It’s tax freedom day

Today is tax freedom day . Business Round Table executive director says it’s five days earlier earlier than last year and one earlier than the year before:

Mr Kerr said Tax Freedom Day represents the notional day in the year when the average New Zealander stops working for the government and starts working for themselves.

The calculation was based on central government core expenditure, which was forecast to be 33.4% of gross domestic product (GDP) in the government’s December 2010 Half Year Economic and Fiscal Update.

“The average New Zealander effectively spends one third of the year working for central government,” Mr Kerr said.

Tax ‘freedom’ actually came a little bit earlier this year than in the last couple of years: Tax Freedom Day in 2009 and 2010 fell on May 4 and 8 respectively, according to revised data.

I’d give that an improving but must do better, especially when local body rates are taken into account.

Mr Kerr said a number of fast-growing Asian and other countries have levels of government spending, and hence tax burdens, that are well below the OECD average.

“While soundly based government spending on public goods and a safety net is justified, economic research suggests that beyond a certain point government spending and taxation are harmful to economic growth.

The line between enough tax to provide for public good and a safety net and so much it harms economic growth isn’t easily drawn.

But lower tax rates can result in higher tax takes from a growing economy.

One Response to It’s tax freedom day

  1. Sinner says:

    The line between enough tax to provide for public good and a safety net and so much it harms economic growth isn’t easily drawn.

    Of course it is. Taxes should never be spent on things that can only be justifed as “the public good” and especially never ever as a “safety net”.

    Want to stop NZ borrowing this month? Just this month?
    Then you need to stop spending on health, welfare, education & super

    That’s how bad the NZ economy is: we had to borrow the entire welfare spend this month!

    Like

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