Total lifetime tax bill for the average NZ household
22 MAY 2017
FOR IMMEDIATE RELEASE
As Steven Joyce prepares to deliver his first budget on Thursday, the Taxpayers’ Union can reveal that the average household pays $1.48 million in tax over a lifetime - equivalent to 15 years of earnings.
In a paper published today, the Taxpayers’ Union reveals:
• Over a lifetime, an average household (gross income of $98,818) will pay $1.48 million in taxes (at 2016 prices).
• This is equivalent to the total income of a household over 15 years.
• Of the $1.48 million, approximately $826,000 is paid in income tax (56% of the total tax bill), $375,000 in GST, $121,000 in council rates, and $40,000 in petrol taxes.
• Households earning more or less than the average take even longer to pay their lifetime tax bills.
• The average household in the bottom ten percent of income earners will pay $381,187 in direct and indirect taxes, taking 18½ years to pay.
• An average household in the top ten percent of income earners will pay $2,772,842 in direct and indirect taxes, taking 20½ years to pay.
• Figures are based on a standard working life of 44 years (age 21-64) and retired life of 15 years (a life expectancy of 80).
The full paper is available at www.taxpayers.org.nz/lifetime_tax
Commenting on the findings, Jordan Williams, Executive Director of the Taxpayers’ Union said, "This new analysis shows just how heavy the burden of taxation falls on each and every family across New Zealand, pushing up the cost of living.”
Williams said, “Cutting down wasteful spending is key to reducing the average household’s lifetime tax bill. Corporate welfare, whereby the Government ‘pick winners’ with grants, costs taxpayers $1.3 billion per year and is a good example where money could be saved.”
“Kiwi’s tax bills are too high – and growing because the Government has not adjusted income tax thresholds to match wage inflation. Lower taxes don’t mean cuts to services, they mean a focus on cutting out wasteful spending. We hope Thursday’s Budget indicates renewed fiscal discipline, rather than loosening of the purse strings now that there are surpluses."
2017 Tax Freedom Day
Today, Monday 22 May, is also "Tax Freedom Day" - the day when the average New Zealander finishes working for the Government and keeps what they earn (based on OECD figures). See www.taxpayers.org.nz/tax_freedom_day_2017 for more information.