No Right Turn: A Tax Cut For Every Worker

In a press release this morning, United Future's Gordon Copeland pointed out that ACT's tax policy would result in a tax increase for three-quarters of New Zealand taxpayers:

"According to information released with the Budget, New Zealand has 2.847 million taxpayers.

"Of those, some 500,000 New Zealanders currently pay tax at 15% and a further 1.661 million pay tax at 19.5 cents, i.e. a total of 2,161,000 taxpayers (or 76% of all taxpayers).

"So ACT’s goal of a 20% flat tax rate means more than three-quarters of taxpayers will get a tax increase under ACT’s policies."

Rodney Hide has reacted angrily, issuing a denial and demanding an apology on his blog:

I have just read your press release where you falsely claim that "more than three-quarters of taxpayers will get a tax increase under ACT’s policies". You assumption is that ACT is proposing a flat rate of tax of 20 cents. We are not.

I know you value your integrity and I look forward to you making a public correction.

My speeches and my questions in Parliament have all been concerned with the cost and implications of dropping the top rate of income tax including company tax to 20 cents in the dollar. Of course, that is not a flat tax because many people pay less than 20 cents. I have never suggested that their tax rates be boosted as you claim.

While Rodney's recent questions have indeed focused on the cost of dropping the top tax rate, it's more than a little disingenuous of him to say that he has never called for tax increases on the poor or advocated a flat tax. A quick Google round ACT's website shows that this simply is not the case. To take just a few examples:

• ACT's 2002 tax policy agrees with the MacLeod review that there should be "a single rate of tax", and sets the goal of "a flat tax rate of no more than 20%."
• Just two and a half weeks ago, then-ACT leader Richard Prebble was calling for "a flat tax rate of 20 cents in the dollar for both companies and individuals" in his post-budget presentation. He repeated that demand in The Letter the next day.
• A year ago, Hide himself was advocating "a low flat tax of 20 cents or less".

There's more, but you get the picture. ACT has consistently advocated for a single, flat tax rate for years. And yet now, when somebody points out that its actually a tax-hike on the poor, that’s not what they really meant? Pull the other one!

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