National released its tax cut policy [PDF] today, and as predicted, they massively favour the rich, cutting the top and middle rates and shifting thresholds while delivering absolutely nothing to those on the bottom. In fact, the raw changes alone did very little for National's vaunted "middle income earners" either, so they have had to introduce an "independent earner rebate" for those not receiving Working For Families to prop up the figures. But even with that, its very clear who will benefit:
(Methodology: This calculation is for the total package. Effects are calculated from Treasury's 2008 detailed model data, percentages and numbers of taxpayers from Budget 2008 Who pays income tax and how much?. The value of the "independent earner rebate" is estimated; there are about 700,000 taxpayers in the eligible range, and National estimates half are eligible. Charitably, I've assigned the entire benefit to the 20K - 40K income band, though some recipients will be in the 40K - 70K band).
Make no mistakes: this scheme is designed to pander almost exclusively to the rich, with any benefit to anybody else as an afterthought. In their first tranch, around 60% of taxpayers - everyone earning under 20,000, and around half of those in the 24 - 40,000 range - get exactly nothing, while those on high incomes get large rewards. While Labour's tax cuts were irresponsible, they were at least equitable, with the benefits distributed widely. National's plan doesn't even have that going for it; instead, they're just looting the state for the benefit of their rich mates, and driving us into debt and cancelling social services in order to do it.
