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Alliance: Nat's tax cut plan is all upside down

Alliance Party says Nat's tax cut plan is all upside down

Alliance Party Media Release FOR IMMEDIATE RELEASE - Wednesday October 8 2008

The Alliance Party says that National's tax cut plan is all upside down according to list candidate Sarah Campbell.

This is due to National's tax plan favouring higher income earners over the vast majority of working class and poorer New Zealanders who get very little if anything from today's announcement. Under Alliance policy, approximately 67% of New Zealanders will benefit from lower tax rates under a progressive taxation policy.

"We favour a tax free threshold, progressive taxation, and an end to flat taxes such as GST," says Ms Campbell.

"This can be done with no loss of revenue as we have a fully costed plan that the public can see, and we are upfront about our intentions. The National Party are trying to buy votes, but we are trying to create a New Zealand where everyone has enough money to live on, and where society provides for people in need."

The Alliance wants to have an income tax-free threshold of $10 000. This will make a big difference to those on low incomes, in part-time and casual employment. People will keep the up to $1530 a year they currently pay in tax for this income. A tax free threshold is favoured by a number of parties as a way to reduce tax for lower income families, but it needs to be accompanied by reforms at the upper end of the scale as well.

Ms Campbell says this will be due to people on higher incomes paying higher marginal rates than they do currently, with a top marginal rate of 54% for those earning over $100 000.

"Progressive taxation will fund our Alliance Party goals of free education, a properly funded truly free public health system, and revitalised state housing. The terms of the tax debate have to be rethought as taxation is not something the Government does to people to punish them for their success – that's neoliberal madness – it's more about working together to create a decent society."

The Alliance has also been outspoken in its opposition to GST, especially on food. They have a fully costed plan to remove GST from food and replace it with a Financial Transactions Tax (FTT) levied at 2c per $100. The long term plan is to phase out GST altogether, as it is a regressive tax, meaning that those on lower incomes end up paying a higher proportion of their incomes in GST, as a higher proportion of their incomes go on goods and services.

"Tax cuts are not about cheese, or chewing gum, or anything like that, it's about being able to afford free education, free doctors' visits and prescriptions, and healthy homes, as it comes down to putting people first," she said.


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