Add a Comment   Listen to Podcast   Up to OJB's Blog List

Tax

Entry 175, on 2005-05-24 at 16:14:06 (Rating 3, Politics)

With the election looming, the National Party opposition here in New Zealand, has resorted to classic tactics to gain support and attempt a surprise win. If all else fails, tax cuts are always worth trying. If the voter doesn't analyse what you are saying too closely, and just accepts the idea on an emotional level, they will likely be sucked in to something which is totally contrary to their best interests.

There's no doubt that voters are more sophisticated now, and the tax cut strategy isn't a sure thing, but it is still a useful tactic when everything else (such as racist attacks, personal politics, etc) has failed.

But why are tax cuts not a good thing? Surely everyone could do with more money in their bank account and less in the government's? Well yes, but there is a price to pay. Lower taxes inevitably means reduced government services and increased expenses, through increases in mortgage interest rates, to many average people. Also tax cuts seem to inevitably favour the rich (what would you prefer: 5% of $200,000 or 5% of $20,000?), and the rich aren't the ones who really need it.

Unfortunately, many people avoid analysing the situation too closely and react in an overly simplistic way to the more simple message: less tax. You can see a similar reaction to simple, emotional politics in the US. Of course, unlike the US, we do have a certain amount of choice here. The US parties are almost indistinguishable, but Labour, even though its far from perfect, is a distinct improvement over National here in New Zealand.

Comment 1 (52) by Jeff on 2005-06-30 at 23:12:57:

$200,000 @ 40% = $80,000
$20,000 @ 20% = $4000
Less 5%
$200,000 @ 35% = $70,000
$20,000 @ 15% = $3000

The person earning $200,000 in still contributing $67,000 per year more to the government than the person on $20,000. Who is doing who a favour? Tax becomes an emotional issue when it becomes a burden. Also most historians (finance minister included) would know that many governments have been defeated on this very issue. According to you we only have two choices of government, tweedle dumb and tweedle dee, try thinking outside the box!

Comment 2 (53) by OJB on 2005-07-02 at 23:13:18:

If we wanted to try to make NZ a more equitable society we could give everyone a tax reduction of a set amount, say $2000, instead of a percent. That would favour low income earners but the rich would still get a reduction as well.

And I didn't mean to imply there were only two voting options. In fact I will probably vote Green,

Comment 3 (66) by Sean on 2005-08-09 at 17:21:41:

OJB, why are you looking at this in terms of poor people and rich people? Maybe you are the one reacting overly simplisticly. The problem now is that the middle class are paying too much tax, and this is why it has become such a big issue this time around.

This has happened because:
a) Labour introduced a new tax tier at $60,000, and
b) Incomes have gone up over the years but the tier cut-off point hasn't.

Obviously a government needs a certain amount of income to fund essential services it provides to the public. I hope that if National get into government that these services don't diminish. If National do get in I hope all the money-wasting services get axed. Many government funded projects have been brought to light by the media over the past few years that most would agree are dubious at best. This makes rich, middle, and poor income earners angry. However aside from the hip-hop tours and twilight golf, the never-ending argument is always in what is essential and what isn't. I won't dare to define them!!

Comment 4 (72) by OJB on 2005-08-10 at 19:56:19:

What's money wasting and what's not is very much a matter of opinion. The way these things are presented by the opposition and media often make them look ridiculous, but its often not that obvious behind the scenes.

Of course, I'm sure there are some real dodgy deals out there, but the danger is always throwing out the baby with the bath water, and I'd rather waste a little bit than miss out on useful services because of over-enthusiastic National cost-cutting.

Comment 5 (80) by Sean on 2005-09-04 at 20:01:10:

I guess that behind-the-scenes, some of these programmes may be different from what they are portrayed, but do these "useful" services need to be taxpayer funded? Few would say they were essential services.

Why is your website down so often? This must really affect your traffic.

Comment 6 (92) by OJB on 2005-09-05 at 10:46:00:

I would really like to know why you think my web site is down. Could you contact me about it next time it appears to be down? It is monitored 24/7 and has been down for about 12 hours in the last 3 years - and that was just for system upgrades.

Comment 7 (98) by SBFL on 2005-09-05 at 19:22:01:

Will do. Last week it was down for 24 hours (I tried across 2 days). On the first day it loaded the frontpage but timed out when I clicked on any of the links. The next day it only loaded the frontpage without the graphics.

Comment 8 (104) by OJB on 2005-09-05 at 22:37:44:

The site logs show the site is being accessed successfully every minute of every day, and the monitoring service I use has detected no down time, so I'm mystified. If anyone else is reading this and has noticed any down time please email me with details (my email address is at bottom of every page). Thanks.

You can leave comments about this entry using this form.

Enter your name (optional):
Enter your email address (optional):
Enter the number shown here:
Enter the comment:

To add a comment: enter a name and email (optional), type the number shown, enter a comment, click Add.
Note that you can leave the name blank if you want to remain anonymous.
Enter your email address to receive notifications of replies and updates to this entry.
The comment should appear immediately because the authorisation system is currently inactive.