English on tax cuts

No Right Turn is upset that Bill English has said he would like to see large numbers paying a top tax rate of no more than 20%. I’m delighted. It should be noted this is an aspiration, not a detailed policy, but good to see the heart is in the right place.

Of course the left are already claiming such a policy could costs $3 billion a year and that this would mean massive just massive spending cuts. Well sure if you ignore the huge surpluses we have running at twice that level. Also if you ignore the $26 billion of contignency spending over the next four years.

Now NRT points out 70% of people already pay less than 20%, as 70% earn less than $40,000. This is correct but somewhat misleading as the data includes everyone over 15 years old. So it includes those at school or uni, those on benefits and those retired.

If you look at families, and how many families have someone eanring over $38,000 – I would say it is well over half. So raising the threshold for the 33c rate from $38,000 would benefit a lot of families. The average income for a full-time earner is $46,002.

Remember in Australia, Peter Costello has lowered the tax on someone earning $50,000 by 32%.