How many times in recent decades have you heard the call for a better and fairer tax system?
How many times have we heard governments saying that the tax system needs to be looked at?
Well, I've got some good news for those at the upper end of income earning who may have been wondering when the tax axe was about to fall, forcing them to haemorrhage more.
It turns out, our tax system is pretty fair and equitable after all.
A new study completed for tax consultancy firm OliverShaw concludes that the wealthy in New Zealand pay most of the tax collected. OliverShaw is headed by the former deputy commissioner at IRD, Robin Oliver.
Oliver says that the higher their income, the more they pay. Those earning lower incomes end up paying less tax because of the various tax credits, and other payments they’re eligible to receive.
One of the key highlights of this study, is that the highest income earners are often in a better position to minimise their tax through investment in tax friendly assets.
When Chris Hipkins took over the role as prime minister, he said we should look at ways to make the tax system fairer. According to this study, that’s not required.
The revenue minister, David Parker made similar overtures about a year ago, claiming that data on the level of tax paid by wealthy people would be key to any future political debate on tax reform.
By the way, there are no plans for tax reform before the election.
The big concern I have is that this government is spending money as if it grows on trees, but their expenditure is now too high compared to the taxation system we currently use.
The outcome of the study, maybe reassuring for those with salubrious incomes, but it still leaves one big question unanswered: where do we go to get the money required to lift New Zealand out of the quagmire?
Even though the outcome of the study is quite clear, do you really trust any government not to tinker with the taxation dials once the election is won?
See omnystudio.com/listener for privacy information.
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