Thursday, May 20, 2010

Who benefits from National's tax cuts?

So, who benefits from National's budget for the rich? As usual, I've done the numbers. And the results are completely unsurprising:


(Methodology: This calculation is for the total package. Effects are calculated from Treasury's 2010 detailed model data, percentages and numbers of taxpayers from Budget 2010 Who pays income tax and how much?. Due to a lack of information on projected income distribution, I've been forced to use the bands from the latter).

Not on the table: those earning over $150,000, the top 2%, pocket $430 million, about 11.5% of the total. This is almost exactly the amount the government has to borrow to fund this package. The people of New Zealand will be saddled with further debt to pay for the greed of the few at the top.

Also not on the table: the effects of increased GST. This will effectively claw back everything gained by those earning under $20,000, and most of what is gained by those earning under $70,000. Only the rich will be better off. And that's without even getting into the effects of higher ACC charges or reduced government services.

Basically, the vast majority of New Zealanders have just been screwed over for the benefit of a tiny percentage of parasites at the top. John Key is right - we shouldn't be envious: we should be angry.