I find it frustrating that the debate over tax concerntrates on the top rate rate, which doesn’t apply to 90% of taxpayers. It’s as if the Right, and many in the media, are either blind to the existance of people on normal incomes or severely underestimate their number.
John Key, of course, is the worst. He has repeatedly been asked for assurances that people on low-incomes will not be worse off because of the GST increase. He off-handedly gives that assurance (despite not having the money to pay for all his promises) but when he gives examples of how the changes will impact a low income person he chooses someone on $40,000 or $45,000. $40,000 is in the top 30% of incomes in this country. It’s as if the rest of us are invisible to him. I’m willing to bet he simply has no understanding that 70% of Kiwis have incomes under $40,000.
I guess everyone thinks of themselves as typical, an ordinary battler, and it’s only reinforced by the fact that the wealthy spend most of their time in the company of other wealthy people. There have been commenters on this website who have reacted with outraged disbelief when told that having $650,000 of net assets is rich. Yet that’s the average for the top 10%. The bottom 50% average only a couple of thousand dollars of net assets. It’s the same with our media commentators. Most of them are on high salaries and would benefit from a cut to the top tax rate, so they naturally concerntrate on that with only fleeting reference to the vast majority of people who stand to lose out.
Check out Peter Williams and Pippa Wetzell responding to viewer feedback on the tax package (and their interviews with Bernard Hickey and Phil Goff). The pair are positively bouyant about the tax cuts because it stands to make them lots of money but most of the viewer comments are strongly anti them because they realise they’ll be breaking even at best. It’s fascinating to watch Williams and Wetzell brush off the concerns of middle and low income New Zealanders.
Perhaps the best examples though were the two major dailies. Both the Herald and Dompost proclaimed: ‘$4 billion in tax cuts’, as if there were no tax increases to pay for them. In reality, what we are facing is a $4 billion wealth transfer – most of it going to wealthy taxpayers, like newspaper editors, and coming from the rest of us.
To be fair, a number of journalists have focused on the impact on Kiwis on low and middle income Kiwis like Duncan Garner who told Sunrise “Look let’s be honest, this will end up being tax cuts for the rich. And the gap will widen, unless he can come up with a miracle. I’m not so sure that he can pull enough revenue out of GST to fully fund that compensation.”
Our national debate should be about the interests of typical Kiwis, not the privileged elite. Problem is that the national debate is largely conducted by that elite.