INDEPENDENT NEWS

Aspirational taxes are the Best Taxes

Published: Wed 10 Sep 2014 12:45 PM
Aspirational taxes are the Best Taxes
New Zealand could have an aspirational tax structure driving wealth creation by 2020.
“New Zealand could have a tax system that underpins wealth creation not wealth destruction,” said Dr. Jamie Whyte, “and it would take only six years to do it.”
“We know that lower tax rates boost economic activity in the economy. Taking more tax out of people pockets to fund the schemes of interest groups and politicians buying votes destroys wealth creation. Lower taxes stops governments going crazy with the taxpayer’s chequebook.”
“A low flatter personal income tax rate rewards hard work. It is efficient and fair for all. Everyone gets to keep much more of their hard won earnings and this increases the incentive to earn more and take on more responsibility.”
ACT will immediately lower the top personal tax rate to 24% and then lower it to a flat tax of 17.5% by 2020.
“ACT would immediately lower the corporate tax rate to 20%, decreasing it to 12.5% by 2020. Combined with regulatory reform this will increase our growth rate from 2% to 4% per annum – doubling our GDP in 15 years.”
Business would have the cash to increase wages. That’s why countries with lower corporate tax rates have higher wages. Each 1% reduction in the company tax rate increases wages by between 0.3% and 0.5%. Companies could invest in capital equipment to raise productivity. That would benefit every New Zealander.
Low corporate taxes would increase job security simply because companies could shore up funds for downturns in their trading cycle. Prosperous growing companies don’t lay off workers. Foreign direct investment in profitable employment rich firms would increase.
“This really could be a wealthy country where everyone benefited from prosperity, where there were well paid jobs and people had hopes of a much brighter future.”
“All we need to do is get the tax monster out of the picture and get the funds back into the productive economy where they belong,” said Dr Whyte.
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