Part of the National/ACT government’s agreement is that a top tax rate of 30% will be the target for the ‘medium term’. Such a cut would cost about $2 billion a year.
Now, I have nothing in principle against reducing tax (and nothing in principle against increasing it, for that matter). It’s a question of trade-offs, which is greater benefit: the services the tax could pay for or the tax cuts, and who gets those benefits? $2 billion a year, that’s a lot of hip operations, so it’s worth asking who would benefit from replacing Labour’s legislated tax cuts with National’s current programme and a 30% top rate added to it (ie. 30% top rate kicks in at $50,000).
Hmm, maybe it will look less like pillaging ordinary Kiwis’ social wage to give the rich a bonanza if we do it in graphical form.
Now, I can already hear our righties with better ideology than maths saying ‘yeah but when you cut taxes you have to give more to the rich’. That’s not true, of course, the current tax cuts cap out at $55 a week for anyone earning $80K or more. Anyway, the Right’s tax cuts don’t just give more to the rich, they give more to the rich as a percentage of their incomes.
$2 billion a year either coming out of public services or paid for by more debt to pay for massive tax cuts to the already very well-off. It would be ordinary Kiwis who would ultimately pay for this extravagant gift to the rich. Doesn’t seem to me that Mr Moderate has the mandate for that.