Check my big :rant: in the Clark v Brash thread, start the discussion!

Kinda dum, he spouts about prtecting workers an dworking fro families but they recieve a dunce tax package, he knows he's lost families and students votes, so he's looking for upper tax bracket votes!

i think too little too late, too little...

Shouldn't that be, anyone without a child?

Woot, I'm probably going to get a zero dollar tax cut under National for my 15+ hours a week work. Sounds good to me!

Taxcuts are pointless, for the amount that people get back its not worth it. The decrease in public services dont warrant the $10/week we get back.

If the amount of money people are getting much from the taxcuts is very little, then by the same logic the amount they're losing from public services is also very little.

Think of it this way

If we have an apple, one person can eat the apple and be full (ie the government), if we cut the apple up into 4 million pieces, the size that each person gets is pretty much nothing (the tax cut money). Its better in the hands of the government.

Well why not raise taxes even further if it's better off in the governments hands? Hell, why not redistribute all wealth completely?

Well some wouldnt argue about that :P

Of course with everything oob there is a happy median.

Yes, and I'd say that median is lower than it is now, whereas you'd say it's higher.

So we agree to disagree?

Tax cuts are great in principle. But....if tax is cut too much then spending on public services will fall and result in shitty schools/hospitals. Despite the tax cuts the same number of people will be using the services as before because the tax cuts arent/wont be enough to pay for people to use private services so there will be as much pressure on poor services. no one likes crappy schools and hospitals. less people will stay in NZ and the brain drain begins ya di ya da

I don't agree with that...

On the flip size, the higher taxes are, the more people leave NZ because they can make more money elsewhere, especially the wealthy who do not receive much benefit from a more socialist style economy.

Capitalism is unfair: some are rich and some are poor. But Communism is completely fair: everyone is poor.

And spending on consumer goods will rise, which means more GST, to partially, but not completely, offset the tax loss. And those that can now afford a trip to Rotorua/ChCh/Queenstown/etc... for a break will put that money back into our economy.

Either way that money will be there in the economy, whether through government spending or through consumption.

But the overall decline in state services would be unacceptable, especially when they seem to be unable to operate with the current level of funding.

I agree, which is why a tax cut is a big no-no. The costs outweigh the benefits

You know, it'd be great if the government wouldn't pay for 'your own damn fault' healthcare. For instance, if someone breaks their arm, or is caught in a burning building, or gets cancer, I don't mind paying taxes towards their healthcare. But if a fat fuck eats like an elephant their whole life and needs heart surgery, or a moron drinks like a fish for their whole life and needs a liver transplant, they should pay for that their own damn selves.

Hmm, come to think of it, alcoholics may not be the best example, since they pay taxes on their booze, which probably pay for the medical costs.

Ah oob. See here we have a problem. If people only paid for themselves, then there would be no way of covering those unable to pay their own way.

There is the underlying possibility that the health system will get so bad that people will move to the private sector in such numbers that public healthcare becomes more accessible, but that is a long long way off happening yet.

Which is why the public healthcare should only cover people who don't fall into the 'sick through idiocy' category, then we'd have shorter queues.

I guess that's why rich folk fork out for private medical insurance as well as paying for others via taxes.

It'd be real nice if paying for your own health coverage got you off the hook for paying into the public fund. Then I could pay for who I am: a thin young male who doesn't smoke and hardly drinks.

The distribution of that money will be very different, and it will have less government wastage via consumption.

From what I've read, National's tax cut plan included preserving existing, somewhat crap, levels of funding. At least for the core health services, education and super fund.

What I like the most about ACC is that is has a wonderfully large investment portfolio which is uses to fund what it does. I believe, but am not totally certain, that the super fund acts in a similar fashion. Which is exactly what private insurance companies do with success.

To me these are excellent ways for a government to provide funding for its services, by investing in various private and public sector opportunities, both overseas and in NZ.

I've often thought that a neat idea would be for a government to save up a ton of money over the course of many years, which it then puts into investments, of which it has so much that the state can fund itself entirely from the earnings on those investments (ie. no taxes). There's probably some flaw in this idea that I'm missing though.

This idea works well for the Oil producing nations as well.

On a semi-related tanget, I do believe that we should let Nurses, Doctors, Techers and Police Officers not have to pay any tax at all, or at least only kick in at say $40k onwards, as an incentive to keep them on and make them feel appreciated.

Or for cops, just look the other way when they take grift ;)

If the amount of money people are getting much from the taxcuts is very little, then by the same logic the amount they're losing from public services is also very little.---oob


no. people earning less get 'very little' from the potential tax cuts. the public services funding is lost throught the substantial tax cuts offered to the upper tax brackets

They're already said that there won't be a substantial cut in public services for health, education and police.

That's absolute bullshit that National is going to maintain spending. On the most simple level, they are not going to have enough money to do that.

A)This myth about the government having several billion dollars sitting in a bank account, which National has irresponsibly yelped about considering two out of three of their top white men [i.e. the top dogs in the party] have economic experience, is so ridiculous, as that money is being used to pay off NZ's debt. Thus it's not going to stick around when National arrives.

(National debt as a percentage of our GDP has declined by FIFTEEN PERCENT under Labour)

B) Surpluses are going to decrease as the economy goes downward. Thus, with several billion dollars worth of tax cuts, we're going to start seeing budget deficits and foreign borrowing.

On the next level, Mrt, are you familiar with the fact that National is going to end subsidies to see the doctor and get medication? John Key mentioned this on Close Up at Seven.

National's promises remind me of that Tui billboard on the intersection of Khyber Pass and Symonds Street with all the promises on it. I really don't see how you can promise both tax cuts and maintaining high public spending.

We're running in surplus while still paying off debt and running state services. That surplus is going back to the people. I can't see how that would affect current spending levels, since that money wasn't going to be spent on state services anyway.

Right, so Labour suddenly decided to grab hundreds of millions of dollars from this to write off student loans instead? What evidence do you have to show that this is a myth? I can clearly see from here that the difference between revenue and expenses is 53.3 - 48.2B = 5.1B. That's from Treasury itself.

So tax cuts won't encourage an increase in the economy due to people spending more on consumer goods, increasing company resources (equipment and labour), etc...? Or is the economy going to go downward regardless of who wins?

*shrugs* Just don't get sick enough to require a visit to the GP/Hospital.

MRT, The Government hasn't "paid" for dropping interest on Student Loans yet because it hasn't done it.

You have to look at the budget as a thing flowing through time. Cullen has done this consistantly in his budget outlook.

By the time we start "paying" for not charging interest on Student Loans, the next round of budgeting will have started - and Cullen can set aside another lot of cash (projected) for discretionary spending.

One of the Key reasons Labour is running surpluses is because National hammered home in the nineties that any Government that would willingly run a deficit, espicially in boom times, (ala Muldoon) has ZERO credibility. Amazingly, despite the biggest economic boom in 50 years, Key has decided that these are depression times, and we need to run deficits (through not reducing spending enough, AND offering tax cuts) to stimulate the economy. (Or else he has no credibility, take your pick) This will drive up interest rates, as the economy is actually already at capacity, effectively wiping out the tax cut of almost anyone interested in buying a house, or who already has a house.

A lot of people are prediciting an economic downturn whoever wins, simply because of the cyclical nature of the economy. Others aren't, on the basis that the world economy is booming ahead at the fastest rate since the 16th century, mainly led by Asia (China, India, Thailand) and, this may surprise you, Africa.

It is certain, in my mind, that Government provision of basic goods like healthcare and education ABSOLUTELY contribute to economic growth - if people can't read and suffer from horrible illnesses that could have been treated easily in childhood, then they aren't going to contribute to economic growth.

National does intend to cut back services. Pharmac will be gone - it is the real impediment to an FTA, not our nuclear ban. This will mean increased costs on pharmecauticals, as we will agree under an FTA with America to restrict our trade to patented American drugs, as Australia did. These cost more. National intends to essentially level off Government spending, which in real terms is a cut, as the cost of these things rises every year, with a higher population and inflation. Particularly in health, where already our spending is hardly enough, with an ageing population we will be needing to massively increase our spending.

Labour has tried to keep down the cost of health spending - by substantially increasing Primary Healthcare, aimed at seniors and those on the lower end of the socio-economic scale. These are the people who most often need treatment, and by addressing the problem earlier on you save literelly lives and billions of dollars.

The basic truth is that National's tax plan is unworkable over the long term, unless you believe that people who can't provide for themselves should simply go without. Its unworkable over the short term, because the economy is too hot for tax cuts. You'll raise interest rates, screwing over our middle class, and scare off international investors. If it cools down, theres no room for tax cuts without Government expenditure cuts.

Putting aside the fact that I disagree with it, I think that's the best expressed argument for low taxes I've read for ages.

One reason for Labour's alleged Huge Secret Surplus: each year's student loans are counted as revenue for the government, and go on the plus side of the books as "debts owed". That's a lot of money over six years, but we can't exactly spend it on tax cuts in September now!

Spending on consumer good will not nessacarily rise. You forget that a substantial amount of NZ $$ head off shore, IE, spent on overseas goods. You can't garuntee that money will be ploughed back into this economy.

the only group of people who get a substantial tax break could already afford holidays.

wealth is associated with posessions. you look at the things rich people have, and its nice cars, nice houses, nice watches, nice boats etc etc. im not saying they arent entitled to such posessions, however, im curious as to how someone spending money from a tax cut on a new audi is going to benefit families on low incomes.

show me a clear link between reducing taxes for the wealthy and a decrease in poverty, in any country. not in america under reagan you cant, thats for sure. not in england under thatcher, thats for sure. and im not talking about rhetorical 'oh, open the markets, private enterprise, huge investments.' that doesnt mean anything, unless its substantiated with evidence of success. im not saying it cant be done. im just yet to hear a proper, thought out and rational explanation.

Really fucking long post ahead

Here's my basic theory on the difference between left wing and right wing economics: the further right you go, the higher total wealth is, but the more unequal the distribution of that wealth is. So if you go too far left, it's very equal but there's very little total wealth (ie. everyone is poor), whereas if you go too far right there's a great deal of wealth but it's distributed much less evenly. My knowledge of history bears out my theory. Bear in mind this is 'ceteris paribus', I have ignored factors such as corruption, which allows a few to gain a great deal of wealth regardless of the economics.

Consequently, you will always be able to say things like 'if we go further left it will help the poor', and you'll be correct, but if you go to far you end up strangling the golden goose, because increased distribution of wealth acts as a disincentive towards hard work: those who already work hard get less of what they earn, thus having less incentive to work, and those who don't work hard (in a quantifiable way) get more that they didn't earn, and thus they also have less incentive to work.

I should point out that it's pretty much impossible to do a basic tax cut without the wealthy getting more out of it than the poor, because they pay more in the first place. However there are two ways to think about it: 'poor people pay x less taxes than before, rich people pay y less taxes than before', or 'poor people pay x% less taxes than before, rich people pay y% less taxes than before'. If you think of it the latter way, you will find it's a lot closer together, but because it's usually painted the former way (especially by those that oppose the tax cuts), it always seems as though tax cuts are strongly in favour of the rich.

BTW, while I like right wing economics because it serves my interests (for the time being at least), I have no 'philosophical' stake in it, in other words, I am a centrist and don't really think either side is particularly better than the other, they each have their pros and cons. For the sake of balance though, since this forum is filled almost entirely with lefties, I will continue to argue for the right... when I can be fucked (and I'll be away the next few days).

Uh...We have tax brackets...so I don't see how this is a valid point...tax cut for the lowest bracket will have the same effect for those in the high bracket as in the middle bracket....

Progressive Tax Rates

What you say is only logical if you are assuming we have a flat tax set-up....and I didn't pick you as an ACT voter...

Well here's an example. Let's say you have two people, one earns half of the lower tax rate ($19000) and one earns the max at that rate ($38000). If the lower tax rate is lowered, both of them will have their taxes decreased by the same percentage of what they were paying before, but one will save twice the amount the other saves. Thus you can see how the tax cut seems more equal when expressed in percentages rather than fixed values.

Now here's an example with differing income brackets. Here we have the man who earns the maximum for the lower bracket, and another man who earns the maximum for the middle bracket.

38000 -> 7410 = 19.5%.
If lower bracket is lowered by 1% this man saves an extra $380

60000 -> 7260 + 7410 = 14670 = 24.45%
If the lower and middle brackets are lowered by 1% this man saves an extra $600

When the percentages are compared ((24.45-19.5)/19.5), the rich man is only saving about .25 times more than the poor man. When fixed figures are compared ((600-380)/380), the rich man is saving about .58 times more than the poor man. So the apparent difference is more than doubled when expressed in fixed figures, so quite naturally those supporting left wing economics will express their arguments in fixed figures because the bias supports what they're saying.

Feel free to check my math, I might have fucked up something, but the principle is correct.

Well that's a question of income, not of tax rates isn't it?

Please elaborate, I don't follow you.