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OECD Report Misleading: NZ paying too much tax

MEDIA RELEASE

OECD REPORT MISLEADING: NZ PAYING TOO MUCH TAX

26 APRIL 2017
FOR IMMEDIATE RELEASE

Peter Malcolm – spokesperson for the left wing lobby group “Closing the Gap” – would do better had he actually read the report he was commenting on, says the Taxpayers’ Union head Jordan Williams.

Responding to Mr Malcolm’s comments, Mr Williams says, “The report’s conclusion that New Zealand has low effective tax rates compared to the OECD average is based on modelling on the very families Working For Families targets. He’s trying to use a report which says low income Kiwi’s aren’t taxed much, to try and justify higher taxes on the rich.”

“If Mr Malcolm’s arguments were correct, he is in effect arguing that Working For Families should be abolished and that this would somehow ‘close the gap’.”

“The OECD report fails to take into account GST, which compared to other OECD countries is a high burden, because there are so few exemptions. It also fails to account for ACC levies, local government rates, or Kiwisaver deductions.”

“New Zealanders are still paying high tax – just in different forms.”

"Mr Malcolm has also asked that the tax burden be much more progressive. In case he was not aware, the top 2% of earners already pay 22% of all income tax."

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“A better measure of the tax burden is the size of Government as a proportion of GDP. The OECD’s own figures show that New Zealand is quite high in this respect. The New Zealand Government is currently 39.9% of GDP, compared to only 33.5% in the United States, 34.3% in Australia, 35% in Switzerland, 38.5% in the United Kingdom, and 39.8% in Canada.”

For options available to reduce the tax burden, see the Taxpayers’ Union report “5 Options for Tax Relief in 2017” available at www.taxpayers.org.nz/5_options

“Mr Malcolm might quite like options 1 and 2 – which focus on low-income workers,” suggests Mr Williams.

ENDS


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