Tax cuts: Cause and effect

3 月 9, 2022

[Opposition leader] Christopher Luxon’s [proposed] tax cuts, as always, are more popular with voters than tax hikes but there are consequences.

Tax cuts reduce taxpayers’ burden but also increase the nation’s debt.

Basic economic analysis shows that increased government spending is more effective in stimulating the economy than tax cuts.

Also, the impact of tax cuts on infrastructure is that the impact on infrastructure spending takes much longer, even years, to work its way through the economy which was in evidence last time National was in power.

The plus advantage of tax cuts is that they are quick, taxpayers have more money in their pay cheque and companies often invest before the tax cuts take effect.

So there you have it. The jury is out on Chris Luxon’s tax cuts ploy.

Gary Hollis
Mellons Bay

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