Wednesday, March 5, 2008

Letz abolish income tax!

Calm down, PM! I'm not seriously suggesting we do. But the Uk Libertarians say it is feasible.
Tory-aligned blogger Iain Dale, describes the policy as 'pie in the sky.'
Now, the UK Libz say just by reducing government spending back to what it was 5 years ago, so much money can be saved , that income tax could be abolished.
Obviously VAT (GST) at 17.5% and a raft of other taxes means the UK Treasury coffers would still be full.
But it got me thinking. Could New Zealand consider anything similar? Extra billions pumped in public services seem to have delivered nothing in terms of better healthcare, education, etc, etc.
How much scope is there for a radical overhaul of our tax structure?
Perhaps this is a task for Peter Cresswell and others to consider. How detailed are the NZ Libz with their policy prescriptions? Or is abolishing income tax 'pie in the sky' here too? Does ACT offer anything here?


scrubone said...

I think DPF pointed out that this was possible here a few weeks ago. Given the massive increases in spending, it's more than likely.

ZenTiger said...

It's very possible. The concept is just too scary for socialists.

It also wipes out a whole raft of complex tax law, and there's not much point in trying to evade the left-over taxes, which can be more carefully audited for compliance.

As mentioned, you could just rely on GST and a few sundry taxes (petrol etc).

The fairtax movement in the USA has some good analysis, and suggests a GST of approx 20% with a tax credit every month (say $250) per person to offset GST on the first 12K or so to cover food and essentials.

It would be worth a serious look.