There was an interesting article in the Herald yesterday showing that majority of people are unhappy with the tax changes.
A nationwide HorizonPoll survey of 1558 people between November 16 and 19 found 8.2 per cent felt better off because of the changes, 53.5 per cent thought they were worse off while 35.6 per cent felt their situation was unchanged.
Of lower income households, 71.5 per cent earning less than $20,000 a year felt worse off while 60 per cent of those earning between $20,000 and $30,000 felt the same.
Among households earning between $100,001 and $150,000, 39.3 per cent a year felt worse off (19.6 per cent better off) and 53.2 per cent of those in households with incomes of $200,000 plus felt worse off (24.6 per cent better off).
Of households earning $30,000 to $50,000, 5.5 per cent felt better off, 54.3 per cent worse off.
Among middle-income households earning $50,001 to $70,000 a year, 11 per cent felt better off, 45.9 per cent worse off.
A further poll on the Herald website shows that the split is more 50/50 than the Horizon Poll and at the time of writing had 12,000 votes.
I find these results surprising as the middle classes would be significantly better off under the tax realignment. How much you are better off, depends on what percentage of your income you spend of course, and an earlier survey showed most people were using their extra money to pay off debt. That being the case they would be better off after the changes.
Perhaps the poll results show a perception problem for the Government, that the increase in GST attracted more headlines than the decrease in PAYE, or perhaps the left did a good job in convincing workers that the tax cuts benefited the rich.
Personally I think the move was in the right direction, although the timing of the GST increase hits hard especially at the petrol pump where prices had only recently increased due to the carbon tax. In a recession perhaps putting a greater price on spending is the way to help realign Kiwis behavior.