Thursday 27 May 2010

Paranoia

Come on, guys. Do you really believe that John Key, who gave up a massively well paying banking job to become Prime Minister, really cut the top marginal tax to give himself a pay increase? When he could easily have remained a banker with salary many multiples of his current wage? Or that he nixed the alcohol tax increase because he owns a vineyard? Give your heads a shake.

6 comments:

  1. Indeed. It's making some commentators look pretty stupid. Holding the government to account is important, but this just looks petty.

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  2. Having read a few of Idiot Savant's posts I think he ought to drop the Savant. I'm unashamedly left of centre in my thinking too, but his sort of rubbish gives the rest of us a bad name.

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  3. The idea that he got into politics specifically for financial gain is implausible. But it's not unreasonable that given his enjoyment of the non-pecuniary benefits of being Prime Minister, Key might push along the public's indifference curve to a point which financially benefits him. Or perhaps he might sacrifice a sufficiently small amount of political capital to make a self-interested action worthwhile.

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  4. @Henry: Do you really believe that, or are you making an argument?

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  5. I am too cynical (an attitude which you've helped foster) to believe that politicians (or anyone) ignores personal financial benefits.

    However, the effect is probably quite small. Given the lucrative career Key gave up to merely become an MP, he would likely value a second term as PM very highly. Thus, he would only be inclined to push very slightly to the left of the optimal re-election tax rate. Since tax rates in practice are discretely distributed in jumps of no more than 0.5 (who ever heard of a 33.2078% tax rate?), this would have only made a difference if he was borderline between 33.5% and 33%.

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  6. Personal benefits, sure. But I'm with you that financial benefits for Key are highly unlikely to have been sufficient to have much affected his decisions over tax rates.

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