Wednesday, April 30, 2008

No sign of 'freedom' for Kiwi taxpayers, yet!


Roger Kerr has assessed the day when we stop working for the taxman.
Apparantly, it was yesterday, April 29.
But if we include local government, then we will be working for the taxman until June 4.
Mr Kerr looks at central government spending, which amounts to a third of the economy, and if we include local government, the share devoted to the public sector, as measured by the OECD is now 42.4%, larger than most of our economic competitors, particularly the US and Australia and the UK.
As the NZ economy grew in the 1990s, extra government revenues pushed Tax Freedom Day forward to reach April 10 by 2001, but afterwards Liarbour ratcheted government spending so much, we need to work an extra 19 days to fund Cullen's spending.
The Business Roundtable expects the trend to continue, with us having to work a couple more days over the next few years.
And indeed, chartered accountants Staples Rodway last year noted some worrying trends for New Zealand as we go backwards, compared to Australia, where Tax Freedom Day falls a month earlier than us, based on the wider measure including local government.
Otherwise, based on central government spending, Tax Freedom Day for Australia fell last week.
Of course, why should this matter?
Well, do we want to spend nearly half our time working for the taxman, or have one partner in each couple doing so.
And if you get to earn the fruts of your labour so much sooner in Australia, then a jump over the Tasman, might be just too tempting.
Furthermore, countries where the state takes over 40% of a country's wealth for itself are not known for economic growth.
Hat tip: Not PC.

2 comments:

mawm said...

What you have not highlighted is that the more you earn, the more days you work for the government.

I'm not sure of the figures, but if you are on a marginal rate of 40%, living in an expensive suburb and with GST included you will probably work until the begining of September JUST TO PAY YOUR TAXES.

The 'freedom' day you quote will be an average for all NZer's.

Clunking Fist said...

It's a milder form of slavery