Small tax cuts are better than no tax cuts

June 30th, 2014 at 1:00 pm by David Farrar

Stuff reports:

is downplaying the promise of , signalling that other policy pledges will take priority.

Prime Minister John Key yesterday said no decision has been made on whether the party would campaign on income tax cuts.

The Government returned the books to black in last month’s Budget, leading Key to dangle the prospect of some relief for middle New Zealand.

But as National wrapped up its annual conference in Wellington, he softened his stance.

“In reality we don’t have a lot of money to move on tax,” he said.

“I’m not saying we couldn’t put together a tax package but everyone needs to be realistic about how small that is.

I think it would be very regrettable if National does not offer some tax cuts. They should be the party of low tax.

Of course they would be modest, and not able to occur until 2015/16 at the earliest. But small tax cuts are better than no tax  cuts.

Tax cuts are the only guaranteed way to boost the after tax income of every working New Zealander.

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13 Responses to “Small tax cuts are better than no tax cuts”

  1. The Yellow Dart (4 comments) says:

    The best way for National to provide tax cuts is to leave the rates but move the bands. The current middle personal tax rate is 30% – which is 91% of the top tax rate – and cuts in at a low $48,000.

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  2. dime (9,972 comments) says:

    i heard key this morning.

    he was saying labour were on track to have our debt level at 60% of the economy.. i guess he means gdp?

    national have us at 26%… he wants to be at 20% by 2020.

    got me thinking – great! just in time for labour to come back in an go nuts with poorly conceived spending!

    i think the right should beat labour at their own game. just go nuts with tax cuts etc. who cares about debt. if it doesnt work then the labour that comes in will have to be a 1984 labour to fix us. win/win! all of a sudden the country has lurched to the right :D

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  3. Alan (1,087 comments) says:

    Dangerous ground from Key; National won power on the basis that it was responsible with the public purse.

    We simply can’t have tax cuts with debt so high; let’s get the debt below 10% before we start thinking about spending the surplus.

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  4. Captain Pugwash (98 comments) says:

    I thought the government was borrowing 100’s of millions a week. Surely tax cuts would mean more borrowing? Wouldn’t it be better to keep tax rates the same & repay as much government debt as possible? When I get a pay rise/bonus most of it goes into paying off my mortgage.

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  5. KiwiGreg (3,255 comments) says:

    They should push through a $10k tax free threshold, even if they abate it for higher income earners (they shouldn’t but it’s politics). Such a tax cut “for the poor” will be difficult for labour to reverse. The key is to starve the machine

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  6. Brian Smaller (4,023 comments) says:

    We simply can’t have tax cuts with debt so high; let’s get the debt below 10% before we start thinking about spending the surplus.

    If I had more of my own money returned to me I would be using it to pay down debt. The mortgage wont pay itself off. Meanwhile people like me struggle on while supporting our own families with the added burden of supporting the useless eaters.

    They should push through a $10k tax free threshold, even if they abate it for higher income earners (they shouldn’t but it’s politics). Such a tax cut “for the poor” will be difficult for labour to reverse. The key is to starve the machine

    Then National should change the law to make unions have to extract their own membership dues from members and not have employers do it for them.

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  7. Redbaiter (8,925 comments) says:

    National are just not of the mindset to approve tax cuts .

    That’s the problem.

    They say they believe in a small state and less spending but its all just platitudinous BS.

    Once they’re in power its just the same old socialist shit.

    Borrowing billions to keep an inflated public and welfare sector voting for them.

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  8. KiwiGreg (3,255 comments) says:

    @brian I agree – I don’t know why the Nats don’t try to cut off the oxygen to these folk. It’s like they are playing politics “by the rules” instead of to win.

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  9. Nigel Kearney (1,013 comments) says:

    make unions have to extract their own membership dues

    Not only that, make them subject to the Commerce Commission, the same as any other monopoly. There’s no reason that all the truck drivers in the country should be able to get together and collectively set an asking price for their product when it’s illegal for businesses to do the same.

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  10. GPT1 (2,122 comments) says:

    I would like to see bracket creep addressed. Tax brackets are, by law, adjusted every (say) three years to allow for CPI.

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  11. Redbaiter (8,925 comments) says:

    “We simply can’t have tax cuts with debt so high”

    What socialist boilerplate rubbish.

    Taxes put a brake on the economy.

    Tax cuts take the brakes off.

    Cutting taxes boosts the economy and will allow debt to be paid back quicker.

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  12. eszett (2,409 comments) says:

    Tax cuts are the only guaranteed way to boost the after tax income of every working New Zealander.

    Really, the only guaranteed way?
    Not by lifting the economy and wages, etc?

    Must be election time again.

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  13. SPC (5,619 comments) says:

    Only the Greens are funding their income tax cuts – via a carbon tax.

    redbaiter, if cutting taxes a small amount boosts the economy and thus assists in paying back debt quicker, what would larger tax cuts do, enable us to have zero debt and have a sovereign wealth fund?

    If only, then Bush’s tax cuts would have paid down the American debt by now …

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