National’s $2 billion tax theft shame

Press release: ACT New Zealand
April 12, 2016. 2:10pm

National will have taken an extra $2.1 billion from the taxpayer’s back pocket by the next election as inflation pushes Kiwis into higher tax brackets, according to new figures released by ACT Leader David Seymour.

“In 2004, John Key lampooned the Labour government for their refusal to end bracket creep. But now National is perfectly happy to bleed the taxpayer for extra revenue through stealth tax hikes. It’s an all-too-common example of National campaigning from the right and governing from the left.

“National’s only defence is that currently inflation is relatively low. But that’s precisely why they should make the adjustment this year – it would hardly affect the fiscal forecasts.

“The last time National formally changed tax rates was in 2010. But behind the scenes they’ve allowed their tax brackets to rob the average household of $2500 between those tax cuts and the next election. That’s $2.1 billion taken in total – a bill 80 times bigger than the flag referendum.

“National has been signalling tax cuts for next year, but it’s not clear whether these tax cuts will even be enough to offset the cost of seven years of bracket creep. Unless bracket creep is stopped, minor tax cuts will be a purely tokenistic gesture from another tax-and-spend government.”

Attached are figures from the Parliamentary Library showing estimates of the cost of bracket creep/fiscal drag between 2011 and 2017.

ENDS

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