Stealth taxes

Written By: - Date published: 4:34 pm, May 23rd, 2012 - 8 comments
Categories: bill english, tax - Tags:

Bill English has introduced a number of stealth taxes over his time in office, to partly balance the loss his tax cuts for the rich has generated.

The latest in this budget will be prescription costs and raising the price of Early Childhood Education (again).  We’ll have to wait until tomorrow to find out if there are any other fish hooks.

These hidden taxes (or ‘charges’) are paid by the many, to counter his cuts for the few.

Last year it was a tax on your employer’s contributions to Kiwisaver – meaning less goes into your saving pot, and more into the Government’s coffers.

Previously it was a big rise in your ACC charges, and increased ECE costs previously as well.

Additional Student Loan charges can be added to the list.

Of course the biggest of them all wasn’t really stealthy, but was paid disproportionately by the poor: the promise-breaking GST increase.

As ever they ‘broaden’ the tax base – which is just Right-speak for taxing the poor instead of the rich who can afford it.  Like ‘incentives’ usually means punishments – less carrot, more stick.

But I guess stealth tax rises goes well with their policy of stealth cuts to services as well. Bill cuts the budgets, but leaves it to be the civil servants’ fault when they have to cut the jobs – including the frontline that National promised not to touch: police support, teachers, biosecurity, conservation, diplomats, plus lots of backoffice – forcing the front line off the beat and into paperwork to cover those tasks.

8 comments on “Stealth taxes”

  1. Carol 1

    Part of the “broadening” is apparently to close some loopholes to stop tax avoidance by higher income earners:’

    http://www.radionz.co.nz/news/political/106538/broader-tax-base-moves-in-budget

    Finance Minister Bill English says a range of tax-base broadening measures will be revealed in the Budget.

    He says the Budget will target higher income earners to stop them structuring their financial affairs in a way to avoid their tax obligations.

    But he says the new measures will not be anything like a capital gains tax and will continue to focus on improving fairness in the tax system.

    I don’t know how he can can claim any continuation of “improving fairness” when his previous changes were anything but….

    • Draco T Bastard 1.1

      NACT are the Ministry Of Truth.

    • Anthony 1.2

      So Carol, the current tax system is, the more you earn the more tax you pay – how is that unfair?

      Additionally, the bottom 50% of working age population pay net 0% tax, and 70% of families qualify for Working For Families tax rebates.

      From where I am, this looks like a pretty brilliant system if you are a lower income earner. You never have to worry about improving your lot in life, you can just cruise.

      Disclaimer: I live in Papakura, and see first hand every single day how easy life is for a lot people who don’t give a rats ass about contributing.

      • rosy 1.2.1

        How much fairer it would be for everyone if everyone was paid a living wage, don’t you think? Then there’d be no need for things like WFF or other tax credits.

        Disclaimer: I have grown children, and see first hand every single day how difficult it is for a lot people who work long hours to give a rats ass about providing for their families and meeting their tax obligations.

  2. one that seems to have gone under the radar are the changes to working for families. no business losses can be deducted from other income, as they used to be. this will be particularly hard on small businesses that are struggling through the recession. other changes are reasonable, like taking into account the income in trusts, or non-PAYE wages or the income of a non-resident spouse. but the business losses one really sucks.

    • Anthony 2.1

      If your company relies on Working For Families tax loopholes then its a pretty good sign you need to shut up shop and try your lot at something else.

      • Murray Olsen 2.1.1

        What’s actually far worse is people living off buying and selling property where they don’t even have to look for tax loopholes.
        Disclaimer: I used to live in Herne Bay, and saw first hand every single day how easy life is for a lot people who didn’t give a rat’s ass about contributing.

      • stargazer 2.1.2

        many, many small business owners run as a partnership or sole-trader, not a company. there is no loophole. company profits were already being included in WfF calculations before these changes, & losses ignored. there’s a recession on, many successful businesses aren’t so successful any more and people running them would be added to the pool of unemployed. i doubt that’s a better outcome.

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