OnPoint by Keith Ng

36

Sneaky brackets

It reared its ugly head with ACT's “bracket racket” speech two weeks ago. Full marks for the rhyming, less for the making of sense. I counted a dozen statistics describing the same phenomenon, and all of them were increasingly useless derivatives of the same two numbers.

But contrary to

(Boring explanation about assumptions that you can skip: 1) The 2000 tax regime adjusted by inflation is what we would have if there was no bracket creep (i.e. If tax brackets were inflation adjusted). It takes tax brackets in 2000 and adjusts them by CPI to 2008 values. The rates remain unchanged. This does not adjust the brackets for real wage growth, but that's a different argument entirely. 2) Labour's tax cuts are taken at 2011 (when it is fully phased-in) values, then adjusted back to 2008 dollars with an assumed CPI growth of 2.8% per annum. 3) National's tax cuts are assumed to be the same as

(Please, pretty please,

The game aspect of it draws people in, and then commentators can use it as a kind of punditry-aggregator. It's robust because it's self-correcting. If party hacks try to rig results by trading their own party at a very high price and the opposition at a very low price, then people will simply snap up all the underpriced stock and sell them the overpriced one. The result will be a lot of play-money changing hands (away from the party hack), but little change in the price. It also takes advantage of the 36 responses Email

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