Innumerate Greens
I honestly cannot believe that the Greens have made such a simple mistake, in a document which is intended to set out how they will finance their plans to significantly increase Government expenditure.
The Greens predict that increasing minimum wages will increase tax revenue by $519 million. Even assuming that people don't lose their jobs, which they will, increasing the minimum wage will reduce tax revenue.
Increased wages will increase the amount of PAYE collected by the Government. But wages are also a deductible expense to businesses. Given that the marginal personal income tax rate for those earning the minimum wage is lower than the corporate tax rate, increased minimum wages will decrease revenue from corporate income tax more than will be increased from PAYE, even assuming no increase in unemployment.
Let's factor in the GST which they also claim will increase tax revenue. Again, assuming no employment effects, those on the minimum wage may well increase their expenditure. But the shareholders will receive lower dividends. They will spend less. There will be no increase in GST.
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