Taxes and the inefficiencies of government

Mike Hosking reminds us that we’re only seeing the start of a never-ending assault on our money through more and more taxes now that Labour is calling the shots.

So as we end the first week of this new government, or perhaps to be more accurate the first day given they only got sworn in yesterday.

The outrage over their first move, the petrol tax, is a good indication of what we are in for over the next three years.

According to the Herald, some people are going to leave Auckland because of the tax. No, they are not. If you leave Auckland, you were leaving anyway. No one packs up, drags their kids out of school, puts the house on the market, and upends their life because of a petrol tax.

Equally, all those who argue they’re going to drive to the borders and get cheap fuel are making it up as well. No one drives 50km and burns gas to save pocket change.

But as nutty as all of that is, the real problem here is the fundamental flaw in the economics that is driving it.

You can’t bump the minimum wage telling us that 16 bucks is not enough to live on and then hit us with a car tax. There is no point in making life cheaper one day and more expensive the next.

And do note the moving language from the government around this tax. It’s not 10 cents a litre – it might be 10 cents, it might be more. And as sure as night follows day, whatever it starts at, it won’t end at. Tax is a slippery slope, especially with governments that love tax.

And then you get the precedent: this is triggered by councils asking for a tax. The government says “well, we’ll only do it if the council asks”. And before Phil Twyford is finished uttering the sentence, Phil Goff is going “yes please”.

And you think that other councils aren’t looking at this going ‘well hold on, we have a whole bunch of transport issues we need to tackle, we’ll take that petrol tax too thank you’?

For every time a government gives and takes away in terms of tax and income, it double-handles money. With that double handling comes the inefficiencies of the state. The more money is handled, the more it costs and the more you lose.

Government knows better than parents, and all your hard work generating money is just to be taken by the state to ensure it is spent more responsibly than you would.

If you thought New Zealand was a socialist country under John Key, you ain’t seen nothing yet.


– Newstalk ZB

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