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ACT leader David Seymour says simpler tax system would encourage a culture of success (www.rnz.co.nz)

submitted 1 year ago by Dave@lemmy.nz to c/politics@lemmy.nz

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National campaigned on a proposal to adjust the existing tax thresholds, but as part of coalition negotiations with ACT last year, it agreed to consider whether the "concepts" of ACT's tax policy could be incorporated "subject to no earner being worse off than they would be under National's plan".

In simple terms, ACT would immediately axe the lowest tax threshold of 10.5 percent, meaning the government would collect more revenue from all income earners.

Some of that extra revenue would then be returned to low-and-middle income earners through a targeted tax credit to ensure they were not worse off.

The money left over would allow the government to reduce the higher tax rates at the top of the income scale - dropping the 33 percent rate to 30, and the 39 percent rate to 33

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[–] flambonkscious@sh.itjust.works 0 points 1 year ago (3 children)

So wait a minute, he starts with removing the 10.5% tax rate so those earning stuff all now pay more tax on their meagre takings.

Some of that extra revenue would then be returned to low-and-middle income earners through a targeted tax credit to ensure they were not worse off.

WTF? So he's just stealing it from the poor to give to the middle bracket? What an absolute cunt...

The money left over would allow the government to reduce the higher tax rates at the top of the income scale - dropping the 33 percent rate to 30, and the 39 percent rate to 33.

Oh, and it keeps trickling up? This guy is crazy!

[–] Madrigal@lemmy.world 0 points 1 year ago (2 children)

Nothing new here. This is the party founded by the people who gave us GST.

[–] flambonkscious@sh.itjust.works 0 points 1 year ago (1 children)

I might be a bit smooth in the brain but how is GST a bad thing? To be fair, I've never really considered it...

Doesn't it effectively tax those that use the most? (in a user pays sense)

[–] TagMeInSkipIGotThis@lemmy.nz 1 points 1 year ago* (last edited 1 year ago)

Its a regressive tax, because the greater proportion of your income you spend, the greater proportion of your income ends up taxed. And if you're poor, you spend all of your income (and then some), so all of your income ends up getting hit with a 2nd round of tax via GST.

But if you're rich, you don't have to (hell, at some incomes, can't) spend all your money, so you put that excess money in the bank, then leverage it to buy a house to let to the poor person, who pays your mortgage for you, but you offset your costs to reduce your own tax further, then sell the house a couple years later for some sweet tax free capital gains.

Just an edit to add:

Using GST to dampen consumption by raising it when there's high inflation, and lowering it when there's not could be a useful purpose for it; but its not used that way here. I suspect taxing excess cash out of the economy would be a less awful way than ramping up unemployment through interest rate hikes, but old white people won't vote for tax hikes. GST is also a way to get tax off some people who might not have an income otherwise taxable; but I would think wealth taxes, or capital gains taxes would be far better ways of achieving that.