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Taxpayers’ Union to present submission to Tax Working Group


Taxpayers’ Union to present submission to Tax Working Group at 3:30pm

30 APRIL 2018
FOR IMMEDIATE RELEASE
The New Zealand Taxpayers’ Union has finalised and will present its submission to the Tax Working Group, along with submissions from (as of 2pm) 804 Taxpayers’ Union members and supporters.

Where: 1 The Terrace
When: 3:30pm today (Monday April 30)

Taxpayers' Union Executive Director Jordan Williams says, “We look forward to hearing the Working Group acknowledge not just our own submission, but those of the 800 or so taxpayers who have submitted via our website.”

“The basic message from our supporters is clear: the Tax Working Group should not be used as an opportunity to dig even deeper into taxpayers’ pockets. This theme is reflected in our own submission, which says that any proposals to hike or introduce new taxes should be offset with tax cuts in other areas.”

“We would like to thank all the supporters who gave us feedback on our Exposure Draft, ensuring our constructive suggestions for the Working Group are comprehensive and of a very high standard.”

The Union's full submission can be read here. Key points include:

1. Where new taxes are recommended, we say the Tax Working Group should make them revenue neutral – i.e. balanced with tax cuts in other areas.

2. No taxation without indexation: we call for income tax thresholds to be indexed to changes in average earnings or, at minimum inflation (as happens in Canada). This would end fiscal drag (also called 'bracket creep').

3. We call for the company tax rate to be cut for all businesses rather than cutting tax rates for smaller businesses (as the Working Group’s Background Paper proposed). Having multiple levels of company tax would create perverse incentives.

4. We call for full tax deductibility for businesses’ capital spending within the first year of purchase to increase incentives to invest in capital and productivity, and increase wages.

5. The loophole allowing charity-owned businesses (such as those owned by churches and iwi even when none of the profits are used for the 'charitable' purpose) to operate tax-free should be closed.

6. Similarly, Māori Authority-owned businesses should operate under the same tax rate as their competitors paying 28% income tax - and not be allowed pay the special 17.5% rate.

7. We explain why introducing a complex Australian-style capital gains tax would be a step backwards and bad for investment, growth and employment.

8. On retirement investment, we say taxpayers should be allowed to deduct inflation from taxable interest income.

ENDS

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