New Zealand’s tax and welfare policies are a mess.
Could the solution be abolishing the current welfare system and radically overhauling the tax system?

Is this feasible? Is it desirable?

Is the whole point of a tax and welfare system to redistribute from the well-off to the rest (we say it is)? Or is it just to transfer only to those in need—the “deserving poor”? There is a big difference, and our welfare state has strayed from its origins.

The Big Kahuna puts some radical changes to tax and welfare on the table.

  • Everyone aged 18 or over gets an unconditional, tax-free basic income (called the UBI).
  • This basic income replaces all other government-provided cash transfers—NZ Super, DPB, Unemployment Benefit, Working for Families.
  • All income is taxed at a single flat rate.
  • All capital should make a minimum required return, and that should be taxable—every year. No exemptions for your home.

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