The full package
October 8th, 2008 at 1:42 pm by David Farrar
This compares the situation at the beginning of the year, to what it will be like in year three of a National Government.
Again any errors are mine. What it shows is a very significant package – earners in the $30,000 to $50,000 range get their tax bill reduced by 20% to 25%. Those on $100,000 get only a 12% reduction – and proportionally less as income grows (8.1% at $200,000).
Now Labour did deliver the first of the four stages of this tax cut package. They should get some credit for it. Sure it took nine years, lots of screaming, a previous package which they cancelled after the election, only did it because National and the public forced them to, and an admission now they in hindsight they wish they hadn’t done it, but for Labour that is as close as you will get 
The rates used in this calculation are:
- 12.5% to $14,000
- 20% to $50,000
- 33% to $70,000
- 37% over $70,000
- A $520 rebate for incomes from $24,000 to $44,000 then abating at 13% until $50,000
Related posts:
- Editorials on Tax Package
- The transitional relief package
- Reaction to Tax Cuts package
- National’s Transitional Relief Package
October 8th, 2008 at 1:54 pm
Smart – very smart!
Vote:Someones been thinking and it ain’t Labour!
October 8th, 2008 at 1:56 pm
For a student with around 20,000 of debt, if they get a job paying between 30000 and 40000 there is their yearly interest paid.
Vote:October 8th, 2008 at 1:58 pm
wow..!..$5 a week for the poorest..
..and $70 a week for the (already) ‘well-off’..
(..um..!..shouldn’t it actually be the other way around.?
..in that a decent whack for the poorest is fed straight back into the economy..?
..and thus stimulates that economy..?
..whereas the wealthy just add it to their ‘wedge’..?
..i mean..it isn’t ‘rocket-science’..is it.?..)
..but no..
..you go national..!..eh..?
.and…is this the mainifestation of keys’ concerns for the underclass..?
..what a joke..!
and by/not until 2011
phil(whoar.co.nz)
Vote:October 8th, 2008 at 2:00 pm
Phool
When will you get it through your thick head that it is not “.$5 a week for the poorest..”
It is $5 for those who contribute FUCK ALL to the tax take, their is a good case for giving the “poorest” nothing.
BTW, do you get more because of the tax cuts?
Vote:October 8th, 2008 at 2:07 pm
Why is no one mentioning the elephant in the room – the tax increase to employers and businesses (by way of removal of tax credits) to pay for individual tax cuts. In pandering to Labour’s lower-middle classes, National has shafted some of their traditional support bases…
Vote:October 8th, 2008 at 2:10 pm
Why is no one mentioning the elephant in the room – the tax increase to employers and businesses (by way of removal of tax credits) to pay for individual tax cuts. In pandering to Labour’s lower-middle classes, National has shafted some of their traditional support bases…
Umm they haven’t… by strapping the employers contribution at 2% (and not 4%) the net effect is that the employers will pay exactly the same dollars as they do today, albeit with less paper work and not having to rely on any tax credit to come back down the chain.
And yes, changing the min commitment to 2% (whilst still offering higher options) will encourage uptake.
Vote:October 8th, 2008 at 2:11 pm
The tax change = my accountants bill.
Vote:October 8th, 2008 at 2:12 pm
Phil,
Your spelling and grammar is a wonderful example of our state education system.
On to the issue. Anyone involved in charity work with low income families (as I am) knows how much those tax cuts are going to mean to people and their ability to put more food on the table. Yes it would be good if it was more (blame Cullen for that) but its a substantial amount and far more generous to working kiwis than Labour’s.
Vote:October 8th, 2008 at 2:15 pm
You want an extra $50? Try working a couple of hours a week phule.
Vote:October 8th, 2008 at 2:18 pm
Geez you are a disingenuous prick Phil, 10k a year is a very very part time worker, not necessarily the ‘poorest of the poor’… but then again you’re not really interested in balanced commentary are you?
Vote:October 8th, 2008 at 2:18 pm
I reckon Key could give up politics and distribute free soup and money to the poverty-stricken, and some would spin it as
“Key is poisoning the poor with MSG and encouraging gambling.”
Vote:October 8th, 2008 at 2:22 pm
As I said below its a start But what the Nats have gotta do it ignore PhilU and the other dipshits and take the axe to tax and Gumint wastage
Its aint expenditure we have now It massive wastage on a grotesque scale.
none of the pollies have a clue as to the actual amounts wasted.
I would just love to get hold of the Sir Humphreys and shake the bastards down over their budgets.
I bet I could trim 25% and increase the KPIs and outputs without breaking a sweat.
Anyone whose got even a modicum of financial skills can slice and dice the sort of crapola padded budgets these bozos have put together and conned the pollies with.
Geez You just keep asking them “Will it make the boat go faster “and then get them to explain how.
They cant cause it wont. What the Sir Humphreys need is a big dose of fiscal discipline delivered with a sharp red pencil
Vote:October 8th, 2008 at 2:25 pm
Philu:
“$5 a week for the poorest..
..and $70 a week for the (already) ‘well-off’..
(..um..!..shouldn’t it actually be the other way around.?”
No, it shouldn’t:
Vote:http://homepaddock.wordpress.com/2008/10/07/the-case-for-tax-cuts/
October 8th, 2008 at 2:25 pm
I was pretty poor in my early days, and that extra $5 would have meant a lot back then. Never thought I was owed anything.
Living in England rat poor soon wakes you up to how it is. I remember having to “save up” to buy a light bulb that blew. No light until next payday. In England, in winter, when the heating goes off and the lights go out, it feels like it just dropped 10 extra degrees.
I have never collected any welfare, at first I was proud and young, then I earned too much. The poor aren’t owed because they’re poor. As some one else said, those who have contributed more to the tax grab should be allowed to hold more of their own cash.
Vote:October 8th, 2008 at 2:30 pm
gd, Reading between the lines, I suspect what you are wanting will start to happen during that first meeting of the mandarins foreshadowed in the speech. I expect they will have to endure the same meeting every week for at least the next year.
Vote:October 8th, 2008 at 2:43 pm
“You want an extra $50? Try working a couple of hours a week phule.”
Now you are being silly. People like Philu have “entitlement”. As to his comments of it should be the other way around, typical communist redistribution of wealth. Remember, these are the same ideologues who take the seed grain as well for the greater good. Result = famine. Let’s hope enough New Zealanders wake up and smell the economic roses (and perhpas realise that the colour ain’t red any more).
Vote:October 8th, 2008 at 3:08 pm
David, if you get a chance could you add a column for what Labour would give you by 2011 at the various income levels?
Vote:October 8th, 2008 at 3:16 pm
How very unimpressive.
This country is fucked by bloated bureaucracy and over governance. This time the rapist is using lube, that’s the only difference.
It’s like trying to live with a 5 stone tumour draining the life out of you but knowing that you can’t cut the fucking thing off.
If it wasn’t so hideously amusing I’d probably cry. Well, I might think about it, but only big girls actually cry.
Vote:October 8th, 2008 at 3:17 pm
Don’t be fooled by “philu”, anyone. He is just posing as a beneficiary to wind us up, I don’t believe there ARE any beneficiaries who are regular contributors to blog debate, and certainly none with the internet costs budget that he’s got……..but your internet costs are a legitimate expense, deductible from your real income, aren’t they “philu”?
Vote:October 8th, 2008 at 3:25 pm
Philbest, if you believe that, i’ll believe he’s a National plant trying to turn people against beneficiaries.
Vote:October 8th, 2008 at 3:25 pm
Phule doesnt like a policy that means that people who work hard get to keep more of what they earn.
Big fucking surprise.
Vote:October 8th, 2008 at 3:53 pm
my point was..that as we need kick-starts for our economy..
..that surely that money actually feeding back into the economy..
..is better for that economy..?
..n’est ce pas..?
..(but hey..!..don’t let me interrupt yr little hate-fest..eh..?..)
..phil(whoar.co.nz)
Vote:October 8th, 2008 at 3:57 pm
Er…more money in the pockets of low and middle income workers WILL feed back into the economy.
Duh.
Vote:October 8th, 2008 at 3:58 pm
Economic genius: “kick start” the economy by taking dollars out of it, churning them, and putting between 50 cents and 80 cents back in.
Vote:D’OH!
October 8th, 2008 at 4:02 pm
So where does the Herald get this increase for low income earners with WFF they rave on about? Is that an error?
Vote:October 8th, 2008 at 4:04 pm
I think the Von Mises Institute economists are right. We are facing a moment of truth, whereby it is no longer a case of reducing the size of government as a chosen course of action to help our economy grow, we simply will not be able to AFFORD government at the size it now is, for long. And the longer we defer the tough decisions, the further we fall……..
Vote:October 8th, 2008 at 4:05 pm
phil best..economic genius..
..give more money to the rich..
(thats if they pay any tax anyway..)
..and how many of you clever/rich dickies railing against benificiaries..
..have it ‘arranged’..that you pay no/minimal tax..?
..eh..?
..fucken hypocrites..!
..phil(whoar.co.nz)
Vote:October 8th, 2008 at 4:06 pm
would be good if the table went higher than 100k?
its gonna be a good couple of years for Dime
tax cuts, student loan will be paid off which will free up a tonne of money every month!
fingers crossed this recession doesnt last too long!
Vote:October 8th, 2008 at 4:06 pm
By the way, there is a very interesting comment on a thread on Willem Buiter’s blog, that I came across while following the links from the “NZBC” Q&A article that DPF linked to earlier……
“……I shall let you in on a little secret. Governments and nations throughout the world possess a potent, ready, and simple solution to whatever financial problems they face. Unfortunately, this solution consists in a novelty that is not currently well-understood in the financial community.
However, when conditions move to the extreme and no other solution appears, the allure of novelty becomes ever more formidable.
The novelty begins with a very plain question: what are the financial costs and benefits of Taxation to a nation?
Very few people know the answer to this question because, surprisingly, only several people have bothered to investigate the fundamental matter in the history of civilization.
Briefly, in raising capital for public endeavours, Taxation has no financial benefit for a nation. It does, however, have immense costs that blight its productive power.
So, to put a swift end to the financial crisis, all a nation need do is abolish taxation or, at least, greatly reduce it. With the burden erased or diminished, the productive power unleashed will speedily annihilate any financial misgivings or wounds. The measure will re-invigorate the economy, the wealth of the nation will flourish, and the banks will be deluged with new capital and demands for loans. Governments that take so much and achieve so little will find their insatiable appetite for funds and expenditures unshakeably yoked by the standard of justification.
I am here speaking solely of how a nation raises capital, not how it expends it. I am not calling for the abolition of government. It shall continue to exist and expend, but always by ensuring the benefits of public expenditure surpass its costs.
Adversity can spur us to embrace salutary novelty, if we let it.
The answers are there and always have been. All one has to do is recognize and accept them.
Regards,
Vote:Gary Marshall”
(Posted by: Gary Marshall | September 28th, 2008 at 8:31 am)
October 8th, 2008 at 4:20 pm
so..$47 minus the $32 already promised by labour..
..equals the grand sum of $15 per week..
..in three years..
..(um..!..would ‘underwhelming’..be too harsh..?…)
..phil(whoar.co.nz)
Vote:October 8th, 2008 at 4:29 pm
“philu”, would you rather be poor in North Korea or poor in the USA?
And I suggest that the worst hypocrites are those who make good money not through producing what people want and are prepared to pay for – take Bill Gates, for example – but through political favouritism and leeching. Do all those overpaid bureaucrats who do not actually add anything of value to the economy, not upset you at all? The “cultural sensitivity trainer” in the health system? Or the paid blog trolls?
It is a fact that poorer WORKERS could be paying no tax at all if all the government wastage that has come in since 1999 had not been allowed. This is the norm in most REAL first world countries. Do you know that in the USA, nearly HALF of income earners, the bottom half, pay, on net balance, no tax at all? Do you know that in the US, in 1981, when the highest tax rate on the rich was 70% and the top capital gains tax rate was close to 45%, the richest 1% of Americans paid 17% of total income taxes, but in 2005, with a top income tax rate of 35% and capital gains at 15%, the richest 1% of Americans paid 39%?
Do you realise where your bloody politics of envy gets you? Do you realise that any country with LOWER taxes ends up with MORE rich people? And those rich people pay taxes? Do you not see LACK OF RICH PEOPLE as a problem for a country? If NZ had MORE rich taxpayers, we too could let the bottom 50% or so keep EVERYTHING they earn instead of gouging 25% or so out of them?
Shit, rich people are customers, fa Pete’s sake, the more of them there are, the better anyone’s chance of starting a business? Or the better anyone’s chance of a decent job is? Would you bother to start a business or get a job in Cuba? If you wouldn’t rather be poor in the USA than in Cuba or NZ, hundreds of millions of human beings who want IN to the USA disagree with you. BAH. You’re not worth wasting time on, your humanity is about as valuable as some loyal cog in the Stalin regime or the Mao regime or the Pol Pot regime.
Vote:October 8th, 2008 at 4:38 pm
phil: Labour’s package will mean borrowing for tax cuts. Are you in favour of that?
Vote:October 8th, 2008 at 4:39 pm
“phil best..economic genius..
..give more money to the rich..”
I have nil objection WHATSOEVER to Bill Gates getting some of my money, because he has provided many times more additional value to me, than the little bit I have provided to him in return. THAT, my friend, is the perfect illustration of how the free market works. Neither do I believe that Bill Gates should be penalised by theft of his property by the State because he has become “too rich”; the way in which he has become rich, is by deserving our gratitude, not our spite. I have every objection to money being TAKEN off someone by force to support causes that they find repugnant, or to provide them with “free” services “in return” for a lot more money than far superior services would have cost then to buy. I have every objection to policies that stifle economic growth and keep everybody needlessly poor. I have every objection to ideology that condemns “greed” and makes a fetish out of envy.
Vote:October 8th, 2008 at 4:44 pm
By the way, phool, I still believe that you are the worst kind of hypocrite yourself, claiming to speak for the hard-done-by beneficiary, when you are not one at all and are actually quite well paid, both from political activities and stuff on the side that is best not discussed in public. Still working on your case.
Vote:October 8th, 2008 at 4:48 pm
Adolf in a former life I used to go into companies that were stuffed like our economy is now I got to be known as Dr Death the welder of the financial axe.
But it doesnt have to be brutal I always started off as my usual charming self and stayed that way until the first bullshit grenade was lobbed at me
Then it was all on.
Having dealt in a later and current life with some of these so called manadrins I would offer my services free of charge to unpeal the onion that is their bullshit budgets and waste of taxpayer money.
It can be done Its not a case of cant Its a case of wont
Vote:October 8th, 2008 at 5:15 pm
“..# PhilBest (2947) Vote: Add rating 0 Subtract rating 0 Says:
October 8th, 2008 at 4:44 pm
By the way, phool, I still believe that you are the worst kind of hypocrite yourself, claiming to speak for the hard-done-by beneficiary, when you are not one at all and are actually quite well paid, both from political activities and stuff on the side that is best not discussed in public. Still working on your case…”
your paranoid delusions are getting quite grandoise in nature..
um..!..dpf/other righties have ‘met’ me..
..or..maybe i am/was just a hologram..?
..whoar..!
..phil(whoar.co.nz)
Vote:October 9th, 2008 at 12:15 am
Ad hominem attacks only prove that you cannot muster an intelligent argument. Well, that and the trouble you seem to have with the English language.
Vote:October 9th, 2008 at 1:46 am
What do we want? TAX CUTS!
When do we want them? 1st APRIL 2006
Vote:October 9th, 2008 at 10:48 am
Phil
You say “equals the grand sum of $15 per week” as if you wouldn’t lower yourself to take it (if you worked and so paid instead of consumed tax). Something tells me that you would very much like $15 per week extra in your pocket, guess what, so would I. In fact, I am looking forward to my $70+ per week and thinking of the excellent steak and Shiraz it will buy to go with my new BBQ.
Vote:October 9th, 2008 at 1:11 pm
“um..!..dpf/other righties have ‘met’ me..
..or..maybe i am/was just a hologram..?
..whoar..!
..phil(whoar.co.nz)”
Yeah, of course they’ve met you, but do they know you blog under the name of “Philip Ure”? And what else do you do under that name (quite apart from what you do under your real name)?
Vote: