Quote of the day:
What this Government did was lower the effective marginal tax rates. In fact, if you want to discourage people from being in the labour markets, the very biggest thing you can do is keep raising taxes and raising those effective rates. When you lose 100 percent of every extra dollar you earn, why on earth would people bother trying to earn more money? John Key.
Governments need money to operate and provide public services and infrastructure.
There is debate on how much they should do and how much they need to do it.
But increasing taxes on the wealthy as the left wants to do is dog-whistle politics based on ignorance and envy.
Increasing tax rates doesn’t necessarily increase the tax take.
When taxes get high enough to make working more not worth the effort, productivity drops and the tax take drops with it.
If Fonterra is able to deliver the extra 30 cents in the forecast payout it announced yesterday, that will do far more to increase the tax take than increasing tax rates.