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Do you feel rich at $70K?

Do you feel rich at $70K?

Press release: ACT New Zealand
May 25, 2016. 9:00am

People earning $70,000 aren’t rich, and shouldn’t be taxed as though they are, says ACT Leader David Seymour.

“No-one on a five-figure salary should have to pay a 33% tax rate. Seventy thousand was once big money, but inflation and rising wages have pushed more and more workers into this top tax bracket.

“These aren’t rich pricks. These are hard-working Kiwis paying off mortgages and raising families. Yet National taxes them at 33%. The top tax bracket shouldn’t cut in until someone earns at least $100,000.

“Bill English claims taxpayers must keep waiting for tax cuts, but it’s actually just a matter of priorities. We could fund a sensible tax cut this year by eliminating corporate welfare and using a small portion of Budget 2016’s new spending.

“Households deserve greater control over their own incomes. They’ll do a better job of choosing how to spend their money than Steven Joyce will.”

Under ACT’s proposal, the top tax bracket wouldn’t take effect until workers reach an income of $100,000. ACT would then cut taxes for everyone earning between $48k and $100k down to 25%.

ACT’s proposal for Budget 2016:

Income BracketCurrentProposed
$0 to $14,00010.5%10.5%
$14,001 to $48,00017.5%17.5%
$48,001 to $70,00030%25%
$70,001 to $100,00033%25%
Over $100,00033%33%

These tax cuts would cost around $1.5 billion, and would be funded by eliminating corporate welfare ($1.3 billion), plus just $200 million in new spending. Core services like health and education would not be affected.

“Tax brackets would also be indexed to inflation, stopping workers from unwittingly being pushed into higher tax brackets,” said Mr Seymour.

“This is a modest proposal. ACT would make provision for further tax cuts in Budget 2017.”

ENDS


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