National NZ sends mixed message on tax

Some of the media reports from New Zealand imply that the National lead coalition government will increase GST to pay for a cut mostly to the top income tax rate. In my book that would be daft. New Zealand already has a higher GST than Australia and New Zealand does not have the equivalent of Australias tax free threshold. For a young person starting out the tax system in Australia seems comparatively better in relative terms. Little wonder so many young Kiwis try their luck in Australia.

The National Party youtube message seems to imply a more general cut to income taxes. However raising one tax to cut another is really just shuffling deck chairs.  I suppose we will find out the reality in the fullness of time.

2 thoughts on “National NZ sends mixed message on tax

  1. “However raising one tax to cut another is really just shuffling deck chairs”.

    Sometimes, sometimes not. It depends on what difference the changes in impact and incidence make. You probably recall the suggestions I made about putting tax cuts onto GST to promote employment, keeping the changes budget neutral by raising other taxes or even the standard GST rate; those would have operated through effects like that.

  2. PML – I accept your point. I was being a bit flippant. However I find it so disappointing that governments of all persuasion almost never deliver real reductions in tax.

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