Thursday, May 19, 2011

A distorted perspective

One of the problems with discussing tax and inequality in New Zealand is that there is very little public information about income distribution, which leads to some rather weird ideas both about how much people are paid, and what counts as "rich". And those ideas are on display this morning when Jane Clifton complains about the idea of raising taxes:

Ms Clifton says the difficulty for Labour is what the alternative is because the tax increases it's suggesting are aimed at people who are not wealthy in reality.

"It got into trouble when it was in Government for just that reason because what it deemed the wealthy income earners are actually mostly wage slaves like doctors, plumbers, teachers, nurses, police officers and so on," she told Newstalk ZB's Mike Hosking.

(Emphasis added)

While I have no information on plumbers (who are businesses anyway), for the record teachers salaries top out at $71,000 for primary and $69,000 for secondary (with a four-year degree or higher); a registered nurse with five years experience can earn $60,000 plus overtime [PDF], and police salaries start at $51,000 plus benefits. The only people in Clifton's list who might be more than marginally affected by the top tax bracket are doctors (who bloody well ought to be). But that's the sort of distorted perspective you get when you consider yourself middle class (as most kiwis do) despite being hitched to a $250,000 a year plus perks Ministerial salary...

The truth is that higher taxes on the rich will not impact ordinary people like teachers, nurses, or police officers. They would however impact people like Murray McCully, Bill English, and John Key. Which is one reason they're so dead-set against them.