I always thought the welfare is to help those who are unable to earn for a living.

What is wrong with inequalities? It is natural.
Soviets tried to remove inequalities and we know how it ended.

I love your last line, tax cuts create perverts, nice.

LOL.

Ideologically opposed to a reduced role for the state me thinks.

I date the shift slightly earlier to aspects of the Washington Consensus (that is, from the 1970s), but there is, I believe, no doubt that Mr Reagan contributed significantly ideologically to this outcome. The problem for a social democrcat like me is that SD (or purportedly SD) governments did not attack that view; rather in general they bought into it..

Seems to me that the Wests debt problem began in the 1980s when Reagan pronounced the evil of taxation and government spending versus the purity and idealism of private consumption.
The result of his tax cuts was to create both public as well as private debt. I’m no behavioural expert, but my guess would that tax policy has a bigger pyschological than fiscal effect since the money not spent by the government is compensated by private consumption, whereas debt levels can be a result of personal choice

Is education a vital government function?

The most important government function.

We should have a tax system that takes just enough to support vital government functions and that constantly looks for ways of reducing those functions and therefore those taxes.

Is education a vital government function?

We should ideally have a tax structure that maximises economic growth, and then use the welfare system to deal with inequalities that need addressing.

Where does the government get the money for welfare, if not from the tax structure?

The issue is what kind of fiscal settings will give us the best chance of growing the economy faster- and in a sustained way.

In terms of the effect of taxes, there is certainly a lot of work being done by the likes of Gemmel and Arin that show that taxes do matter for growth. The interesting thing about such research is that it shows that different taxes matter differently- cutting an indirect tax is not the same as cutting say, an income tax. But the tax settings do tend to matter. If we want to achieve a higher growth rate, then taxes will be one policy instrument that will be relevant. And that means tax cuts.

Getting back to the NZ experiment, I am astonished that Robert has the chutzpah to presume what I have read. That has the uncomfortable aroma of zealotry.

The information we have on productivity statistics generated by the NZ Dept of Statistics are as follws:
In the 1990-97 cycle, mulitfactor productivity grew 2% pa
In the 2000+ cycle, multifactor productivity grew 0.4% pa.

“Do I take it that you are follower of neo-socialism Komrade Winter?

As for your pooh poohing of the tax working groups recommendations while crying that NZ’s productivity performance is sub-par, erm, is your solution more social welfare and higher taxes?

What I just don’t get is a bunch of ‘neo-socialist’ lefties running interference on any type of modernisation of NZ’s nearly bankrupt welfare state economy regurgitating adhom attack lines such as ” ‘neo-lib’ infidel running dogs”.”

Yep, a social democrat who sees other social democracies doing as well as, if not better than, neo-liberal-run economies, who was talking about the Brash group on productivity (not the tax group, though its suggestions are predictable) and said nothing at all about running dogs, was not in any way ‘ad hominem’ and is simply reminding us that we had one of the most comprehensive neo-liberal models in place for 15 years and it failed to produce the economic turnaround that it touted.

My point is simple. Reducing taxes and state expenditures does not automatically create improved productivity and growth. For example (and it is simply one illustration), given NZ’s poor private sector R&D performance, reduced government expenditure in R&D would have serious adverse effects on our economic perfromance. Reduced taxation leading to consumption behaviours that do not promote saving or productive investment might well have adverse long term effects. And so it goes. The silver bullet brigade in economic policy is always shown to be wrong. So it is with the simplistic ‘cut taxes and government expenditure’ tradition.

No it didn’t!

To have “lost” something first you have to own it.

We should ideally have a tax structure that maximises economic growth, and then use the welfare system to deal with inequalities that need addressing.

NO!!!

We should have a tax system that takes just enough to support vital government functions and that constantly looks for ways of reducing those functions and therefore those taxes.

ANY other tax system inhibits economic growth.

Hand the money back to the parents to spend on their children’s education

Introduce compulsory health insurance

Make kiwi saver compulsory

Each one of these can be done as a tax cut although at first it would appear to be a transfer of responsibility from the stage to the individual but as efficiencies set in as the business changes from public to private sector the costs would come down and the tax cuts would become more apparent.

John Key is a coward who is more about appearance then action. Their only plan is to dig up oil and gold to sell so they can still keep the public sector unchanged and everyone happy.

“@Chthoniid: you must be relying on Evans, Grimes etc, and not Treasury, OECD, Dalziel or the WPWG data, all of which show our productivity performance to be poor, even under the ECA (for those who love neo-liberalism)”

Do I take it that you are follower of neo-socialism Komrade Winter?

As for your pooh poohing of the tax working groups recommendations while crying that NZ’s productivity performance is sub-par, erm, is your solution more social welfare and higher taxes?

What I just don’t get is a bunch of ‘neo-socialist’ lefties running interference on any type of modernisation of NZ’s nearly bankrupt welfare state economy regurgitating adhom attack lines such as ” ‘neo-lib’ infidel running dogs”.

Where do you think the money is coming from to pay for your socialist utopia, EPMU union fees?