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Tax Review calls for the lowering top tax rate

Tax Review calls for the lowering of the top rate of tax

Wednesday 20th Jun 2001 Rodney Hide Media Release -- Economy

ACT Finance spokesman Rodney Hide said today it was heartening and a vindication of ACT policy that the Tax Review 2001 released today had called for a cutting of the top rate of tax and for a more “proportionate” tax scale rather than a progressive tax scale at present.

“The Review favours having two rates instead of four. We used to have three but the present government increased the top rate of tax for individuals above $60,000 to 39 cents in the dollar.

“The Review correctly notes that ‘the country is not well served if [taxpayers earning over $60,000] reduce their saving, focus more effort on avoidance, raise their fees to recoup extra tax, or migrate.’ The review accordingly argues for reducing the top rate of tax to 34 cents or below. And to having just two rates of tax, not four.

“ACT has continually stated that the way to genuine ongoing economic growth is to reduce – not increase the top rates of tax. The review confirms that this Government is moving in completely the wrong direction.

“In the past year the country has suffered the consequences of increasing the top rate of tax. The benefits the country would enjoy through a lowering of the top rate are now long overdue.

“The 7.5 percent of taxpayers earning over $60,000 pay 40 percent of all income tax. They are paying well over their fair share.

“We don’t need to lift anyone’s tax, we just need to get government spending (especially welfare) under control, and to pull down the top rate of tax to 20 cents so that we can all have a brighter and more prosperous future,” Rodney Hide said.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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