around the country trying to convince New Zealanders that their plan to cut taxes for the rich isn’t actually a plan to cut taxes for the rich at all.

Presumably they’re going to be travelling on the taxpayer’s dime to do so:

Mr Key said a family on the average income of $76,000 a year would be about $25 a week better off, even after the GST increase was factored in.

“Over the next fortnight, Government MPs will be out and about communicating the effects of the tax changes and you will hear more about that from us as October 1 approaches,” he said.

In fact the median income wage and salary income is just $46,000.

According to the government’s own calculator (which includes GST) that means a household on the median income will get just $10 a week extra. But that’s assuming a single earner household. Split that income into a minimum wage job and a part-time job and the net gain is more like $7 a week.

And when you split the $76 average Key is using into a couple of lower-middle class incomes his $25 gain starts to look more like $15.

Of course if you’re Paul Reynolds on $5m your gain looks more like $3,452 a week.

That’s $179,515.96 a year – four times the full median household income.

So there you go. The government is going to be using your taxes to travel around the county telling you why it’s a good idea for you to borrow a billion dollars so they can give a very small number of very rich people a very large amount of cash. And all while telling you to be thankful for your seven bucks.

This should be entertaining.

55 comments on “National’s dodgy tax campaign”

  1. Interesting 1

    I Agree with you that a person on the average wage of $45k will only be $10 better off. (i do stress better off).

    However you are not comparing apples with apples. Mr Key is correct about a FAMILY (or individual) on $76k getting $25.

    Just as you are right that an INDIVIDUAL (or Household) on $45k is only $10.

    So you are BOTH right in the calculations and situations that you use. they cannot be comapred to each other as one right and one wrong.

    They are two different scenarios.

    Still, even by your calculations, “Split that income into a minimum wage job and a part-time job and the net gain is more like $7 a week” which means it is still a GAIN.

    This does not help the “those on low incomes will be worse off” that Labour calims.

    I agree, it is sad that those on more, like Mr Reynolds get a grossly over the top amount of money in tax cuts than what people like me ( i am on a student allowance so get $0 gain i think).

    However the Nats claim that “most will be better off and no one will be worse off (me getting a net difference of $0, thus not been worse off)” appears to be roughly true.

    • Bunji 1.1

      Well that $7 gain is before any extra childcare costs, or any extra rent from your landlord passing his/her extra tax on, or the extra mortgage payments as interest rates rise from the inflationary budget… or for that matter the increased prices everywhere from the inflation of 6% that the budget is going to cause… so it won’t really be $7 better off at all…

    • Draco T Bastard 1.2

      People may be slightly better off after the tax cuts – if you don’t take into account everything else that the government has done to shift the tax burden on to the lower paid. Increased ACC, car/truck rego, and others that I can’t recall ATM.

    • bbfloyd 1.3

      WOW…… that’s interesting… interesting… even though i know that any cut i get is going to be swallowed up before christmas, i still agree it makes sound economic sense to borrow hundreds of million dollars every year so that more deserving people can have even more than they already have.

      what does it matter that most of that money won’t filter back through the economy.. they deserve it..

      so a few more, totally irrelevant, and obviously afflicted people end their lives than before.. so what if lazy, shiftless bludgers sleep by the hundred in our city parks.

      so what if families are driven apart as aside effect of extreme hardship. harden up …
      these people deserve our support, and if it costs only half a billion, then that’s a small price to pay.. well said interesting….. tally ho…

      • Tigger 1.3.1

        Ultimately people will decide if they ate worse or better off or they feel nothing has changed but they think others have suffered or benefitted. Then they’ll vote. PRing this is a waste of money and as the post notes that’s what the govt is doing.

  2. Lazy Susan 2

    Looks like Blinglish and ShonKey are panicking.

    The voters will be suspicious that National feels it needs to “sell” these tax cuts so it’s a gift for
    opposition parties.

    Forget about trying to focus on the difference between median and average income though as many people just don’t get that concept, valid though it is.

    Better to come up with some real world examples.real people with different circumstances e.g contrast the “tax cut” for a family where both adults are working low paid jobs with that for a family where one adult is in a well paid job.

    Got to have an alternative tax plan though – “we might drop gst on fruit and veges” doesn’t really cut it.

    • Loota 2.1

      Looks like Blinglish and ShonKey are panicking.

      The voters will be suspicious that National feels it needs to “sell” these tax cuts so it’s a gift for
      opposition parties.

      Yeah, this, also the 90 day right to fire, the aborted mining in National Parks plan, the $1.7B dollar speculator bail out, backing Rodney’s outstanding ethical judgement, undemocratic destruction of ECAN, Supercity dictatorships, and much more, is going to make 2011 a field day for the Opposition team.

      • come get some 2.1.1

        too bad the opposition sit on their stupid worthless asses and do shit fuck all

        captcha: hid, i love this

        • pollywog 2.1.1.1

          Now that the Goffinator’s chief ineffectual spin doctor has landed himself a sweet number as candidate for a safe seat, his replacement might show a bit of mongrel and up the level of rage and intensity Phil should be delivering in his soundbites.

          Hopefully Goff will ditch the silly walk now too.

          BTW who doesn’t think retailers will tag an extra lil’ price hike on top of the GST rise to cover admin costs of realigning pricing and accounting systems ?

          Just remember retailers, Key has warned you not to…otherwise he’ll also sit back on his 50 million dollar ass and do sweet F A.

          and yes… I Still reckon opposition parties should donate their taxcuts to charity or lose the moral highground from which to criticise from.

          • Lazy Susan 2.1.1.1.1

            BTW who doesn’t think retailers will tag an extra lil’ price hike on top of the GST rise to cover admin costs of realigning pricing and accounting systems ?

            Granny used the GST rise to try and slip through a change in my subscription arrangement. Had been getting one month free for an annual subscription i.e. pay for only 11 months on a 12 month subscription. Tried to quietly drop that when advising me of an increase due to GST rise.

            Have dropped subscription and will go online – at least when I read Fran O’Sullivan and John Roughan I now have the satisfaction of knowing I’m not paying their wages!

            • Draco T Bastard 2.1.1.1.1.1

              Well, technically, you still are as they’ll still get their revenue from advertising on their site.

    • Vicky32 2.2

      Was just watching TV3 a while back, with Fatty Garner indignating that Labour are WRONG, WRONG AND MORE WRONG, poor misunderstood NACT…
      TV3 disgust me!
      Deb

  3. MikeG 3

    and the “GST” increases have started already – when my wife questioned the price increase on an item recently she was told that it was because GST was going up!

  4. Red Rosa 4

    Its not just the National heavyweights who will be asked to explain this to the voters.

    Imagine being a middle of the road National MP with a slim majority. Someone asks you at a public meeting – “How much does YOUR family get out of this?”

    Your face goes red/white with panic. And you say – “Well, my $130k salary plus my wife’s say $70k thats $200k total, less extra GST..mmm..we’ll get tax cuts of about $4500 per year, between us…”

    Can’t you just hear the hush fall over the crowd? And the next question…..

  5. Carol 5

    What’s the point of going round telling everyone what they’ll get? Surely people will know whether they are better off or not, by how far their money goes?

    • Richard 5.1

      The point is to try to convince voters that they are better off despite the evidence of their pocket book.

      They are trying to fool the electorate, not inform it.

  6. re the ODT article – Key is a moron – since when is the average NZ family on $76K. The man needs to be ripped to shreds over that one.

    • Lanthanide 6.1

      And, taking the supposed “average family” on $76k, even fewer of them would be getting that $76k from a single wage earner, so the figure he is indicating is even more misleading.

    • Interesting 6.2

      Appleboy A visit to the Statistics NZ website will show you the following:

      Household income

      Average (mean) weekly household income from all sources was $1,459 in the June 2009
      quarter….

      SO if we times that by 52 weeks that equals…….$75868 (almost $76k)

      so Stats NZ would tend to agree with mr key.

      SO who needs ripping to shreads appleboy?

      • Zorr 6.2.1

        Lrn2statistics Interesting.

        Mean is not the same as median which is the term that people have been using. Mean is the middle ground if you total up all the incomes and divide by the number of earners. The median is what 50% of the population are on or below.

        • NickS 6.2.1.1

          This.

          Very high, or very low values will skew a mean, leading to divergence from the median value/bracket. Meaning that the mean becomes a somewhat useless sole indicator of the population* one is interested in. Especially if no-ones decided to give other population characteristics such as variance and quartiles…

          In this case, the distribution shape for NZ wages would probably be a bell curve with a very long tail out towards the very high incomes. Which depending on the values of the high wages involved would result in a mean that doesn’t correspond with the “hump” of the bell curve. Were the “average” NZ’er actually is.
          _________________
          *blame bio-stats…

      • bbfloyd 6.2.2

        getting better interesting… you almost fooled one person, i think. how much are they paying you to say this stuff? i’ll do it for $50 less.

        • Interesting 6.2.2.1

          Same old attack aye bbfloyd. I get paid by nobody.

          Why is it that when someone wants to talk about the facts, the automatic response of many is to claim that those wanting facts are “Paid” by someone.

          I am a student, getting the student allowance. i get no benefit out of the Nats tax cuts.

          But hey, if you want to spend your time accusing people (me) of being paid hacks for other parties just because the facts are inconvenient to you then fine.

          I am happy to debate the facts, and if i misrepresented the difference between “median” and “average” and that offends you then my apologies.

          If it is such a crime to defend anyone that isn’t left leaning in the interests of accuracy then fine, i will find another site where bloggers of all leanings can handle it.

  7. mcflock 7

    of course, as income inequality gets worse under these jerks then the median will move farther and farther below the “average” income, making the average less meaningful when talking about how we’re all supposed to be getting tax cuts.

  8. Irascible 8

    Whatever the increase it won’t buy me a block of cheese. A point used by Crosby-Key-Textor after the Cullen tax cuts.
    Shonkey tax cuts won’t help the NZ economy provide for the citizens.

    • Draco T Bastard 8.1

      That’s not what they’re supposed to do – they’re supposed to boost incomes for the rich.

      • mcflock 8.1.1

        … who might then provide a nice warm trickle onto the faces of the deserving poor, and expect thanks for it.

  9. jcuknz 9

    But guys and gals you have got to understand that the rich are hurting … what with school fees at private schools, the cost of new cars, hell man it is tough going with the mortgage of the ranch …
    http://www.nytimes.com/2010/09/20/opinion/20krugman.html?th&emc=th

  10. jcuknz 10

    Sorry but what on earth are you all wailing about? The government has done its best, a good try in my opinion to cushion us from the inevitable increases caused by the dam fool policies of the last government with their pre-occupation with being the first in the world to shackle us with climate change taxes.
    It is nice to get a bit more but it is also ridiculous to expect tax cuts in the current ecconomic conditions.

    • IrishBill 10.1

      It is nice to get a bit more but it is also ridiculous to expect tax cuts in the current ecconomic conditions.

      So you’re saying the government should cancel the tax cuts for the rich? Good. I couldn’t agree more.

    • Chris 10.2

      What are you talking about? National had ample opportunity to ditch this carbon credit bullshit, but they supported it at every step. Get your damn facts straight.

    • bbfloyd 10.3

      jcuknz…. are you trying to undercut me for comedy’s job?

  11. jcuknz 11

    Probably the reason for the tour is the gross mis-information put out by the left about the tax changes as of October 1st …. really you can say you brought this waste of taxpapers funds on by your own actions.

  12. I helped pack down a trade show over the weekend and there were some not very happy show campers leaving afterwards. They looked like they’d just pissed a shitload of money up the wall for little or no return.

    I figure the penny’s dropped and all that middle class shit, middle class people make to sell to other middle class people to make them feel like they’re upper class is not moving like it used to.

    Hot tubs, garden furniture, quirky art pieces and flash home items, that sort of shit.

    Goes to show, no matter how far up the social ladder you think you are, in a depression, you’re really only one step away from the poor house.

    But seriously, no piddling taxcut is gonna make the upper classes trickle down their excess wealth to stimulate the retail sector…Blinglish is dreaming if he thinks he can sell us that shit !!!

    Funnily enough, i was helping a mate move flat in Welli last year and had to park in Gareth Morgan’s driveway. He was cool once i explained we wouldn’t be there for long so i asked him about the economy.

    He said things were gonna get a hell of a lot worse and i said ‘yeah at least for us at the bottom we got nothing to lose so less likely to suffer’

    He looked at me kinda weird but it stands to reason if you got nothing to lose you got everything to gain…doesn’t it ?

    Hmmmm…I bet there’s a brisk trade in home security going on at the mo.

    • Bored 12.1

      I figure the penny’s dropped and all that middle class shit, middle class people make to sell to other middle class people to make them feel like they’re upper class is not moving like it used to.
      Jeez I get sick of the grasping wannabee classes and their obsession with defining themselves by way of their possessions. I had some w**nker point out ot me the age of my fishing gear last year, I pointed ot the fish……

    • bbfloyd 12.2

      shame it seems to take our richer, and therefore superior brethren so long to figure anything out.

    • mcflock 12.3

      I figure the penny’s dropped and all that middle class shit, middle class people make to sell to other middle class people to make them feel like they’re upper class is not moving like it used to.

      most of the stores that have gone under on the main street seem to have been those “design/gift” type stores, overpriced crap that has no function and is made by third world labourers.

      And a couple of lingerie stores, which sadly suggests life is getting marginally less interesting…

  13. Keys argument that most people will be better off

    let’s see …let’s keep this simple

    If we gave 9 kids in the playground lunch break 20 cents and gave 1 kid $5.00 would we say
    ‘well most of the kids are better off’. And after that we also said hey you 9 kids..your lunch fees are going up 25 cents.

    I think even the kids would see through that one…and so will kiwis when it comes clearer that most have got nothing/worse off and a certain number have got a whole lot. paid for by…guess who.

    • Interesting 13.1

      do you have numbers (real facts not just made up ones) to back up that, by your “story” above, that 9 out of 10 people will be no better off?

      • Vicky32 13.1.1

        Take the man on the telly news the other night… His tax cut will be in the region of $14.00 a week, but the GST increase will mean that his real tax cut will go down to around $4.00. Then take people like me (on a benefit) who of course will not get a tax cut even though all benefits are taxed) – and yet who will have prices rising with GST. Some of the rightists (you among them, I believe) are or say they are, in receipt of a student allowance. No tax cut, just rising prices. (If you live with comfortably off parents of course, which is very likely – you won’t care at all about price rises, but students who are self supporting (as I was last year, my parents being long dead… when in receipt of a student allowance) will be amongst those worse off – considerably worse off given that student allowances and unemployment benefits are below $200.00 a week!
        Deb

        • Interesting 13.1.1.1

          Vicky32 you say:

          Some of the rightists (you among them, I believe) are or say they are, in receipt of a student allowance. No tax cut, just rising prices. (If you live with comfortably off parents of course, which is very likely – you won’t care at all about price rises, but students who are self supporting

          I say:

          NO i am not a “rightist”

          YES i am a student on a student allowance.

          NO i do NOT have well off parents – they struggled to make ends meet and still do. They do not give me any money etc as they cant afford it with their mortgage and other living expenses.

          NO i do NOT live with my parents

          My student allowance is above $200 a week as i am over 25.

          I have had to work HARD for all i have. I struggle to pay my bills (some strenching out over a few months sometimes)

          I DO care about those who are struggling.

          Your assumptions, based on my comments about wanting facts not lovely “stories” that have NO basis of evidence (eg 9 out of 10 will be worse off).

          People often use treasury figures as a way to attack this current government over things, so i feel i can rely on treasury figures to back up that most will be better off (figures mentioned yesterday)

          BUT since you will assume i am some right wing nut job because the truth is inconvenient to you so you attack me rather than the facts i will take it that you wont give a stuff about anything i have just said.

          YES things will be tough for some. But not 9 out of 10 as Appleboys post implies.

          • Vicky32 13.1.1.1.1

            “My student allowance is above $200 a week as i am over 25.”
            How the freak did you manage that? I am over 25, and have accomodation costs, dead parents, etc… Yet my student allowance last year was about $185.00 weekly… (pegged to the level of my UB apparently, or so StudyLink explained to me.)
            My son got $180.00 for his student allowance in 2007-8, and would have been toast, if he hadn’t been able to live with me – and I was working, as the company I worked for hadn’t crashed then.
            “BUT since you will assume i am some right wing nut job”
            Sadly, yes, I do assume that.
            “because the truth is inconvenient to you ”
            I think the truth is rather more inconvenient to you than it is to me. You seem to be living in some happy-clappy world where JonKey can say “everyone will be better off” and that somehow magically makes it so.
            People whinged hard-out about Cullen’s tax cuts “Not enough to buy a block of cheese” (true only if you like gold-plated cheese :D) but I assure you if I got $28 000 like the guy on TV, and ended up with about $4.50 a week better off, I shouldn’t even notice it. That’s what, a 2 litre bottle of the cheapest milk, and 80c towards a 1 stage bus fare.
            Deb

            • Interesting 13.1.1.1.1.1

              pass, as to how i get over 200 (this includes the accomodation thing)

              If you are to assume (Wrongly) that i am a right wing nut job, does that mean i can assume you are a deluded left lunatic? (Not that i think that myself, but i am just following your reasoning that because i support SOME of Jkey things, then you must be a Deluded Left Lunatic, because you support left leaning arguements and that is what some rightwingers call left wingers)

              I want to rise above labelling people in certain catergories as a means to attack a positon rather than dealing with the ISSUE.

              There are good things on both left AND right of politics.

              I voted NAT last year (for various reasons). But right now my vote is on the fence. Hence why i read this sight and other sights of both political sides.

              If i am to be labelled anything (which i dont want to be) i would say i am a CENTRE man. so call me a fence sitter if you like. In fact if it makes you feel better i can change my posting name to fence sitter?

              Both sides have some good and some bad policies. to write of a side because they are RIght or left and not even considering any of their ideas is stupid.

              Why do i say this?

              Because i agree with:

              * Labour’s Industrial Relations policy (When i was working i used to be in a union, i was a delegate, i actively recruited people, i was on the unions coouncil for my company, in fact i was on the national committee)

              * Labour’s (Potential) get rid of GST off fresh fruit and veges Policy

              * National’s “Benefit as a temp not permanant solution” Policy

              * Maori Party’s Whanau Ora Policy

              * Nationals policy of dropping taxes (although it should be better spread)

              * Progressive Party “Free children dental visits” policy

              * Greens Idea of looking after the environment

              * Nats Policy of limited government

              BUT there are other policies from each of the parties that i disagree with. Hence why i am sitting on the fence at the moment.

              However, the response that i get from people of a left persuasion that all people who support right leaning parties are all “Nut Jobs” does not encourage me to want to swing that way.

              Yes i know that the right people call lefties “Looney” hence why i am a fence sitter.

              I know that this frustrates many. But i believe that my vote, although it is only on, should not just go to a party for the sake of it.

              So i will conitnue to read this site and others of right and left and see where my vote goes at the election.

              However, if personal attacks are the norm on this site, then i will stop looking. Not because i cant hack it, but because it is childish and i cant be bothered with people who attack the messenger rather than the message with their personal insults. we are all grown ups i thought?

              Happy to debate the ISSUES/FACTS/STATEMENTS with anyone. but if it is a name calling, childish personal attacks, then forget it.

              By the way, i have NEVER implied or said that Jkey said ALL would be better off. I said that he said MOST would be better off.

              • Vicky32

                “I voted NAT last year (for various reasons). But right now my vote is on the fence. Hence why i read this sight (site, is what it should be – if you’re a student, you shouldn’t need a beneficiary to fix your spelling/grammar) and other sights (sites) of both political sides.”
                “* National’s “Benefit as a temp not permanant solution” Policy”
                All very well if the jobs exist – currently they don’t. Try being on a benefit before you pontificate!

              • Draco T Bastard

                National’s “Benefit as a temp not permanant solution” Policy

                And who ever said that the welfare benefits were ever supposed to be permanent?

                Nationals policy of dropping taxes (although it should be better spread)

                Is delusional as it cuts the social wage – the very reason for belonging to a society. And it’s not better spread because the Nacts wanted to give more of everyone else’s money to the rich. We know this because the rich are the only ones benefiting from their policies.

                Progressive Party “Free children dental visits” policy

                All health visits should be “free” as it cuts down on the long term costs of ill health.

                Nats Policy of limited government

                Th Nacts don’t want limited government – what they want is dictatorship. Proof – The canning of ECAN and the Gerry Brownlie Enabling Act.

                By the way, i have NEVER implied or said that Jkey said ALL would be better off. I said that he said MOST would be better off.

                He may have said that but it’s just not true. After all the Nacts other policies most people will be very much worse off.

  14. ianmac 14

    The trouble is that benefit is not clear-cut from the housekeeping point of view. As the main buyer, I cannot say that now my money goes further or not further. Petrol prices fluctuate. Fruit and Vegies fluctuate and so does Meat. So unless I kept all my dockets of everything I buy over a year or so and then compared apples with apples I simply cannot tell.

    However nor can “they” show convincingly that I am better off. Therefore the Government is vunerable to “impressions,” hence their perceived need for a Road Show.

  15. interesting….the point is very clear – most get nothing and the few get plenty.

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