The big kahuna

Dr Gareth Morgan

Gareth Morgan: thinking outside the box again

The Tax Working Group came up with a lot of sensible policies that government paid for, knew had merit, understood were necessary, and totally ignored .

This, from Dr Gareth Morgan, is one of the ideas that came out of it. I’ve contemplated a similar scenario myself, but Gareth has a greater understanding of the sums involved than I do and can therefore propose something practicable.

Here’s the deal

  • You pay every resident adult $10,000 p.a.
  • You scrap all benefits and New Zealand Superannuation along with the expensive and bloated bureaucracy that runs them.
  • Every dollar earned over and above that $10,000 by individuals or by companies is taxed at a 25c flat rate.
  • There will be a shortfall which would be paid for by a 1.5% tax on capital: land, buildings and plant.

What are the advantages?

  • It cuts out a massive bureaucracy. That doesn’t mean job cuts. The people whom we don’t need to run the dysfunctional WINZ and NZ Superannuation systems can be diverted to fixing the broken and under-staffed education, child welfare, police, and health systems.
  • It encourages people to get a job. How radical is that?
  • It’s fair to everybody.
  • It kills Welfare fraud.
  • It makes our unsustainable New Zealand Superannuation scheme redundant.

Our brain-dead political system won’t have the imagination or the courage to adopt this scheme. But that doesn’t make it any-the-less an excellent proposal. See Gareth explaining it here on Campbell Live.

I can’t see any downside to this idea. Can you? I’m open to persuasion.

2 thoughts on “The big kahuna

  1. In another post you (correctly) point out the senselessness of giving a $50,000 grant to Michael Fay’s daughter to make an album. Yet you have no problem with Gareth Morgan’s proposal to pay $10,000 a year to everyone, regardless of their financial situation – and then remove all social security benefits from everyone.

    Somehow I can’t see this fitting with Kiwis’ sense of fair play. It wouldn’t be practical anyway. The smart fat cats would turn their handout into $20,000 or more, while expecting many of today’s welfare beneficiaries to manage their own situation on their handout is unrealistic. There needs to be some form of safety net for those who are too stupid or selfish to help themselves (or their children). 

    The trick is how to prevent this getting out of hand. That, of course, is the trick. But it’s naive for Gareth to assume that everyone in society is as good or responsible a manager as he his

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