The CIS continues it good work, with its latest paper being on “Why tax cuts are good for growth“.
Some useful stats:
* The “deadweight loss” to the economy of the extra tax paid since 2000 is estimated to be at least $4 billion.
* Tax and benefit abatements rates combine to give a maximum 91% marginal rate
* Aust tax as % of GDP is 31.6% to our 34.9%
* Weighted OECD average is 31% of GDP
* In 1990 the OECD average corporate rate was 40%. Today it is 28.3%
* The top tax rate in NZ cuts in at just 1.4 times the average wage
* An OECD study estimates every 1% increase in the tax to GDP ratio leads to 0.6% to 0.7% reduction in per capita income.
* Another study found a 10% cut in corporate tax will raise the annual growth rate by 1% to 2%
* One could lower the corporate, top and middle rates to 30% and the lower-middle rate to 18% for just $3.15 billion per annum
Hat Tip: Not PC