You could raise the lowest tax rate, that would be a good thing but it would only effect the people who already pay taxes. Better thing would be to eliminate the GST which would benefit everybody who buys anything. You can pay for it by adding some tiers to the tax system on top.
UBI is a cash injection whether you call it that or not. As I said you could achieve similar outcomes by giving people the essentials for free at least up to some threshold. The government could set up a public utility to provide electricity, bandwidth, water, etc and could provide the first X units for free and charge for the rest at market rates or just provide them at cost plus basis. This would force private companies to compete and lower prices for everybody. Similar things can be done for food or rent.
I can even envision a scenario where the government builds facilities like dormitories where you get a room, a bed, a desk and a shared bathroom. You cram these into buildings and offer them as public housing. People living there don’t pay for electricity or water or sewer or anything. Minimal and basic but free. As you build more you lower the eligibility requirements until one day every citizen can live in a tiny dorm room for free if they want.
Whilst removing GST seems like a good idea on the surface; it does serve some purposes which are not easily replaced.
It captures a bunch of revenue from tourists that otherwise would be harder to capture; tourists see the price and don’t think about the tax that they are contributing to the NZ economy. So tourists in Queenstown are helping to pay for hospitals in Auckland.
It captures some of the proceeds of crime; I know we want to reduce crime as much as possible; it is a fact of life, the GST helps to get some of that money back. It is a bad bargain but is better than nothing.
Adding carve outs in the GST scheme for fresh fruit etc, is a bad idea. In NZ the effective GST rate (15% - admin costs of the system) is something like 14.8% I couldn’t find the article that was from, I read it a few years ago. Compare that to the effective VAT in the UK, which is around 16% when they pay 20% in VAT on most stuff.
There are better ways to capture tourist dollars than GST though. Same goes for proceeds of crime (which isn’t that important because it’s such a tiny portion of the economy).
You can charge more for visas, you can have airport taxes, you can levy a fee on museums, huts, trails and such, you can place taxes on tour operators and guides etc.
You could raise the lowest tax rate, that would be a good thing but it would only effect the people who already pay taxes. Better thing would be to eliminate the GST which would benefit everybody who buys anything. You can pay for it by adding some tiers to the tax system on top.
UBI is a cash injection whether you call it that or not. As I said you could achieve similar outcomes by giving people the essentials for free at least up to some threshold. The government could set up a public utility to provide electricity, bandwidth, water, etc and could provide the first X units for free and charge for the rest at market rates or just provide them at cost plus basis. This would force private companies to compete and lower prices for everybody. Similar things can be done for food or rent.
I can even envision a scenario where the government builds facilities like dormitories where you get a room, a bed, a desk and a shared bathroom. You cram these into buildings and offer them as public housing. People living there don’t pay for electricity or water or sewer or anything. Minimal and basic but free. As you build more you lower the eligibility requirements until one day every citizen can live in a tiny dorm room for free if they want.
Whilst removing GST seems like a good idea on the surface; it does serve some purposes which are not easily replaced.
It captures a bunch of revenue from tourists that otherwise would be harder to capture; tourists see the price and don’t think about the tax that they are contributing to the NZ economy. So tourists in Queenstown are helping to pay for hospitals in Auckland.
It captures some of the proceeds of crime; I know we want to reduce crime as much as possible; it is a fact of life, the GST helps to get some of that money back. It is a bad bargain but is better than nothing.
Adding carve outs in the GST scheme for fresh fruit etc, is a bad idea. In NZ the effective GST rate (15% - admin costs of the system) is something like 14.8% I couldn’t find the article that was from, I read it a few years ago. Compare that to the effective VAT in the UK, which is around 16% when they pay 20% in VAT on most stuff.
There are better ways to capture tourist dollars than GST though. Same goes for proceeds of crime (which isn’t that important because it’s such a tiny portion of the economy).
You can’t let perfect be the enemy of the good.
What ways are effective for capturing tourist dollars?
I agree that GST is a regressive tax that overly targets the lower income earners. But it does serve a purpose
You can charge more for visas, you can have airport taxes, you can levy a fee on museums, huts, trails and such, you can place taxes on tour operators and guides etc.
There are lots of options.