Hon Peter Dunne
Minister of Revenue

Wednesday, 26 January 2011
Media Statement

Dunne: 47c top tax rate needed to get Labour’s 10 bucks

New Zealanders earning over $100,000 a year would need to pay a top tax rate of 47 cents in the dollar just to fund Labour’s promised $10 a week tax break, Revenue Minister Peter Dunne said today.

“That’s up from the current top tax rate of 33 cents, which the Government brought down from 38 cents in last year’s Budget,” Mr Dunne said.

“These figures are calculated off the $1.3 billion shortfall that Labour would need to find if Phil Goff is to make the first $5000 of income tax-free.

“I don’t think New Zealanders will find ramping up the top tax rate by half acceptable.

“Once a government starts taking half of a dollar earned, you have got to ask if you are talking taxation or robbery. It is simply getting beyond what can be justified in any fair system aimed at incentivising people to earn,” he said.

‘That kind of short-sighted policy kills aspiration and sends higher-earning, skilled workers overseas in their droves, and is just part and parcel of Labour’s politics of envy,” he said.

If Labour brought in a top tax rate at $120,000, the required rate would be 52 cents in the dollar.

ENDS

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