Thursday, May 20, 2010

A budget for the rich

National is a party with one idea: cut taxes for the rich, and dump them on the poor. Today, faced with trying to restore the government's books to surplus after the worst recession in decades, they responded by... cutting taxes for the rich and dumping them on the poor. Sure, they've cut middle rates too, but that's all eaten up by increased GST; meanwhile, the rich get to laugh all the way to the bank with an enormous cut to the top rate.

The tax cuts are expected to cost $3.7 billion a year. Those earning over $70,000 will get $1.625 billion of that, or 44%. Within that group, those earning over $150,000 (the top 2% of income earners) will get $430 million, or 12% of the total. Meanwhile, the GST increases and twiddles to depreciation don't fully compensate for the cost, so the government will be borrowing an extra $400 million, dumping it on taxpayers and giving the money straight to the rich. This is neither fair nor sensible. Instead, it is pure greed, a looting of the state by National for its rich mates.