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More Tax?

Entry 872, on 2008-10-20 at 22:06:14 (Rating 2, Politics)

A headline in the Herald this morning quoted a tax expert from the accounting firm, Pricewaterhouse Coopers New Zealand, saying that tax could have to rise to cover the worsening financial status of the country due to the global economic crisis and extravagant election promises. This might include an increase of GST to 15% and an increase in the top personal income tax rate taking it up to 45%.

Well isn't that helpful? We all know that its possible that tax might increase. Its also possible that it might decrease or stay the same. The reality is that now that we are fully exposed to the global economy its difficult to say what might happen.

Maybe the statement is designed to scare people at the upcoming election. Of course, Labour has said it will never let GST increase and National made a somewhat less certain response but still indicated an increase is unlikely. I can't imagine that any party brave enough to increase GST would be very popular at the election which followed.

I don't tend to have a lot of confidence in economists' and accounting professionals' opinions because I don't really see their work as having much academic credibility. I hate to harp on about it, but the financial crisis has also dented many people's confidence in financial professionals too. So what was the point in making this statement? There doesn't seem to be one to me.

But getting back to the original idea about GST. Would it be a good idea to increase it? As someone with a somewhat socialist emphasis you might think that higher taxes which would allow greater services might be something I would support and maybe I would normally, but not through GST.

I think tax should be paid by those who can afford to pay it. GST is paid by everyone for items which aren't really optional: food, rent, power, etc. Some people might say that everyone should pay the same tax and those who make more (through their own hard work) should be allowed to keep it. I don't think there's a strong correlation between hard work and high income for a start so that theory doesn't hold up. Also, do we want an underclass of people driven in to subsistence living by paying high GST?

Even if flat tax was fair (it isn't) there is still the practical point of affordability to consider. I would be quite happy with the Green's idea of eliminating GST on food. I know it makes the system complicated and can lead to weird inconsistencies (like they have in Australia) but those disadvantages might be outweighed by the advantages of reducing poverty. Its at least worth considering.

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Comment 18 (1786) by OJB on 2008-10-30 at 05:21:45: (view earlier comments)

Generally highly paid parasite's pay is determined by other highly paid parasites who share the same anti-social personalities. Therefore value judgements about how they are paid seem irrelevant. That's why truly useless scum like Gattung get to hang around too long and aren't "let go" even when they fail.

I believe there will be compensation for increasing power prices under the ETS. I don't support it in a simple form but the world does have to do something about global climate change and I'm not sure what else there is.

The "socialist agenda" is part of green policy as much as the environmental stuff. I certainly don't support all of their policies but I do think they give good balance to the more right wing parties, including Labour.

For the quiz...

The Progressive Party 81%
Labour Party 76%
The Green Party 76%
NZ First 75%
United Future 66%
National 56%
Act 36%

Almost the complete opposite of you. No wonder we don't agree on anything!

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Comment 19 (1788) by SBFL on 2008-10-30 at 19:02:48:

Re ETS - uneven playing services are going to cause all sorts of unintended consequences. Have you compared our ETS to Europe's? I doubt ETS is the only option to tackle climate change, and in its current form it appears a bit of an overkill.

Re Quiz - Indeed almost an exact mirror image on the order. I notice I am centre-right when you take into account the %'s though, which sounds about right to me. Where do you think your results put you on the spectrum?

You might be interested in this piece: Apple, Obama and gay marriage

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Comment 20 (1789) by OJB on 2008-10-30 at 20:38:11:

I don't like the ETS. For one thing, the biggest polluter in NZ are farmers but they aren't included initially. Why? But the question is: what should we have instead?

Not sure where I would be on the spectrum, but I always thought I was center-left. I don't think you can tell very precisely from that survey. From other ones I have done I am definitely moderately left of center.

Not sure what our point is regarding the link.

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Comment 21 (1790) by SBFL on 2008-10-30 at 22:25:44:

Too big a question for tonight. Plus I had a brain explosion with the grammar at start of comment 19. Don't know how that came about.

I think you mean "modestly left of centre..." . Haha. I wouldn't say you're extreme/radical or anything but from your posts I would definitely put you comfortably left; slightly left of Labour. Subjective viewpoint of mine of course.

Just thought you might be interested. Your favourite global corporate getting involved with politics....

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Comment 22 (1791) by OJB on 2008-10-31 at 09:51:25:

I guess from the perspective of current politics I am more than moderately left, but from the perspective of the classic definitions I am far more centrist. Where the center is changes with the cycle of current political beliefs. But these labels are only rough guides anyway and I prefer to avoid them.

I admire Apple for the products they create but I am neutral regarding their business practices (like some, dislike others) and I don't like Apple legal much. In comparison with other corporations Apple is great - at least they make good and innovative products - but I still don't necessarily admire them apart from that. Whether corporations should be making donations to political parties is another issue altogether.

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