Flat-tax ‘ideas’ a warning

by Jake Quinn

Flat tax has yet again been touted as the path to glory by the country’s “economic policy advisors” at the Treasury.

John Key has “ruled it out“. Kind of like he ruled out cancelling their 2009 tax cuts, and how he and Bill keep rulling out a capital gains tax.

But hang on, they did cancel their 2009 tax cuts and its looking increasingly likely that a raise in GST to 15% and some kind of capital gains tax or lands tax might well be introduced in order to fund dropping the top rate of tax to 30% (which is National’s medium term goal).

And now my brain hurts.  In politics speak, does “ruling something out” really mean that it’s ruled out or does it simply mean “we are running it up the flagpole for a bit of free focus-grouping and to start getting people used to the idea”?

Perhaps we must demand a “no ifs, no buts, no maybes” promise over this one?

Meanwhile, Labour opposes flat tax: “Labour deputy leader Annette King said her party was opposed to a flat tax because it raised questions about what other taxes would have to be raised to cover expenses.”

Is that really Labour’s key line on flat tax or is just what NZPA chose to run? 

No Right Turn’s reaction is apt: “If you like, you can imagine me theatrically examining the statement to see whether there is anything more, but it doesn’t work very well with a computer screen”

Annette does, however, rightly ask: “Why are they wasting taxpayers’ money with Treasury officers working away on policies they don’t intend to implement and they rule out every time they are announced?”

It’s not that Treasury is working on unlikely-to-ever-be-implemented policy ideas, because that’s OK – it’s partly the job of government policy advisers to do such things.

The point that should concern us, however, is the frequency with which Treasury, the tax working group and others central to advising the government, are announcing these “ideas”.  

It’s a warning.  We are being warmed up, cajoled if you like.