There is still an argument that lower surpluses would have lead to higher growth which would have put us in a better situation.

Or the idea that lower surpluses would have lead to higher private savings.

@FreneticMonkey

No, I’m sure people realise that their taxes are rising. I find it abhorrent because it allows politicians to increase taxes without arguing about it, or debating it, or explaining it. As it isn’t inflation adjusted BOTH SIDES are doing it – and I just find it irritating.

I prefer stability with real wage bills so people aren’t stuck having to make decisions in the face of MORE uncertainty – which is what bracket creep does. It is issues like this that screw up the allocation of resources in society, and lead us to all be a little bit worse off 🙁

you think that voters are not rational enough to calculate the effects of bracket creep and implicitly endorse it as a policy?

I think the media/political/pundit reaction to the delay and now cancellation of the tax cut promises has been pretty positive, National’s current polling suggests that the public endorse this approach.

During the campaign Bill English in the ‘secret tape’ described the voters which National was elected “on the back of” as the ‘Labour plus’. They thought they could get the same level of public services as Labour was providing AND a tax cut. Remember Nationals tax cut package was largely just a deck chairs on the titanic re-arranging of Labours tax cuts.

Except they added that stupid independent earner rebate because manufacturing the headlines for the news coverage of their tax cuts was the most important aspect of it’s construction.

Oh-oh im revealing that i hate democracy just as much as you guys do…..

Looks like we get the government that we deserve huh? and if they cant make everyone happy then at least they can make us all equally unhappy 😉

Do you recall the debate about the so-called ‘surplus’ during 2005?
National spent the boom arguing that Labour should have lower government savings and now they are in power during a recession they want the opposite?

our universal superannuation goes to millionaires and yet it is supported strongly by parties representing over 95% of New Zealanders.

ive said it before and ill say it again means testing is just mean

If WFF was replaced with a universal child benefit it would be untouchable.

If we want a society with a basic level of income then that is great – many economists are actually very pro this type of idea.

However, this is not the type of society that has been elected in – so we can’t really say there is a democratic mandate for it 😉

“Matt democracy means we don’t cut entitlements unless we have explicitly campaigned on doing so.”

I look at it on the otherside – we don’t cut the proportion we spend on entitlements of expected future income.

“I think government does have permission to raise taxes through bracket creep but not through raising tax rates.”

I do not agree here – I find bracket creep abhorrent.

“I would like to see government saving in the good times so that it doesn’t have to cut back in the bad times”

Indeed, if we were just experiencing a cycle. But the government believes national income is PERMANENTLY lower – the permanent bit is important which is why its in capitals 🙂

Permanently lower income means that New Zealander’s have less to spend on government services, or else must sacrifice more to get it.

“I have not seen you argue vigorously for addressing the horrific EMTR faced by beneficiaries.”

I think I’ve mentioned EMTR’s in the past, but indeed I have not discussed them for a while. When I get on to discussing structural issues in the NZ economy (if I ever get time) this is definitely an issue I would raise.

“but you DO want to see those rates cut right?”

Well I don’t want to cut the company rate. With income taxes I would like to see them inflation adjusted, but I think the level of progressivity should be determined in a democratic fashion.

I am more concerned with things like effective capital gains tax and the taxation of different types of income – as these are inefficiencies that are not the result of any social idea of progressivity.

“If New Zealanders are in “tax-cut mode” because they think real spending is too high, and would rather have a government that is a smaller share of GDP, then we should cut taxes”

Indeed – if New Zealand did enter tax cut mode because they thought that they should keep more of their income then that is fine, we shouldn’t betray that. My point here is if society does want to spend less on services and keep more of its income to spend privately, and if this is the “tax-cut mode” Bill English is complaining about, he is the one betraying the democratic mandate given to him.

National was elected on the back of a promise of higher tax cuts. They have reacted to lower national income by getting rid of the (future) tax cuts and not touching (future) spending. I’m not sure if this represents the platform they were elected on the basis of – and recognising that there are two sides here is important.