Mike's Minute: Tax cuts can make some good economic sense

The critical part missed yesterday in the great National tax scandal debate is not whether tax cuts are inflationary; it's the right of people to hold onto their money.You can also add it was a storm in a tea cup, given it's not election year. Until it is, opposition parties shouldn't really be in the business of announcing policy because not all of us are engaged.So, here’s some simple economics on tax. If you cut tax is all that money spent? No. A lot of it is saved.If it's taxed and taken by the Government is it spent? Yes. We know this because the Government has spent every cent it’s got and then billions more it has printed.Is putting money into the economy inflationary to some degree? Yes.  So, if less money goes into the economy because of tax cuts versus more money going into the economy because the Government took it, which action is more inflationary?It's the latter.Then we come to the simple premise on spending. Governments don't actually need all the money they take.There have been few, if any, governments in my lifetime that spend the way this government has. Plus, the wastage is astonishing.From the money for cycle bridges that don't happen, the Let's Get Wellington Moving programme that hasn't moved, the hiring spree in the public service that has created God knows what, and the big red zeros at Waka Kotahi. The list is a mile long and very little of it is productive.The point is, not spending is not inflationary. This week's debacle on the cost of living payment is all the evidence you need, money scattered everywhere whether it was needed or wanted, or not.But the biggest and best argument of all, is that people who work hard and earn their money deserve to keep as much of it as possible.And there is a fundamental right, that if it’s your money and you earned it, you can spend it any way you want, or not, governments often forget that.Especially ones that like to tax like this one does.I don’t blame Labour for having a crack at National, they have had one of their more forgettable weeks, they were desperate for a distraction. But tax cuts are good, a government taking as little money off us as possible is good, keeping our own money to do with what we want is good.Who looks after our money better, us or them?Case closed.See omnystudio.com/listener for privacy information.