Where does the money for National promises come from?

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#2561158 9-Sep-2020 15:45

MikeAqua:

The same place as the govt's current expenditure - borrowing.

It's not desirable under normal circumstances, but the economy is in a lot of trouble. After the election we will see the pain deferral policies end and the true extent of economic damage will be revealed.

They are claiming not to raise taxes, reduce debt faster than forecast and spend this extra money. It doesn't add up.

I agree with your second paragraph.

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#2561187 9-Sep-2020 16:16

Handle9:

They are claiming not to raise taxes, reduce debt faster than forecast and spend this extra money. It doesn't add up.

I agree with your second paragraph.

More details are apparently coming post-PREFU, which was delayed by Covid19 changing the election date.

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#2561992 11-Sep-2020 06:50

Hooton, who is erratic at best, did raise an interesting point in his column today. One of the ways National could claim core crown debt to be lower is to move it into their proposed infrastructure bank. This would move it off balance sheet while maintaining an open liability.

It's one of those bits of financial gymnastics that governments and corporates do to manipulate their debt ratios. I wonder if this is nationals way of lowering "debt."

sen8or

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#2567359 18-Sep-2020 10:55

Ok, do so a temporary tax cut solution offered by National today but promises of no cuts to spending on key areas.

Labour policy - no effect on 98%, small increase on 2% who arguably can most likely afford it, the epitome of a robin hood style labour policy. Now I am in the 98% bracket and would be unaffected and largely I don't disagree that taxing income levels over the $ 180k mark at a higher rate is a bad thing either, but when its the 98% that are hurting the most, designing a tax policy that ignores then completely seems a little short sighted.

National Policy - This will get slated by the labour supporters, certainly benefits the upper end of "middle income earners" more than the lower income earners, nearly $60 a week more for $90k salary, but only $8 for minimum wage workers. Now I totally get that higher income earners pay more tax and therefore get more benefit from tax relief (I pay 3x more tax than someone earning 1/2 my wage), but has this tax cut gone a bit too far? Could they introduce another tax bracket like labour, at say $150-180k so that those at the top end of things don't get the benefit of it?

Also, theres nothing more permanent than a temporary solution. Undoubtedly this tax cut / realignment of the income brackets would have to become more permanent following its expiry?

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#2567364 18-Sep-2020 11:12

sen8or:

Labour policy - no effect on 98%, small increase on 2% who arguably can most likely afford it, the epitome of a robin hood style labour policy. Now I am in the 98% bracket and would be unaffected and largely I don't disagree that taxing income levels over the $ 180k mark at a higher rate is a bad thing either, but when its the 98% that are hurting the most, designing a tax policy that ignores then completely seems a little short sighted.

I may be over simplifying this (as you've done with lumping 98% together) but you tax the rich to pay for the services you provide to the poor. Lowering the tax rate for someone who already gets 4/5 of bugger all does nothing to help them in reality.

My wife and I are in the 2% and we both welcome paying more tax. My wife sees what the cuts to social services have done to those at the bottom on a daily basis, and it's not pretty.

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#2567417 18-Sep-2020 12:01

sen8or:

Ok, do so a temporary tax cut solution offered by National today but promises of no cuts to spending on key areas.

Labour policy - no effect on 98%, small increase on 2% who arguably can most likely afford it, the epitome of a robin hood style labour policy. Now I am in the 98% bracket and would be unaffected and largely I don't disagree that taxing income levels over the $ 180k mark at a higher rate is a bad thing either, but when its the 98% that are hurting the most, designing a tax policy that ignores then completely seems a little short sighted.

National Policy - This will get slated by the labour supporters, certainly benefits the upper end of "middle income earners" more than the lower income earners, nearly $60 a week more for $90k salary, but only $8 for minimum wage workers. Now I totally get that higher income earners pay more tax and therefore get more benefit from tax relief (I pay 3x more tax than someone earning 1/2 my wage), but has this tax cut gone a bit too far? Could they introduce another tax bracket like labour, at say $150-180k so that those at the top end of things don't get the benefit of it?

Also, theres nothing more permanent than a temporary solution. Undoubtedly this tax cut / realignment of the income brackets would have to become more permanent following its expiry?

They're both crappy, uninspired policies. National could have stolen a march on Labour by targeting the lower-end, and Labour could have done something to actually benefit 98% of earners instead of a pathetic point-scoring exercise that achieves very little. Neither goes into the short of wholesale realignment with inflation since 2010 that sees workers taxed nominally on wages that loose real purchasing power each year, or does it do anything to reduce the burden of wage earners in the face of rocketing property prices. Having said that, I don't recall Labour being slated for unwinding Bill English's legislated tax cuts, which was effectively a tax increase for middle-earners. Funny how that works.

We deserved better this time around though. The general populace has sacrificed a lot over the last three years and have been largely ignored this election-cycle.

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#2567434 18-Sep-2020 12:23

Nationals tax cuts (threshold increase) do not work for economic stimulus in the circumstances that exist at the moment (demand driven recession). As has happened with stimulus payments to "everybody" in the USA, the wealthy simply put the money in the bank, invest in shares, property, whatever.

National's plan offers nothing for people who are struggling, and results in "trickle up" giving money stolen from future generations to the rich.

This isn't a "left wing" view - it's economics 101.

If you want a dystopian, even more divided society of haves and have nots - it's the perfect way to get it.

sen8or

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#2567440 18-Sep-2020 12:31

On balance, i think Nationals' goes some way to re-alignment. There were some stats done a while ago about "average wage earners" and how many have shifted into the upper tax bracket(s) over the past 10 years or so (whenever it was last changed) with more "upper income earners" at the $70k bracket.

Are the buckets proposed by National the right ones? Really not sure. I would guess that they have got the statistics to back up where wage brackets are and what % of the population will benefit by how many $.

They have stated the "average" of $50/wk benefit, this is probably a distorted measurement and it really should be the median value, this would give a much better idea as to how many would benefit more or less that whatever that $ figure is.

MikeAqua

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#2567477 18-Sep-2020 13:30

martyyn:

My wife and I are in the 2% and we both welcome paying more tax. My wife sees what the cuts to social services have done to those at the bottom on a daily basis, and it's not pretty.

I'm in the 2% too. If taxes are increased I plan to sacrifice some salary for an extra weeks leave every year (reducing my overall tax contribution despite the tax increase). I can recoup that income by: -

- Ceasing charitable donations;

- Increasing rental revenue (I haven't reviewed rents since Labour's last changes to the Tenancy Act);

- Deferring nice-to-do rental maintenance;

- Stop paying someone to clean our house;

The net effect will be that I'll have more money in my hand and I'll pay less tax despite the increased rate.

Mike

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#2567499 18-Sep-2020 14:04

MikeAqua:

I'm in the 2% too. If taxes are increased I plan to sacrifice some salary for an extra weeks leave every year (reducing my overall tax contribution despite the tax increase). I can recoup that income by: -

- Ceasing charitable donations;

- Increasing rental revenue (I haven't reviewed rents since Labour's last changes to the Tenancy Act);

- Deferring nice-to-do rental maintenance;

- Stop paying someone to clean our house;

The net effect will be that I'll have more money in my hand and I'll pay less tax despite the increased rate.

I have to wonder what the point of your post is.

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#2567504 18-Sep-2020 14:12

The proposed tax cuts will do nothing to stimulate economic growth, certainly not to the extent needed to counter the global Covid recession. They will lead to a massive increase in inequality and all of the social ills which accompany it. This will lead to a higher demand on social services who are facing having their funding frozen to meet the return to surplus targets they have set. They are also planning to stop contributions to the NZ National Super fund which will just lead to greater cost to the country in the future. Especially since the cost of borrowing for the government is so low right now this makes no economic sense.

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Fred99

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#2567610 18-Sep-2020 14:23

Rikkitic:

MikeAqua:

I'm in the 2% too. If taxes are increased I plan to sacrifice some salary for an extra weeks leave every year (reducing my overall tax contribution despite the tax increase). I can recoup that income by: -

- Ceasing charitable donations;

- Increasing rental revenue (I haven't reviewed rents since Labour's last changes to the Tenancy Act);

- Deferring nice-to-do rental maintenance;

- Stop paying someone to clean our house;

The net effect will be that I'll have more money in my hand and I'll pay less tax despite the increased rate.

I have to wonder what the point of your post is.

It's an anecdote.

Remember the adage: "on the internet, nobody knows you're a dog".

GV27

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#2567615 18-Sep-2020 14:32

Rikkitic:

I have to wonder what the point of your post is.

Actions have consequences?

OldGeek

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#2567616 18-Sep-2020 14:33

Rikkitic:

I have to wonder what the point of your post is.

That the increased taxes for those earning more that $180k per year may have negative consequences. If Labour are re-elected then when we can move to Australia, expect the flight of the rich maybe?

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#2567619 18-Sep-2020 14:38

Increased taxation is inevitable to fund the Covid-19 campaign and recovery. However it should not be the burden of the wealthy only. It The easiest way to fund it would be a temporary increase in GST, capital gains tax and temporary surcharge on RUCs.

Here is a crazy notion, lets give peace a chance.

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