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Thread: No personal tax cuts again?

  1. #1
    MotherBear's Avatar
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    Unhappy No personal tax cuts again?

    On the streets of middle NZ the time for a tax cut is now
    5:00AM Sunday May 13, 2007

    "It would be a hard government," said Benjamin Franklin, "that should tax its people one-tenth part of their income." If the founding father of the new United States had met Dr Michael Cullen, he would have adjudged the Finance Minister, who presents his eighth Budget on Thursday, a very hard man indeed.

    For some time, in the interests of stable economic management, significant changes have been semaphored, if not announced, in advance of Budget night, and simply locked in place when the document is tabled. So it takes no great acumen to predict that this Budget will contain no change to personal tax rates.

    A cut, from 33c to 30c, in the company rate and the likelihood that contributions to the KiwiSaver retirement savings scheme will be made tax-deductible hold out the prospect of some relief. But the Finance Minister, sitting on a larger-than-forecasted Government surplus ($6.5 billion at the end of February), has made it pretty plain that he will be maintaining his policy of not cutting marginal tax rates.

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    Two thoughts:

    1. It's refreshing to see a call for lower- and middle-class tax cuts that are genuinely for lower- and middle-class wage earners. (The definition of 'middle-class' here in the US seems to skew ever and ever higher.)

    2. Why not cut the GST? Perhaps since NZ is so reliant on tourism dollars, a dual system could be instituted--a GST on most products and a second 'rooms and meals' tax (which we have here in New Hampshire) to extract tax dollars from tourists?
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    Looks like that's it then.

    Government says NO to personal tax cuts
    5:00AM Tuesday May 15, 2007
    By Paula Oliver

    Any prospect of a cut in personal income tax rates in Thursday's Budget was emphatically ruled out by Prime Minister Helen Clark yesterday.

    Though it might invite a backlash from voters already turning against Labour in opinion polls, the Budget is unlikely even to foreshadow a personal tax reduction in coming years.

    The earliest a general tax cut might be signalled is in next year's Budget - an election year - and Finance Minister Michael Cullen reiterated yesterday that any cuts then would need to be sensible and affordable.

    Final confirmation that Labour will not deliver personal tax cuts in this Budget came from Helen Clark, who yesterday affirmed signs that have been coming from Dr Cullen.

    "It's been pretty well signalled that people should not expect personal tax cuts in the Budget," the Prime Minister told Newstalk ZB.

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    Tax cuts in first year vows Key
    By TRACY WATKINS - The Dominion Post | Monday, 21 May 2007

    National is promising to cut taxes in its first year in government, after Finance Minister Michael Cullen axed tax changes pencilled in for 2008.

    Dr Cullen said last week any tax cuts next year would fuel an already over-heated economy and put further pressure on mortgage interest rates.

    National leader John Key said yesterday that Dr Cullen has broken his promise - and pledged to cut taxes in National's first Budget.

    National went into the last election promising tax cuts worth $10 billion over three years, ranging in size from $9.62-a-week, for workers earning $30,000, to $92.30 for workers earning $100,000-plus.

    But the size of future tax cuts are being kept under wraps till the election.
    However National is under pressure to explain how it would fund them, after it rolled over on income-related rentals, the first wave of Working for Families, and looks likely to bow to interest-free student loans and KiwiSaver, which is estimated to cost $1 billion-a-year.

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    Mother Bear

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