CTU Economic Bulletin
Is the recession over? We're on the way, many economists say. The government gives mixed messages - John Key emphasises things are improving; Bill English that the economy is still fragile.
The Tax Working Group (TWG) report which was made public this month has been widely discussed. There are some positive aspects of its recommendations, and some disappointments.
To begin with the disappointments: it limited its view of the taxation system largely to its revenue gathering purpose. Yet there are other purposes for the taxation system, notably to redistribute income in an unequal society. Given the substantial rise in inequality and poverty in New Zealand, particularly over the 1980's and 90's, this review was an ideal opportunity to look for ways to use the taxation system for this important social purpose - what is called a progressive tax system.