What you are saying (taking and recycling) might not necessarily stack-up with modern automated technology, Mike(#16)?

I am collecting my thoughts for advocacy for a return to progressive-marginal, personal income tax rates. When Muldoon introduced National Superannuation there was not a problem with it being universal, because the top marginal income tax rate was 66 cents per dollar and the universal NatSup increased taxable income - progressively, if you were a high earner you paid most of it back, and now, with Roger Douglas's GST another 12.5 cents/$ would go back that way.

When Phil Goff, prior to gaining good, consolidated support from Labour's caucus, mooted something akin to the redundancy payments which occured during the last major recession before being negotiated away as a consequence of National's Employment Contracts Act he was shot down in flames - welfare for the partners of millionaires. Goff actually had a very valid proposal. For a start, the genuine partners of millionaires would seldom be in the workforce, anyway. Is Mrs John Key? And Phil said his partner had opted to stop work because he earned sufficient, and yet he is understood not to be a millionaire.

Why should someone who has independently progressed through their education and career and is sharing part of his/her life for the sake of some mutuality all of a sudden be traumatised by total loss of independence solely due to some assessments concerning a cohabitating partner? National understood the issue, and somewhere I picked up about a suggestion that they raise the arbitrary partner's-earnings cut-off point. Goff was hesitant to suggest a cut-off. Under the Muldoon system it would not have mattered. If the millionaire's partner was working he would just be getting a bit of his tax back if she received income support when she was made redundant and traumatically lost her independent income.

Your point, Mike(#16), also fails due to the fact that we are not doing a lot of the things with our own money that we absolutely must do, and we are also creating insidiously toxic inequalities. An open and well-monitered state machine is able to make correction as it does the recycling.

We should be paying high taxes because:-

* We have a lot of debt to be repaid, much of which is public, but substantially it is private debt - taxes are able to discourage leveraged borrowing and further big-spending.

* We have to avoid a rapid escalation of debt - households have cut back on spending, but the government is rapidly putting us into hock.

* The income gap is intolerably disproportionate, and in itself facilitates an unaffordable consumerism and inefficiencies in production. Without the extreme income gap, an increase in GST might be fair. Adjustment transfers to low income earners are not relevant, as the toxic social inequalities continue to be exacerbated.

* We are not saving adequately and taxes facilitate credits to such tools as personalised KiwiSaver accounts and the NZ Superannuation Fund. A high marginal income tax system is able to build-in overt incentives to save and invest and manage resources and consequently discourage consumerism.

* New Zealand's counterpart debtor nations have the same problems to solve. Australia is not nearly as indebted as a nation, but there is high corporate debt and it does seek higher savings ratios. There should be some concurrence between debtor nations, so that higher taxation to solve chronic indebtedness minimises an imbalance of human resources.

I realise my comments are off-the-cuff and I leave myself wide-open to a bombardment - but that's blogging for you, isn't it?

The issue of WFF being a necessary assistance for some is not debatable; the question of whether WFF is the best means of providing that assistance is.

Taking tax from the earner's pay and then cycling it back to that same earner obviously has a cost - this cost could be avoided entirely by simply leaving the income in the earner's hands in the first place.

Adjust the taxation level appropriately, remove WFF entirely and reduce the non-productive bureaucracy to a more realistic level.

It is every citizens right to minimise their taxes. Governments have developed the habit of wasting hard earned taxpayer dollars, why would you want to give them any more than you have to? I'd sooner write a cheque out to a well run charity (and get the tax deduction!).

Re Peter #11, We too use our WFF to afford our children a parent at home.

We would get the same amount of WFF regardless of our LAQC losses so why just because we have an LAQC does this make us dishonest?

Working For Family was never about buying votes - it was about raising the level for all those hard working people, with families, on low incomes. Imagine if this country had no WFF or Social Welfare safety net, this nation would be a basket case with rampant poverty. I wonder what #2 and #3 would do if beggars came to their doors demanding charity - whinge at politicans to do something to address the issue.

It is easy to make ill-informed and disparaging comments from positions of privilege, eh #2 and #3. Business people running this country ... bah humbug. Did not anyone tell you, this current recession is due to capitalism failing.

# Peter, couldnt agree more

WFF has worked well for us.The extra money is being spent on our son allowing a parent to stay at home to see to his needs properly.This will (hopefully) ensure that he doesn't become a pain to society in the future.Of course some people will try & rip the system off, nothing new there,it's part of human nature unfortunately.

Also part of human nature is nasty little selfish right wing nazi's who have no compassion for their fellow man/woman

Life goes on.

Well, it looks as though Ian McKinnon(#2) and Fred(#3) are recommending that John Key be sacked because basically the Prime Minister agrees with the scheme. Of course, he has just had a beer with Vice Chancellor Steve Maharey who considers Working-for-Families to be the foremost achievement of his time to date in politics.

I am quite sure that both the Prime Minister and the Finance Minister realise that, as the new government, if Working-for-Families had not been in-place/up-and-running when so many families are affected by the recession and rising food prices, their job to contain public discontent would have been a lot more difficult. It is the one thing that has helped spread the burden as National has had a paucity of ideas of its own, and has foresaken the necessary revenues to do anything by giving year-on-year April 1 tax cuts to the big foreign currency spenders, and has locked itself into an untimely "lower tax on high incomes" philosophy.

Actually, I have to say that I like Prime Minister John Key's response, or at least I am reading a bit of hope into it. The Opposition had better get its thinking cap on, because it has to be a jump ahead on this one (taxation reform) and it will not be able to afford to miss a trick - it had better know what it wants, and for whom it wants it.

I regret Mr John Bongard's bad health. In 36 years going from the new boy to CEO of one of New Zealand's major manufacturers he must have made interesting observations regarding the ever-increasing income gap. The boss used to get 20% more and the big-boss 10X more. Now the boss gets 2X and and the big-boss 100X as much. I am able to appreciate the arguments of some academics (not NZ) who maintain that these inequalities (and actually, inefficiencies) are fundamental to major socio-economic problems.

I regard that across the deficit nations it is imperative that this imbalance be addressed, and the taxation regime is the most important tool. I am watching out for concurring thoughts.

Delwyn(#5) has pointed out that there might be a flaw in the points put by this article. The MSM do gain their own mindsets and they then fail to give balanced reporting, but push their own barrow, as it were. Rather than being "targeted taxation relief", the MSM have always considered WFF to be a welfare benefit.

Other examples of this "obsessive" activity by the MSM are 1)the way it hyped-up Don Brash's playing the race card until the hysteria subsided and 2)the way it gave the impression Dr Cullen was "stealing" taxpayer's money by not giving tax cuts and boycotted economic professionalism.

The Prime Minister has been rational - very rational. Without looking at it too closely, I suggest that the family mentioned above might well have gained their $10,000 from conventional across the board tax cuts if there had not been a targeted taxation regime. That family positioned itself for the targeted taxation relief - not for a welfare rip-off, because WFF is not "welfare" (I would argue with the MSM).

I also think we have to be careful to distinguiah wealth, and possibly good stewardship of resources, from the very different issue of manifold high income.

Totally Agree with you Angie #4 (and Andy #6). I have used WFF when off on maternity leave for a year, it was a lifesaver. Thanks Labour. Angers me that dishonest and greedy people are taking advantage......again.

This is a brilliant quote from Bill English: 'People spend a lot of time organising their affairs' around the different income, company and trust tax rates.

He would know, wouldn't he?