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Wednesday, 6 October 2010

Sir Roger and the tax-free threshold

Roger Douglas writes at Craccum, predictably slamming the 1 October "tax switch":

National’s unwillingness to cut expenditure means that it just rebalances the tax intake. If it lowers taxes in one area it must raise taxes in another. Rather than reduce wasteful Government expenditure, National has chosen instead to continue to heavily tax.
Treasury has pointed out that this isn't exactly correct - the increase in GST doesn't bring in enough revenue to cover the reduction in income tax. Nonetheless, Douglas puts forward his perennial favourite policy: a tax-free threshold. This time he's proposing making the first $30,000 tax-free. According to the Budget 2010 numbers, this would mean 57% of New Zealanders pay no income tax. In order to do that, you would have to make significant changes to social welfare.