Having decided to do a post about politics for once, National Party pollster David Farrar attacked The Standard and No Right Turn over our pieces on the distribution of income and how low and middle income people won’t be getting promised compensation for GST increases from National:
“The Standard have made the same mistake also. You see in New Zealand, we have these things called families and households. What No Right Turn sees as a mass of poor people who will be unaffected by tax cuts, are spouses, older children, many students and even parents of those who do earn more than $23,000 a year, or even $48,000 a year.
If a family has one parent earning $60,000 a year, and one on $15,000 part-time, they both benefit from a change to the 33% tax rate. Because they are a family!!”
Hear that ladies? (implicitly, you’re the parent on the low income in this Farrar’s scenario) You don’t need a tax cut to compensate for the increased GST you’re paying with your income because your husband got a tax cut! As long as you have a wealthy husand, you’re no worse off. Whoo!
Key made similar comments on Q+A but it doesn’t stack up. Key promised that no-one would be worse off because of the hike in GST to pay for income tax cuts. That means all taxpayers need to get an offsetting income tax cut, whether they have a sugar daddy or not.
Key and Farrar want us to believe there isn’t a huge lower and middle class of people scraping by who are set to be hammered by a GST increase in a time of rising unemployment and stangnating wages. The poor, they say, aren’t really poor because they’re living with well-off people. Well, I don’t know about you, but my experience tells me that high-income people tend to live together and poor people tend to live together.
Anyway, the best bit is when Farrar concludes:
“So ignore the stupid stats and graphs about individual incomes. They are relevant to academic theory, rather than the real world. Household Family income is what affects most people”
I’ve been waiting for him to say that:
(graph is blocky because the source data is by decile. assumed uniform distribution of households within deciles and gradual trail-off in top decile)
50% of households have total incomes of less than $64,000. There are 365,000 households of two or more people getting by on a total income of less than $52,000. All these people, these one to two million people, will be worse off when National raises GST but doesn’t cut the bottom tax rate.
Whether you look at individual incomes or household incomes, the story is the same. The Right is blind to Middle New Zealand and the incomes we live on. Their only concern is tax cuts for the rich few, and we will be forced to pick up the bill.