Working for families?

May 26, 2008

This is the second post in a two part series about the tax changes announced in the budget last week. Part one is Tax matters?.

In all of this talk of tax nobody seems to be saying much about what our tax dollars are actually spent on.

David Slack’s post last Thursday reminded me of an idea that Jimmy Wales (founder of Wikipedia) put forward a while back for a transparent budget.

When people struggle to keep on top of how much they personally earn and spend, then it’s probably also true to say that they really have no idea how much tax they pay, or (more importantly) what it is spent on.

Imagine if we were each sent a statement at the end of the year which included the total amount of tax we had paid and a breakdown of how this had been allocated to the various things that the government decided should be funded using this money.

Now that so many more of us are beneficiaries, via Working For Families, Kiwisaver, Student Loan Interest Write-Offs etc, then those “credit” payments could be incorporated into the statement too.

I suspect people would think differently about our “free” health and education systems, for example, if they better understood how much of their money was spent on it each year.

How much tax did you pay last year?

And what was it spent on?

Don’t you think you should know?