Tuesday, May 18, 2010



We don't matter

That's the clear message of John Key in saying that we should not be jealous that the rich will get massive tax cuts while everyone else gets crumbs. The rich, apparently, are "core and crucial" to the economy. As for the rest of us, well, we're just dead weight carried by these mighty Atlases of industry.

Bullshit. To point out the obvious, Rob Fyfe (who gets paid $2.5 million) doesn't run Air New Zealand by himself. Other people handle the bookings, load the baggage, care for the passengers, fly the planes, and make sure they don't crash. But these people who do the actual work of running an airline won't be seeing much from John key's tax cut. Instead, the parasite at the top is in line for a cool $120,000 extra a year - far more than any of them are paid.

Pick another business, its the same story. The people who do the real work will get nothing, and will end up paying more in GST to boot. The managers and owners will be rewarded for the work of others. Meanwhile, lawyers and accountants - people who are in a strict economic sense entirely parasitic (just ask Adam Smith) - will get a windfall because they're "crucial" as well.

This isn't a fair tax shift - this is John Key rewarding his mates while shafting everybody else. And rewarding himself too - he'll be getting around $14,000 more from his Parliamentary salary. That's more than many beneficiaries get in a year.

Key's justification is that we need to hand out these enormous tax cuts to the few to ensure they stay in New Zealand. But there are other ways of doing that. If, for example, we are worried about "doctors... scientists... school principals, [and] nurses" - state employees, all - going overseas in search of higher wages, the government could pay them more. If they are concerned about the wider workforce, they could continue Labour's policy of raising the minimum wage and strengthening unions while making strategic pay settlements in the public sector to close the wage gap with Australia. If they want to broadly reduce taxes, they could shift thresholds; introducing a tax-free bracket at the bottom would give a boost to everyone, while raising the top threshold to $100,000 would capture almost all the people Key uses as examples while not giving enormous gains to the rich. But benefiting them isn't the point - they're just the cover. The whole point of the policy is to deliver enormous windfall gains to people at the top, at the expense of everyone else. To deliver an immediate 5% income boost to people like Rob Fyfe, people like John Key. And that money will be taken from everyone else through higher GST.

This isn't necessary, and it isn't fair. Instead it is just greed. National is the party of the greedy ultrarich. And Thursday is the day they deliver to their backers - and rob you to pay for it.