So, us New Zealander’s are switching some income tax to consumption tax. Good for us. In order to think about whether this is a good thing we need to discuss costs and benefits. It turns out this switch is also a “transfer” of resources between two groups, relatively speaking. These groups are people that HAVE […]
A famous quote from Keynes: When the facts change, I change my mind. What do you do, sir? This is what John Key really needs to say about the “revelation” that he wouldn’t increase GST in 2008. John Key now knows that increasing GST and reducing income tax is seen as a way to improve […]
There is a feeling out there that the increase in GST would be pointless if completely compensated. I’m not sure I agree. Even with a fully compensated scheme, and even given some welfare costs, there are reasons why we may want to shift the burden from income to consumption: Consumption tax is easier to enforce […]
Following recent events it is obvious that New Zealand will do a “compensated shift” of the tax system away from income tax and towards consumption tax – removing a “flat component” of income tax and replacing it with a flat income tax. Lovely. However, when we think about the happiness and general welfare of society […]
When discussing the upcoming changes to the New Zealand tax system the National party has made it clear that they want any change in GST to be “compensated”, so that those on low income aren’t “worse off”. Now this is actually a wildly complicated question. Any change will create winners and losers, that is undeniable. […]
In a chart on the Rates Blog today they point out that the money stock (note not really the money supply, depending on how you define it) in the Euro Zone is declining. The indication then is that “Europe looks bad”. However, the money stock is also dropping in Australia and New Zealand. If there […]