Tax Cuts for the rich
Tax cuts - what you'll get
THE GOVERNMENT is putting the finishing touches to its package of tax cuts and is now confident that low and middle income earners will have more money in their pockets – even after paying a higher GST. The Sunday Star-Times understands the government has settled on lowering the tax rate for those earning between $14,000 to $48,000 – which represents the bulk of wage earners – from 21% to 19%. The May budget is also expected to lower the tax rate for those earning up to $14,000 from 12.5% to 10%. The Star-Times also understands the government will, in one hit, lower the top rate for those earning more than $70,000 from 38% to 33%, rather than doing it gradually.
So if you earn under $20 000 a year in NZ, you get nothing. So for the poor these tax cuts are 'neutral' but for the rich they are payday. So the most vulnerable in NZ will get zero from these tax cuts once the GST increase in taken into account while the wealthy skip laughing off to the bank and our Merchant Banker Prime Minister walks away with an extra $500 per week. It is an extraordinary theft and transfer of wealth to the rich funded by the poor through an increase in GST, dropping the top tax rate from 38% to 33% with the miserly $5 increase to those in the middle used as a justification.
When John Key promised 'change' he was talking about loose change. Unbelievable.
posted by Bomber @ 6:36 am
17 comments
17 Comments:
If you earn under $20K you get a tax cut. Whats the problem?
yeah sure they get a tax cut...but at what price???
Only the worst kind of sucker would believe that the tax cut is going to go anywhere near the weekly GST bill!
Would be the same kind of sucker who believes that you get a better deal by swaping power companies...just to find they all charge the same...is this what Gerry means when he says competition means better pricing!!!!! LOL
The problem scott is that tax cut is cancelled out by the rise in gst so they get NOTHING out of this. The lowest paid, the most vulnerable get NOTHING while those on the top get the lions share, just like they did with the last tax cuts. If you have no problems with a Political Party that represents the wealthiest passing tax cuts funded by a hike in GST paid by all headed by a Merchant Banker while the least powerful members of society get nothing that's fine, however for some of us who have social justice and equality on our minds, we may find it an abomination.
Kerry you moron
If you cut tax over 100% of a persons income, and increase GST on some of a persons income (debt servicing, rent, savings etc are GST free) that person is better off.
Well it is encouraging to see people talking about this issue.The thing that is really sad about Keys proposal is that it is intended to help us catch up with Australia.The only problem is that it is exactly the opposite approach to what they do in Australia.In Australia they tax the lower incomes less and the bigger incomes more knowing that the money will all end up with the rich anyway but at least it has been firstly filtered thru the poor who are the main consumers not savers.Wake up New Zealand.
Lets do the Maths on your 14K person
Thats roughly $270.00 a week. Would have to be a person working part time - lets say 20 hrs a week. Maybe they are a student or whatever.
They pay currently $38.40 a week in PAYE, leaving a NETT $231.60.
Lets Say $80 board/rent, $80 for food, $50 phone, water, electricity etc, and the remaining $21.60 for Misc.
So they pay GST on $151.60. This is $16.84. If GST was to go to 15%, this expenditure would go up to $154.97. Thus an increase in GST would cost this person $3.36.
However if income tax was cut as proposed, his PAYE would drop to $31.59. Thus he would be $6.81 better off a week, more than covering his GST increase.
PS - dismissing this as fuzzy math is below you...
Let's ignore the fact of your fuzzy math that this is a tax cut funded by the masses so that the rich can benefit, let's ignore that so Scott can feel validated, let's see what the NZ institute of economic research has to say (perhaps you can contact them Scott and explain to them that they are wrong?)
Page 2 of the Sunday star times yesterday...
TAX CUTS:
Income under $19 600
Tax cut $8
GST increase -$7
in the pocket $0
Source: NZ institute of economic research. Tax cuts based on cuts from 12.5% to 10% with no threshold changes
I've contacted NZIER and asked why $8 from $7 = 0 and they gave me the following answer
Hi Bomber,
The table did not show the decimal places and the difference is due to rounding.
We estimate:
Income tax effect: +$7.8
GST effect: -$7.4
Net +$0.4
Rounded to whole numbers it is $8, $7, and $0.
So to allow the rich to pocket $61 a week extra, those who are the most poor walk out with 40cents ie - NOTHING. Now your math which you keep clinging to is suggesting much more than NZIER, I suggest you contact them and explain to them how wrong they are Scott. Perhaps you have though of something they have not?
I might actually contact them because I cant get there numbers to work.
To lose $7.40 a week in GST, Nett expenditure on items that have a GST rating must be $296.00 (plus GST). with a 12.5% gst rate, this would be $333.00, and if GST was 15% this would be $340.40 (a $7.40 increase).
Based on a person earning $19,600 that equates to about $377 a week gross. PAYE on this is 62.92, giving a Nett figure of $314.31.
Therefore this person must be spending more than they earn. I intend to contact them. Bomber, can you see fault in the maths?
You are forgetting that the 'rich' pay >70% of the total tax take you moron.
I might actually contact them because I cant get there numbers to work.
To lose $7.40 a week in GST, Nett expenditure on items that have a GST rating must be $296.00 (plus GST). with a 12.5% gst rate, this would be $333.00, and if GST was 15% this would be $340.40 (a $7.40 increase).
Based on a person earning $19,600 that equates to about $377 a week gross. PAYE on this is 62.92, giving a Nett figure of $314.31.
Therefore this person must be spending more than they earn. I intend to contact them. Bomber, can you see fault in the maths?
Scott, Fuzzy Math relates to your attempt to sell whatever crumbs are swept our way as justification for such a vast transfer of wealth to those on the top who already have the most.
I do look forward to their response as your numbers do ask some questions of theirs. That said, my point is the one above.
You are forgetting that the 'rich' pay >70% of the total tax take you moron.
And so they should, they make the most, it's called the redistribution of wealth. We have that built into our system because capitalism has a unique dynamic of change built into it, that Communism never had and after the Great Depression when large swathes of the world went through a crises of capitalism and the legitimacy of the system was challenged by Communism and Fascism, Democracy's around the world quickly learnt what the price of such dangerously unregulated Capitalism was, 20% Unemployment and a Second World War.
Keynes argued that managed capitalism was a necessary response to fund a Welfare State that would be designed to resist internal strife and create a model of Capitalism that was development focused. The World Bank was originally called the International Bank for Reconstruction and Development This managed and regulated capitalism gained corporate opposition and a new school of thought occurred under The Neo-liberal wet dreamer Milton Friedman. He argued that the free market was some sort of magical force of nature and that Government only blocked it and warped it and destroyed the divine purity of the supply and demand free market. His arousal for this peculiar type of wide eyed fanatical freedom suited the corporations just fine.
Deregulation and market liberalization under Thatcher and Regan have bloated to the global financial ponzi scam they've purposely driven us into all the while making obscene multi billion dollar bonuses from a global set of economic rules that crucify the 3 Billion fellow human beings who live on less than $2.50 per day.
That's why the rich pay more tax anon.
I wish, I wish, I wish....
all those Milton Friedman and neo-lib adherents had gotten there way - BUT with it there had been ABSOLUTELY no state interference in what eventuated (as was also their wish when all was going along swimmingly). Capitalism very nearly disappeared up its own ass (as Marx hoped it would, and the rest of us hoped it wouldn't).
The good thing to come out of it all is that those that are quick to pour shit on social welfare are beginning to have to justify corporate welfare.
I know where I'll put my money though - corporates can't vote - so ultimately they have to lobby or bribe. Electorates eventually get pissed off.
Sometimes they even string the assholes that hoodwinked them up!.
In NZ, we're just entering the first stage - where those "in power" are busy hoodwinking.
The more I think about things, the less I fancy Rodnbey's long term prospects especially since he has that arrogance and want for fame.
He will be remembered - especially if and when super-cities turn to shit, which inevitably they will.
Not a great deal of diff between a Nazi pastel blue and an Act lemon yellow.
Same shit - different stink
"If the changes are implemented, someone on the average wage of about $48,000 will be about $5-$10 a week better off, according to New Zealand Institute of Economic Research figures to be published this week.
....
Lifting the tax to 15% will add $21.25 to the average weekly household bill. "
OK, am I missing something here? How the FUCK are we going to end up with more money in our pockets when lifting the GST appears to add more to the average weekly household bill than we'll get from the tax cuts, by a good $10~15.
"That's why the rich pay more tax anon"
No, it is a confused assortment of economic concepts you clearly don't understand.
Anyone who thinks WW2 was caused by 'Capitalism' can only be called a moron.
Thank you so much for your comment Anon. However. I contend the economic depression caused by the Great Stock Market crash which was fueled by unregulated capitalism caused a crises within capitalism which was challenged by Fascism and Communism and culminated in the Second World War.
Wasnt it recently stated that 50%of the rich dont pay tax.
Doesn't this just reek of "let them eat cake?"
I appreciate that this discussion may now be over, but for those still watching... this blog and more importantly the discussion that follows is perhaps of some interest to the economic debate, not necessarily specific to tax cuts.
http://www.bbc.co.uk/blogs/adamcurtis/2010/02/the_economists_new_clothes.html
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