This is cool
David Slack has put together a calculator which calculates how much people will get from tax cuts, and what cutting various spending areas will save, to fund the tax cuts.
Now David is a leftie, and it is designed to turn you off tax cuts. It does the usual little tricks like expressing the cash to taxpayers as a weekly figure, and presents the total cost as an annual figure, rather than also a weekly per capita figure. It is meant to scare you off.
It also makes some bogus assumptions such as that if one got rid of the wananaga (which I do not actually advocate) a third of their students would enrol in universities and hence almost save no money.
But regardless of all that, I love playing with it. Both to see how much one can get back, with various options, but also the pure pleasure from clicking yes to abolish various daft government schemes.
June 25th, 2005 at 12:37 pm
I find it annoying. A good technique to make people accept their proposals is to provide a limited range of options that “prove” the options are less palatable than their preferred option.
As such, it is extremely limiting. No impact on increased revenue from GST turnover (when people pay less income tax, they still spend money, which increases GST revenue as it is spent multiple times throughout the economy)
It shaves 2% off health, as if that is all that is possible. Remember, Labour added 3.5 billion to health spending with now significant increase in outcomes over 6 years. Presumably, we could shave 3.5 billion back and manage things better.
It does not make an effort to account for the effect of investment by lowering the top rates and business rates, and the growth to the economy.
There are 100 other areas to look at, that would change the balance, but that appears not to be the point of the exercise. The point is to convince you there is no other way than the Labour way (or any slight variation of that)
I sincerely hope National do not fall for it, and are prepared to move outside the box Labour has drawn in the preceding weeks in defining what fiscal responsibility looks like.
A good effort by David, and an interesting diversion, but people need to use it with their brains in “Disclaimer” mode.
June 25th, 2005 at 12:52 pm
I played around with flat tax rates of between 10% and 15%. Amazing how much I wouldn’t be paying….which means as a high income earner would plow into investing, spending and generally spreading around the economy where I saw fit, not throwing it at underserving projects I can’t nor would ever support.
June 25th, 2005 at 2:02 pm
And you also get the opportunity of suggesting other mechanisms of paying for a tax cut:
“use some of the $8b surplus. Hint. Hint.”
June 25th, 2005 at 2:03 pm
Zentiger: Health is a black hole for money, advances etc mean that in every subsequent year you always need to spend more in real terms to maintain the current level of service (Baunmols cost disease?? Econ361 was a long time ago..), not to say that there is no scope to save money, but ur presumption is a little of the mark.
Tax cuts are being sold to middle NZ, but from plugging some figures, it looks that on the average or median wage that some pretty drastic changes are needed to give people more than $10 a week back. Spose its better than getting $0 back, but would like to see where the money comes from (the projected falling surplus won’t cover everything in a couple of years, assuming, big if, that the economy does finally slow)
June 25th, 2005 at 5:34 pm
When you are looking inside a box Steve, its hard to see where extra stuff comes from.
Health from 6 billion to 9.5 billion and you say that it is logical in 5 years we will need to increase it to 12 billion or more?
There are other ways of running a Health system.
June 25th, 2005 at 6:18 pm
To be fair to David Slack, he’s a lot more honest about the assumptions, guess-timates and biases he’s operating on that Dr. Cullen.
June 25th, 2005 at 7:38 pm
Well in Oz we have a Tax-free threshold (for full time residents only) up to $6000, then it’s $0.30c in the dollar for $21,601-$52,000.. that’s $2,652 + 30 cents for each $1 over $21,600; and .. $52,001-$62,500 (Tax $11,772 + 42 cents for each $1 over $52,000);
$62,501 and over (Tax $16,182 + 47 cents for each $1 over $62,500… ouch!
June 25th, 2005 at 10:16 pm
I put in the tax rates I pay in Singapore to see what would happen, but there was no option to remove all public health spending or all welfare spending and require people to actually work for their money. Guess I’m stuck here…
June 27th, 2005 at 1:11 pm
I put in a flat 20% tax up to $60K and the result said it would cost $3.1Billion and then went into the rant on how little any cut would save This of course all ignored the fact that the $3.1B is only 38% of the surplus.Shows how dumb socialist supporters are.