The Tax Working Group are concerned about the lack of “integrity and fairness” in our tax system, and their report discovered something which should shock all of us – that at least half of rich people don’t pay the taxes they should.
These taxpayers are not necessarily doing anything wrong but are merely taking advantage of the opportunities offered by the current system to shelter income from higher rates.
But after admitting rich people hide away money from the taxman, the Tax Working Group recommend raising GST and cutting the top tax rate, since rich people don’t pay it anyway. And who pays for this? Nearly everyone in New Zealand.
The Standard have put together this graphic, which shows who wins and loses under the new proposals:
As you can see these proposals are no good at all for anyone earning under $75,000, then quite sharply improve until they are making you an extra salary by the time you earn over $500,000.
Since just 1% of New Zealanders earn more than that, and only 6% earn over $80,000 that means, you guessed it, only people as rich as John Key have the pain of the recession eased for them by the new proposals.
I think the Tax Working Group might need to review the words “integrity” and “fairness”.