Working for (other peoples) Families Flawed – Study

[Imported from Whale Oil Beef Hooked on Blogger]

The Government’s flagship Working for Families package could prompt thousands of couples to delay marrying or to lie to authorities to avoid higher tax rates, a study says.

American policy analyst Nick Johnson spent six months examining Working for (Other Peoples) Families.

Now I await Mallards outrage and rant about American acabemics sticking their nose into Labours flagship policies.

Anyway the report says;

  • It [WFOPF] creates higher effective marginal tax rates which would penalise double-income families.
  • Working for (other people) Families, which calculated extra assistance based on the family’s combined income, would double the number of two-parent families facing high effective marginal tax rates.
  • The package also created a “partner penalty”. Some parents would be better off living separately so they could get extra financial assistance based on separate, rather than joint income. The difference could be as high as $6000 year. Couples may delay marriage or choose not to tell Inland Revenue they were living together.

Minister for Smarmy Replies Steve Maharey said “High effective marginal tax rates were not new and were an inevitable consequence of any targeted assistance.”

Basically Labour continues to say “sucks boo to you” to the New Zealand public.


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