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The Standard line: Tax cuts

Written By: - Date published: 12:21 pm, October 30th, 2008 - 23 comments
Categories: election 2008, labour, national, tax, The Standard line - Tags:

[update: download this (tax-and-kiwisaver-calculator) simple excel table that will calculate tax cut and Kiwisaver losses under Labour and National, and the difference, for you and your family. No other calculator has included Kiwisaver losses]

So, you’re talking with someone about politics and they say something really dumb and wrong and you know it’s wrong but you don’t have the arguments and facts at your fingertips to make a decisive point. That’s where our election series, The Standard line, comes in. The info you need in bite-size form. Today: tax cuts

Points:
– tax cuts are not the only thing you should judge a party on. Tax is used to provide public services – there is a trade-off between tax cuts and better public services
– don’t just consider your personal situation. Just because one party offers you a bigger tax cut is it worthwhile if others you care about lose out?
– If you, like 1 million people, earn less than $14,000 the tax cuts from both parties are the same
– If you, like around 500,000 people, earn $14,000 to $24,000 you get more from Labour’s tax cuts
– If you, like around 500,000 people, get Working for Families, Super, or a benefit and your income is less than $44,000 your tax cut is larger under Labour because you wouldn’t get National’s ‘independent earner’ rebate
– if you, like 850,000 people, are in Kiwisaver you will be better off with Labour because National would cut Kiwisaver to pay for its tax cuts.
– Most of the money in Labour’s cuts will go to low and middle incomes, most of the money in National’s cuts would go to the wealthy. Just 10% of people get 40% of the money in National’s cuts.
– A family with children, each parent earning $35,000 and in Kiwisaver would be $52 a week worse off under National compared to Labour’s cuts. John Key would be $87 a week better off.
– National’s next round of tax cuts would come in 2009, a year before Labour’s next round, but there is nothing in that second round for anyone earning less than $48,000 and most of the money would go to people earning more than $70,000.
– Labour’s tax cuts are already passed into law. Labour has said they will not be cancelling their next rounds of cuts

23 comments on “The Standard line: Tax cuts”

  1. Chris G 1

    Great stuff.

    I love it how Johnny Friendly used the mean wage of 47k to talk about the ‘average earner’ as opposed to the median of 40k. Granted mean is a method of calculating an average.., but everyone knows a mean gets skewed by extreme numbers and outliers.

  2. Rakaia George 2

    There is a trade-off between tax cuts and spending on public services. This government has proven that there is bugger all correlation between spending on public services and better public services.

    Just because something is legislated for doesn’t mean it will happen and Labour have promised a “mini budget” in December. I would 100% expect some weasel-out on the tax cuts even it’s the plausible deniability of introducing a new tax or increasing GST. Trust? Ha.

  3. NeillR 3

    I agree that taxes should be used to fund public services, but not jaunts to Melbourne to dig up dirt.

  4. Anita 4

    Have you worked out what proportions of people would be better/worse off?

    I can’t find the Kiwisaver figures I need to do it but they must be around somewhere…

  5. Is that the best you can do NeillR?

  6. NeillR 6

    Best? Due to Labour not only having shot itself in the foot, but blowing both of them off at the same time – it’s all i need to do.

  7. NeillR. who says taxpayer funds were used? Williams is employed by the Labour Party,not the government and I understand he is self-funding, doesn’t even draw a salary – he made a ot of money in advertising or something.

  8. Nick 8

    Punters should be saying:

    “tax cuts are the promises of a visionless and intellectually bankrupt people….unless Labour offers them”.

  9. vidiot 9

    who says taxpayer funds were used?

    Didn’t a couple of the articles actually say that members of the Labour Research Unit also went to Melbourne ? [link http://www.stuff.co.nz/4744149a6009.html ] If so that is your hard earned tax dollars being pissed up against the wall SP, they are state funded. And as for Mike himself, self funded my bottom, he’s on the board of directors of 4 or so SOE’s, talk about a very cosy arrangement. Pity Georgina doesn’t get the same perks.

    [no, the article does not sa they went to Melbourne, that’s Key’s claim and he’s well-known for adding to the facts to make a good story. SP]

  10. Ianmac 10

    Neillr: It has been reported in the Press that Williams went to Aussie at his own expense. Funny how pure speculation like yours can be reported as though it is fact yet speculation on Key integrity is to be despised. Figure that.
    Nicky Hager has an interesting post over on Pundit re the hidden agenda:
    http://www.pundit.co.nz/content/theres-actually-only-one-john-key-just-not-the-one-on-show#comment-251

  11. randal 11

    the best deal is still with Labour
    next bids please

  12. Scribe 12

    [no, the article does not sa they went to Melbourne, that’s Key’s claim and he’s well-known for adding to the facts to make a good story. SP]

    Where did that kettle get to?

  13. vidiot 13

    Where did that kettle get to?

    Out the back, smoking pot with Nandoor & Norm ?

    And my apologies, they didn’t get a Melbourne trip, he was supported by members of the 04 team.

    Labour president Mike Williams spent several days last week reading court documents in Melbourne, backed up by Wellington-based members of the party research unit.

    Still a waste of tax dollars tho.

    http://media.apn.co.nz/webcontent/image/jpg/sign10.jpg

    And man those signatures look so same same – not

  14. Matthew Pilott 14

    Vidiot – the top one and the one bottom right. Not the one on the bottom left as you’re clearly thinking.

  15. Monty 15

    Great – under National my family will be better off by $125 per week under a National Government. Of course not the only reason to vote for the National / Act team – but a very compelling one. On the minus side what is Cullen’s secret agenda in his December mini Budget – the one he will never get to deliver.

    the reality is that I want to give my vote to a party that endorses self responsibility, and is pro-business – I will never support a government whose 2008 election policy is to smear and seems to be lacking any substantive policy that will pull NZ out of the current economic crisis

  16. Sarah 16

    That doesn’t really seem a balanced piece on tax cuts at all.

  17. That doesn’t really seem a balanced piece on tax cuts at all.

    That’s because you’re tilting your head to the right – try taking that big old chip off your shoulder and you might find things straighten up a bit…

  18. theodoresteel 18

    The excel spreadsheet… can you choose what rate you put into kiwisaver at? Because that could be important

  19. Camryn 19

    Of course, for those of us who think that tax cuts stimulate the economy and lead to an increased actual tax take (in $ not %) then there’s no way to convince us of the trade-off line. Bugger.

  20. Paul 20

    hmm even earning $250K if I pay into Kiwisaver I’m better off under Labour – what were national thinking?

  21. r0b 21

    Monty: Great – under National my family will be better off by $125 per week under a National Government. Of course not the only reason to vote for the National / Act team

    That’s odd, because previously you have said that paying less tax was the only thing that mattered to you, and (several times) “screw the poor”.

    Camryn: Of course, for those of us who think that tax cuts stimulate the economy and lead to an increased actual tax take (in $ not %)

    Those holding such a belief do so as an article of faith, and in the face of the evidence to the contrary.

  22. Sarah. I’m not sure what world you’re living in but I’m not trying to provide a balanced peice on taxes, I’m trying to provide leftwing arguing points on tax

  23. theodoresteel 23

    No but you could have at least provided an honest excel sheet purporting to allow people more options around kiwisaver.

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