Brash resurfaces in the Dominion Post

Following his NZ Herald column calling for a referendum on MMP, Brash now has some column centimetres in the Dominion Post on the tax system. Brash wants a tax system that rewards hard work and he sees the welfare system eating into the gains thanks to Working for Families. This means that if you have three kids and your salary rises from $38,000 to $70,000 you`ll be taxed more and you`ll receive less benefit such as the accommodation supplement. Therefore your marginal tax rate is so high that you will not be much better off.

Although he has a point, once again, he doesn't say what he`ll do differently. Under Labour, a lot of people are getting low wages, as unemployment is also low. Under National in the 19980's there were increasing wages spread around fewer people as there was such high unemployment rate But when unemployment worsened, the Government tried to keep wages down and cut benefits to get more people into employment. That eventually happened - to a great cost - and we have more people working harder for less money as inflation has eaten the increase. Now that inflation is low, spending power is also low as wages are not increasing past the inflation rate.
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Many people are working full time on low wages and crappy jobs and studying part time while juggling work and family as they can't afford to study full time and don't want to get into debt via the student loans system. I know how hard that is - I am doing it too.

Brash asks why you would go to all the effort when all you get out of a $30k pay rise is a marginal 91 percent tax rate? "Where is the incentive?" asks Brash.

He misses the point. People with decent qualifications are likely to get a good job. They are then less likely to be sworn at and abused by bosses. They are more likely to be offered better positions overseas and to have greater job satisfaction. They are more likely to get promoted and get a company car, cutting on travel costs. They are more likely to have employers that respect work/life balance. They are more likely to have generous redundancy packages, employer-funded superannuation schemes and company shares. If you get to be an MP you get free air travel, cheap meals, free taxis, free this- and -that - and if you last a while you get free air travel for life.

What Brash didn't say was that if you are in a low income the best way to increase your income will be to have more kids. But that will increase your expenses too. If you want to take time off when your child is born, you'll have to have an income reduction in the process of getting that income, especially if you don’t qualify for paid parental leave, which is a decrease in itself.

But at the end of the day your income will go up, but your taxes won't. Our overtaxing regime is paying for the Working for Families package. Our tax system is also used purely so that the government can be greedy, collect the interest on the over-taxation of our money (which is millions) and dish out presents in election year.