Alliance calls for fairer tax system

Alliance Party Economic Development Spokesperson Quentin Findlay says the Alliance would introduce more direct taxes to make the tax system fairer for the vast majority of New Zealanders.

Mr Findlay was responding to the statements of Prime Minister, John Key who had confirmed that the Government was looking at increasing the level of GST to 15 percent and lowering personal taxation on higher incomes.

“GST is an unfair and regressive tax and increases in GST will hurt lower income workers and beneficiaries regardless of the Government’s statements that they would be compensated.”

Mr Findlay says that people were being misled into believing that by lowering direct taxes and increasing indirect taxes (like GST) that they would be better off.

“People are being told to focus on their PAYE tax and are ignoring the increasing percentage of money that they are paying in indirect taxation like GST. The result is that lower and middle income earners are paying far more in tax and are carrying a far heavier tax burden than they would under a progressive tax system advocated by the Alliance.”

Mr Findlay said that the Alliance believed in a ‘fair’ tax system and that could only be achieved if people paid taxes in proportion to what they earn.

“The first step is to increase the number of taxation bands at the upper level and create a progressive tax system. The second step is to reduce and eventually eliminate taxes like GST which penalise lower and middle income people.”

Mr Findlay said that the Alliance endorsed concepts such as a land tax, a capital gains tax and a financial transaction tax, which could be levied across financial transactions. A Capital Gains tax in particular was common in other democracies, except here in New Zealand.

“The very fact that other Governments such as the UK’s Gordon Brown are considering various types of transaction taxes and has given his support to the Tobin Tax concept is a positive step.”

The Government’s proposals and those of the Taxation Working Group are designed to ensure that speculators and New Zealand’s wealthy do not pay their way and have others pay it for them, Mr Findlay said.

The Alliance believes in a fair tax system and that means making those people pay their way through direct taxes.

ENDS

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