No Right Taxes

No Right Turn has not surprisingly attacked National’s announcement on taxes.

But he has a few things wrong.

1) “as companies pay most of the tax”

The latest budget documents show clearly that corporate tax is only 14% of core crown revenue compared to 46% for personal income tax and 20% for GST (paid by consumers).

2) “will result in cuts to public services”

The January 2004 Crown Accounts show the Government is forecasting a $6 billion surplus this year. Yep that’s right around a $4,000 per family surplus. Now a reduction in company tax rate will cost $510 million according to Treasury so that is less than 15% of the surplus.

Bottom line – it is total crap to scaremonger about cuts to public services. it just means a slightly smaller surplus.

3) The assumption it will mean less tax revenue

It is quite possible that reducing the company tax rate will produce more revenue as it may attract foreign investment into NZ, creating jobs.

So NRT is clearly wrong on (1) and scare mongering on (2). I would welcome a debate on (3).

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