National’s tax cuts haven’t cut tax avoidance
National’s tax cuts haven’t cut tax
National’s 2010 tax cuts, that advantaged New Zealand’s wealthiest citizens, have unsurprisingly failed to spur an altruistic upsurge in compliance, Green Party Co-leader Dr Russel Norman said today.
Information obtained under the Official Information Act shows that only 50% of the wealthiest Kiwis are currently paying the top income tax rate, despite it being cut by National in 2010 to 33%. Finance Minister, Bill English, argued at the time that shortfalls from cutting the top tax rate would be offset by tightened compliance measures.
“The Government’s tax cuts in 2010 failed to address the ability of some very wealthy New Zealanders to structure their affairs so they pay less tax than many middle income earners,” said Dr Norman.
“If we want to strengthen our economy we need to strengthen the fairness of our tax base.
“A lot of the income the very wealthy receive would be captured by a capital gains tax.
“Low and middle income New Zealander’s on ‘pay as you earn’ are paying their fair share, helping to build schools, hospitals and pay for our public services.
“It is not fair that many rich New Zealanders are cheating on their tax.
“National’s unfair tax cuts coupled with widespread tax avoidance by some of our wealthiest citizens undermines the public’s faith that we have a fair and equitable tax system.
“Widespread tax avoidance from the top down is a big part of the reason Greece is now the basket case of Europe,” said Dr Norman.
Research undertaken by the University of Chicago found that if Greece had collected all the taxes due in 2009, it would have generated an additional 11.2 billion euros.
“The Key Government needs to look at solutions that make New Zealand a fairer place rather than tax cuts that increase inequality. Tax is the price we pay to live in a civilised society.”