Thursday, 18 August 2005

Labour's 0% Tax Pledge discriminates against Singles & Couples without kids

Spend! Spend! Spend! Quickly, before anyone else figures out it's there!!

It's intriguing to see just how many money Labour has managed to "find behind the sofa cushions" since Dr Cullen's Chewing Gum Budget ;-)

Back in May, there was apparently no room for extra spending, but now that we're in election mode, there's billions of dollars spare for items like Free Student Loans, and more Operations.

Now, Labour's announced plans to go even further than the current policy of the ACT Party... apparently slashing the effective PAYE tax rate of people earning under $35,000 a year to 0%.

That's right "at least" 0% apparently (and possible more). Nix. Nada. Not a bean, according to Labour's Family Tax Relief Calculator.

$1.3 billion has been "discovered" for the new policy... However, the catch is, it only applies to people with children... Not for the growing number of single people out there.

According to Labour's calculator, a family with one child earning $35,000 a year would get "tax relief of $7,300 a year by 2007... effectively paying (less than) no tax on their wages/salary.

A single person - or a couple without children - on the same income would pay around $7,245 in direct tax, with little or new relief. Labour's policy would mean the country's single people would be working to subsidise the country's families.

How fair is this? On top of Labour's zero tax plan, many services paid for by the Government out of taxation funds are disproportionately used by families rather than single people or couples without kids (Health, Education, Welfare).

Shouldn't families be expected to make some sort of direct contribution to the Government's coffers, if they want to have the free or subsidised services in return?

I'd be happy for the Government to introduce PAYE tax rates of 0% for the entire population, letting everybody keep everything they earn, and giving them the choice and flexibility to just pay for the services they want and need themselves.

A fair deal for all... not forcing many hundreds of thousands of New Zealanders to totally subsidise the lives of one group.

* Stuff: Labour announces boost in family tax relief

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