Proposing a Single 10% Tax Rate: An Economic Perspective

To the members of parliament

I am writing to you in regards towards the current tax rates and the amount of tax that taxpayers pay. I firmly believe that we are being oppressed by the outrageous tax rates that we are living by, when someone has finally accumulated enough income to move up a tax rate, the higher tax rate could possibly subtract enough money to return them to their previous tax rate and position in societies high rackey. I propose that a substitute for the current tax system be made so that instead of multiple tax rates we have a single tax rate of 10%. This would benefit the economy because, it would increase the income of households and increase their savings, it would increase their consumer spending and the amount of GST

With the increase of their kept income it would also increase both their savings and consumer spending. For less financial families and people the increase in savings would help them to improve their lifestyle and solve their financial problems. If these people can improve their own lifestyle, and solve their own financial problems then the government will not have to spend as much resources assisting them. This would also mean that those with a substantially high income would keep 90% of their income which is 20% more tax than what the current tax system.

Another way a tax rate of 10% would benefit us is that it would increase the consumer spending. With the increased amount of kept income they can save and spend more, for example if someone has a monthly income of $15,000, with the current tax rate they would pay $2,625. But with the tax system I propose they would pay $1,500, that leaves them with $1,125 added to their income, with this they could save all of it, save some of it or spend all of it, so in most of these cases the government will receive more indirect

For example with less funding they can not build new schools in rural areas so the people of that rural area will be less educated and non-literate or with less funding they can not build new roads so there will be a large amount of traffic jams on existing roads.

Another issue with this alternate tax system is that it creates imbalance. As people would keep 90% of their income, it means that the wealthy who have a substantially high income will just keep on becoming wealthier and wealthier as there is no higher tax rate for them, like how people with an income of over $70,000 are taxed by 33% to equalise them to people who pay 10.5% tax due to their lower income of $0-$14,000.

To conclude although it leaves the government with less funding and the wealthy only getting wealthier, the economy is far better of with this alternate tax system as they keep 90% of their income, it increases their savings and consumer spending, and it aids the homeless and unemployed to become self reliant for their basic needs. If we do put this tax system into use we will see New Zealand turn into a utopia, an economy based on paradise.

Yours faithfully

Richard