Proposed tax cuts

[davereid]

So how is it that New Zealanders working abroad are seen to have higher productivity than local workers?

How hard you work is only one aspect of productivity.

The most important thing is investment.

A country that invests in good roads, good telecommunications etc will be more productive than one with poor infrastructure (like NZ).

And a tax system that rewards investment in your business will result in a better (more productive) business, than one which penalises investment.

The trouble with high-tax economies is really simple.

As a self-employed person I can make a good living. But working twice as hard does not give me twice the reward. In fact, the extra effort returns very little.

So, what do I do ? Well, I play within the rules. So I buy a new ute every year, as I like new cars, and its paid for with pre-tax money. Actually, I would be more productive if I bought a new spectrum analyser. But there is only enough money for one or the other, and if I up production, I will only write myself a provisional tax problem.

Easy decision. Leave production right where it is. Buy a new Ute.

[Usarka]

I still want to know a very simple question .....


Where di dthe whole tax cut idea actually come from ....

did anyone out there actually start voicing for a tax cut or was it actually just the politicians that spoke about a tax cut in the first place

So when we heard about it then we all are expecting it ,When im guessing no one actually wanted one in the first place .

National brought it up [supposedly] because they saw the huge surplus year after year and thought it would make kiwis more productive if they had some of this money back. And by looking at why kiwis are moving overseas and thinking it might be in our best interest to keep the hard workers here.

If you're slaving away for something you slave harder than if you were slaving away for nothing.

The theory that tax cuts will contribute to inflation is bollox. If the government has it they will spend it on shit. If people get it there will be a blip at first, but blips don't mean much. But there will be at least *some* savings, therefore less inflation by giving it back to the people.

Mmmmm tanquery.

[Jantar]

I still want to know a very simple question .....


Where di dthe whole tax cut idea actually come from ....

did anyone out there actually start voicing for a tax cut or was it actually just the politicians that spoke about a tax cut in the first place

So when we heard about it then we all are expecting it ,When im guessing no one actually wanted one in the first place .

Tax cuts have been called for ever since the increased marginal rates of 30 years ago. As for no-one wanting a tax cut? I certainly do.

The trouble with high-tax economies is really simple.

As a self-employed person I can make a good living. But working twice as hard does not give me twice the reward. In fact, the extra effort returns very little. ....

So true. So why are our political leaders so poor at understanding this simple fact?

[Ocean1]

So why are our political leaders so poor at understanding this simple fact?

How could they not?
But their understanding means little, their agenda is getting elected, surely, they benefit from bribing a bare majority, not growing the economy.

[Usarka]

Simple, labour have created a nation of bludgers, civil servants, and PC tree huggers. Thats where their votes are, if they need to lose a couple of "middle class" votes then so be it.

[u4ea]

ok so IF I get a $15 tax cut does that now pay for the registration increase next year??????? ha pharken ha....oh no hangon its to pay for the new BMW fleet for polititians!!!!I knew it was a load of poooop

[davereid]

The theory that tax cuts will contribute to inflation is bollox. If the government has it they will spend it on shit. If people get it there will be a blip at first, but blips don't mean much. But there will be at least *some* savings, therefore less inflation by giving it back to the people.

Yep, Mr. Cullen likes the fantasy that when he spends your money, its less inflationary than when you spend it.

Of course spending has no influence on inflation at all as long as the money was earned in the first place.

Inflation is not a monster that is beyond our understanding. Quite the reverse.

As an economy grows, and business prospers, we reinvest in the products and services we provide. So, over time, in real dollar terms, businesses LOWER costs.

Thats why your new Ford Falcon costs no more in real terms than it did in 1971. But its got 3x the power, the same economy, ABS, traction control, and a radio and heater are standard, not an option !

Thats what a free market will do on its own, over time. We don't call it "deflation". We just experience an increase in our standard of living.

But then, what happens when the Government increases the minimum hourly wage claiming business can afford it ?

There is no more production - just higher costs. So we don't upgrade the product this year, we leave it. Or worse, we put the price up.

So actually, inflation is just the normal reaction of an economy to poor government.