One line leaps out at me from the tax report published on Wednesday. It says the top 10 per cent of income earners now pay 44 per cent of all personal income tax. Think about that.
Nearly half of all personal tax revenue is contributed by just 10 per cent of us. Is this socially healthy? Progressive taxation is a fine principle but its ardent proponents seldom calculate the disproportionality of contributions to the common good.
D'ya think that's bad? As they say on the telly - but wait; there's more (our emphasis added):
Read a few lines further into the Tax Working Group's report and the picture gets worse. Once you distribute family tax credits, welfare benefits and national superannuation those top 10 per cent of taxpayers have provided 76 per cent of what is left for general public services. Seventy six per cent.
The Working for Families refund alone results in 40 per cent of households effectively paying no income tax. It would be cheaper not to tax their wages at all. The dependency ratio is not quite as bad as this of course because everyone pays GST at the same rate. Progressive taxers hate GST for precisely that reason.
We will hear from them if the Government adopts the working group's suggestion to raise the rate.
This, of course demonstrates the dilemma that the government faces in reforming the tax system it inherited. Much as the far right calls for Working For Families to be dismantled, it will not be. The plain fact of the matter is that it CANNOT be, because it is so entrenched. That dear readers, is the REAL legacy of the Clark government.
4 comments:
As a member of the top 10% of tax payers I am an enthusiastic supporter of any move to equitably share the tax burden.
If things don't change I will simply re-arange my affairs to reduce my families direct income to a level that entitles me to things like Family Support on the basis that if you can't beat em join em.
Agreed. Any changes to the tax system which results in me paying more tax will be negated as soon as my advisors find another tax dodge.
Yes even after all that I still am in that 10% who pay for all the losers who won't help themselves.
Blue Coast
Yep, in the same boat.
Wouldn't mind a bit of an overhaul on the tax system, and an overhaul on the government spending.
They expect me to budget so I can pay huge taxes, but they don't seem to feel the same constraints.
I have resisted the legal manipulation of affairs to minimise tax, but the other interesting stat in that report was that the top 100 or so income earners in NZ were not paying a lot of tax.
Its the guys in the middle being squeezed from both ends.
Time for a change.
But what percentage of the national income do the top ten percent of taxpayers earn?
Post a Comment