Tax Cuts
March 30th, 2009 at 10:00 am by David Farrar
This is the amount of extra money you will get from Wednesday, if you are one of the 80% or so who do not get Working for Families.
As one can see the biggest proportional drops in income tax are those on the fulltime adult minimum wage of $25,000. Their tax bill will drop a huge 12.8%.
Those on the average wage of just under $50,000 will get a 9.1% drop in their tax.
Those on $100,000 only get a 4.4% reduction in their tax.
Anyone who was on the fulltime minimum wage (and not on WFF) will have their income increase by $1,043 and their tax drop by $301 (instead of increasing by $219) which means an increase in take home pay of $1,344 or an extra $25.77 a week.
And contrary to the cries from the left that the tax cuts favour the wealthy, in fact the total share of taxation paid by the those earning over $100,000 will actually grow slightly from 29.5% to 29.6% of personal income tax.
March 30th, 2009 at 10:19 am
Great table and thanks for posting this information. A simple and straight forward counter to the ceaseless lies and propaganda of the left.
Interesting to see which sector of the population actually underpins the government’s finances. Maybe its time for votes to be tied to taxation levels. It is ridiculous that someone paying only $4000 in tax should have the same voting rights as someone paying seven times that amount.
How about one electoral vote for every ten thousand in tax?
Vote:March 30th, 2009 at 10:24 am
Tax cuts and just rearranging the deck chairs… even if the re-arrangement was listed on the on-board cruise activities (ie election promise!). We need to …
1. Get rid of WFF
Vote:2. Introduce a flat tax
3. No tax payable on first $25k of earnings
4. GST at 10%
5. Shrink MSD and IRD and bank the savings
March 30th, 2009 at 10:25 am
Rebaiter, that’s a very 18th century idea. Didn’t work then. Aside from anything else, you would disenfranchise retirees and stay-at-home mums.
Vote:March 30th, 2009 at 10:27 am
an old lady was crying out loud this morning in radio live (9:20?) claim that ppl under 25k will have their tax increase by 8 cents per dollar. she said she asked both “national suppoters” and “labour people”.
the host (ML is probably still on flu) said he was not aware of such an increase, it’s “hard to believe” and expecting calls from ppl who knows better to explain it.
Vote:March 30th, 2009 at 10:30 am
“Rebaiter, that’s a very 18th century idea.”
There were lots of good ideas around in the 18th century. Try dragging yourself away from Shortland Street and studying a bit of H\history. I recommend ‘Makers of the Realm’ by Arthur Bryant as a good place to start.
“Didn’t work then.”
It did actually.
“Aside from anything else, you would disenfranchise retirees and stay-at-home mums.”
So are you arguing for or against?
Vote:March 30th, 2009 at 10:30 am
hmm a hundy a month.. i think ill spend $50 of vodka and $50 on boosting my carbon footprint.
or maybe spend the total amount on booze.. a nice premium bottle of spirits.. yay
how good was it hearing john key on B today (only heard the soudnbite)… “you can do whatever you like with the money, spend it, save it, donate it, reduce debt.. its all good”… im paraphrasing.. but whenever i hear our PM endorsing personal choice, i get half a woody!
Vote:March 30th, 2009 at 10:31 am
Where is the damn edit function???
Vote:March 30th, 2009 at 10:36 am
“How about one electoral vote for every ten thousand in tax?”
How do you dare to suggest that? Some of us will be really, I mean really, disadvantaged!
Vote:March 30th, 2009 at 10:36 am
reddy,
“Where is the damn edit function???”
What – you’ve only just noticed there’s something missing between your lower reptilian cortex and your fingers? It’s what the rest of us call “a brain”.
Vote:March 30th, 2009 at 10:41 am
Redbaiter (5470) Vote: 2 1 Says:
March 30th, 2009 at 10:19 am
How about one electoral vote for every ten thousand in tax?
Why do you want to disenfranchise so many of the nation’s wealthiest?
Vote:March 30th, 2009 at 10:41 am
“there’s something missing between your lower reptilian cortex and your fingers? It’s what the rest of us call “a brain”.”
Really? If you’re going to express your ignorance of where the brain is, you should perhaps learn some manners and do that only on your own behalf.
Vote:March 30th, 2009 at 10:45 am
Speaking metaphorically, reddy. Not literally. That’s an abstract function of higher thinking, so I guess it’s lost on you.
Vote:March 30th, 2009 at 10:48 am
When discussing tax cuts with neo-communists (let’s call them what they are… socialists has an nauseating veneer of acceptability) one has to understand their terms of reference. It is this: All personally generated wealth belongs to the state, and it’s up to the state to decide how much to return to us as income. Tax is the balance.
Vote:March 30th, 2009 at 10:54 am
I’m in favor of elementary comprhension testing for the right to vote. Can’t find your own ass on a sunny day with both hands not fit to vote.
Vote:March 30th, 2009 at 11:13 am
How about taking away voting rights from dole and DPB recipients?
Vote:March 30th, 2009 at 11:15 am
In the main, I agree with Redbaiter. One vote per $10K tax paid would be a great way to put the control of the govt back into the hands of the people who pay for it all. Sure some mega-wealthy who pay virtually no tax at all would loose their vote – so what.
Vote:March 30th, 2009 at 11:16 am
big bruv
Yes I would agree with that. They are on a free-ride so why should they choose the destination ?
Vote:March 30th, 2009 at 11:18 am
As much as I’d like that BB, I think National wouldn’t have the guts to carry something like out. It’s funny when the only comment people like “AG” can make against something positive like tax cuts is petty insults toward posters.
Vote:March 30th, 2009 at 11:25 am
EverlastingFire
People like AG love it when the general public is dependent on welfare and state assistance. If people have freedom they vote for AG’s favourite corrupt self serving Labour party redistrubitionists to look after them.
Vote:March 30th, 2009 at 11:26 am
Since we were assured by the theives in the Labour Party that John Key only handed out tax cuts for his rich mates, then according to Cullen’s logic, everyone earning above $24,999 is a rich prick. So after insulting almost all of the working population who’s going to vote for Labour now? And just how prosperous does Labour think NZ should be if $25,000 is a rich prick wage?
Vote:March 30th, 2009 at 11:26 am
Ooops…
If people have freedom they won’t vote for AG’s favourite corrupt self serving Labour party redistrubitionists to look after them.
Vote:March 30th, 2009 at 11:28 am
goodgod
Come on keep up. Even $25,000 is too much money for an individual to have. With that level of earning they can afford food and clothing. Who needs grey overalls and standing in food queue’s all day for a loaf of bread if you have income.
Vote:March 30th, 2009 at 11:29 am
Tax cuts.
National in power about 6 months – delivered.
Labour in power about 9 years – not delivered.
Conclusion: Labour lie.
Vote:March 30th, 2009 at 11:37 am
How bout a landlord gets his tenants vote?
we should be careful.. this will turn into a standard post! they will call it nationals new policy.. the herald will pick up on it heh
Vote:March 30th, 2009 at 11:44 am
Dime
I have a better idea than that, we should do away with all council rating charges and move to a poll tax.
We ALL use the services so we should ALL have to pay.
Vote:March 30th, 2009 at 11:46 am
big bruv
But but but… Then 10 people living in a house using 10 times the resources of one person living in a similar value house would need to pay more for the services they consume….
We couldn’t have that – imagine if retired people who have paid tax all their life were not forced out of the homes they have lived in for 40 years to make way for large families of beneficiaries…. It will never catch on.
Vote:March 30th, 2009 at 11:50 am
Proportion Smoportion DPF.
The rich are getting richer and the poor and working class are getting poorer, especially those who had signed up to Kiwisaver.
The table should be extended to show what the rich, such as the PM and the head of Telecom receive by way of tax cuts.
Vote:March 30th, 2009 at 11:54 am
Lets get the unions, who tax the poorest – again, to drop their ‘dues’?
How about that mickey me boy?
Sounds fair.
National has put money back into the pockets of the lower earners and you and the unions are complaining? WTF?!
Vote:March 30th, 2009 at 11:55 am
No wonder Labour got the arse. And you still haven’t figured it out have you.
Mt Albert will go to National by a large majority.
Vote:March 30th, 2009 at 11:56 am
“The rich are getting richer and the poor and working class are getting poorer, especially those who had signed up to Kiwisaver.”
But wasn’t that the panacea sponsored by the arrogant historian Michael Cullen?
The road to prosperity is lower taxation and letting individuals invest and do as they please with their money. If you don’t save during your working life, don’t ask to come up with handouts later.
It’s called individual responsibility, a concept alien to left-wingers and do-gooders.
Vote:March 30th, 2009 at 12:01 pm
“Lets get the unions, who tax the poorest – again, to drop their ‘dues’?”
Aren’t unions voluntary?
Vote:March 30th, 2009 at 12:02 pm
Tax cuts are always a good move.
Let’s see if National will keep its election promises and deliver the other tax cuts scheduled before the next election.
Vote:March 30th, 2009 at 12:02 pm
Aren’t unions voluntary?
Ha ha. Yeah right!
Vote:March 30th, 2009 at 12:20 pm
Flat tax is theft. Progressive taxation is obscene.
New Zealand needs regressive taxation; taxation should lower as income increases.
Why should those who work hardest be penalised the most? Who came up with the idea that the indolent have a God-given right to the fruits of everyone else’s labours?
Set a flat income tax at 30% up to $50K, everything above $50K should be tax free. That’s fair.
Make taxation optional on the first $20K – with the proviso that anyone who opts out of tax on the first $20K loses their vote; only those who contribute to society should have a say in how it’s governed.
Vote:March 30th, 2009 at 12:25 pm
“Ha ha. Yeah right!”
Proved me wrong.
Vote:March 30th, 2009 at 12:26 pm
oob
I would support having tax capped. Say for example once somebody has paid tax up to perhaps $200,000 they remainder of their income is tax free. Surely once somebody has contributed somewhere between 5-10 times the average amount of tax paid they have more than done enough.
lefties of course will scream because their view of world is still locked in the early 1900′s Labour mentality that nobody should earn too much and nobody should earn too little. Aka: Communism.
Vote:March 30th, 2009 at 12:29 pm
I’ve got 3 employees on $1,387.69 a fortnight.
2 of them have had their take home pay reduced from $1,123.01 to $1,118.47 with the “tax cuts”.
The third is tax code M-SL and contributes 4% to KiwiSaver, her take home pay is only reduced from $998.60 to $997.67 — but of course my contribution to her KiwiSaver has doubled.
What tax cuts?
[DPF: That reduction is not tax cuts. That is the increase in ACC levy due to Labour. And sadly there is worse to come, as Labour expanded the scheme so much. If none of your staff received a tax cut, then that will be on Working for Families and have had massive extra assistance over the last few years already - in fact they will be receiving far more from the rest of ous taxpayers than they themselves pay in tax]
Vote:March 30th, 2009 at 12:32 pm
POLL tax! theres a blast from the past! I never knew what it actually was until today.
I just remember as a young Dime, the media going nuts about it.. worst thing ever etc.
I’m all for POLL tax! i use fuck all services compared to the average person.
Vote:March 30th, 2009 at 12:40 pm
dime
It’s a bit like water meters. If you use less water than average it is in your interest to have one. Needless to say lefties don’t like it becasue 10 people in a large state house would use more water than one person in a small apartment. Somehow in lefty-logic that is wrong – but while telling you that they will then tell you you should pay extra tax if you waste precious resources. Water is precious when we are talking about the enviroment but should be free when we are talking about individual responsibility for it’s use (and wastage)…. go figure.
Vote:March 30th, 2009 at 1:08 pm
I’m in a union, I didn’t ask to be in it, I don’t want to be in it and they take money from me against my will.
The quite litterally piss my money up against a wall and most recently used it to offer “free” subways to people to come to their agm and vote for their financial plan because if they didn’t have enough numbers they would be able to pay themselves.
You can pretty much cram your “voluntry” unionism up your ass. They exist to no purpose and are so popular they have to bribe people (with thir own money) to go to meetings to continue to pay themselves for doing fuck all. All good preperation for their futures and labour hacks with their snouts in the public trough.
Fucking socialism.
Vote:March 30th, 2009 at 1:24 pm
“The rich are getting richer and the poor and working class are getting poorer, especially those who had signed up to Kiwisaver.”
Actually, the rich are (in the main) getting poorer because the value of their investments (housing, shares, etc) have tanked.
The poor are in the main just fine thank you, because being poor, they don’t have such large assets. Proportionally, they benefit more from declines in petrol prices, interest rates … and of course tax cuts (as DPF shows above).
And those who had signed up to Kiwisaver are actually getting richer because the Govt subsidy (which because of its cap is proportionally larger for low income earners) handily exceeds the investment losses.
Vote:March 30th, 2009 at 1:35 pm
You’d be a student then Murray? Forgot about them
Vote:March 30th, 2009 at 2:40 pm
“If none of your staff received a tax cut, then that will be on Working for Families and have had massive extra assistance over the last few years already”
No, those that didn’t receive a tax cut are not on WFF. Interestingly though, those three are of a similar age (early twenties) and are all single. Of those three, one owns a rental property, one saves half his net income, and the third is continually broke. It’s quite interesting seeing the different ways they choose utilise their money.
[DPF: May pay to check with IRD because anyone on $24,000 to $48,000 who is not on WFF should be getting an extra $10 a week (less ACC increase)]
Vote:March 30th, 2009 at 3:12 pm
Ah, spin.
Left: “The poor get an extra $500 a year; the rich get an extra $1200 a year. Tax cuts for the rich!”
Right: “The poor pas 12% less per year; the rich pay 4% less per year. Tax cuts for the poor!”
Vote:March 30th, 2009 at 3:22 pm
“May pay to check with IRD because anyone on $24,000 to $48,000 who is not on WFF should be getting an extra $10 a week (less ACC increase)”
Must be the ACC increase, as the figures I provided were calculated using the IRD tax calculators on the IRD website.
Vote:March 30th, 2009 at 6:19 pm
I hate to go on but … (actually, it’s what I do — just ask my wife)
Salary Old Tax New Tax
25K $84.63 $86.25
30K $106.13 $108.07
35K $127.86 $129.90
40K $149.37 $151.72
45K $182.36 $173.55
50K $215.39 $200.00
55K $248.41 $233.35
60K $281.43 $266.73
All figures calculated using IRD calculators, based on M Tax code, weekly pay period, no KiwiSaver.
I fail to see any increase in take home pay until you hit $45,000.
DPF, I’ve always admired your ability to see through the spin — I never expected to see you take the figures at face value without checking some real world situations.
The reality is, half my workforce have been told to expect a $10/week increase and they won’t get it. They’ll pay more.
Vote:March 30th, 2009 at 10:47 pm
CHD you are wrong when you say:
“Ah, spin.
Left: “The poor get an extra $500 a year; the rich get an extra $1200 a year. Tax cuts for the rich!”
Right: “The poor pas 12% less per year; the rich pay 4% less per year. Tax cuts for the poor!”
I would argue that its about the value of the cuts to the taxpayer, consider this:
Poor: $500 = return flight to Sydney
Rich: $1,200 = return flight to Sydney.
Socialist heaven I would have thought, its all equal afterall.
Vote:March 31st, 2009 at 7:58 am
My, My. 2 thumbs down so far for stating facts (rather than spouting ideaology).
DPF’s table is disingenuous at best. Without coulmns for old ACC levies and new levies, it fails to tell the whole story. I await the complete table.
Don’t bother telling me Labour left a huge blowout in ACC and it needs to be paid for, we all know that.
The sad fact is the whole story is not being told, which makes the above tax table no better than the MSM reproducing a press release. If you pay an employee less than $45k, after April 1st their take home pay will be less. End of story.
Oh, and Rich Prick, it was Repton with the “Ah, spin” comment — which I thought was very insightful.
Vote:March 31st, 2009 at 8:28 am
Both DPF and CDH are right on some counts and wrong on others – the key here is the independent earner tax credit (IETC).
This is the extra $10 for people earning between 24,000 and 44,000 who don’t receive benefits, super, working for families tax credits or a foreign equivalent. If your income is between 44,000 and 48,000 you can still receive the IETC but it is paid at a reduced amount for every dollar you earn over $44,000 up to $48,000 where there is no entitlement.
What’s being missed by CDH is that the IETC is driven by a tax code – employees must elect to receive the IETC by selecting the ME or ME SL (if they have a student loan) tax code. If you go and have a look at the paye calculator or the PAYE tables you’ll see the new ME and ME SL options and these do reflect the $10 reduction per week from 24,000.
It is important to know that it is more than just working for families that disqualifies you from receiving the credit – to be eligibile to claim the credit you be a NZ tax resident who is not:
receiving an income taseted benefit, NZ superannuation or veterans pension;
Vote:entitled to receive working for families tax credits
be the partner of someone entitled to receive working for families tax credits
or receiving or entitled to a foreign equivalent of any of the above.
March 31st, 2009 at 8:42 am
Interesting…where the hell do we find the amount of the ACC levy? Anyone? Is it flat like the ACC motor vehicle levy, which I believe is increasing by $32 per…year(?)
Vote:March 31st, 2009 at 8:49 am
CDH,
See below. Labour has left NZ witha legacy of deficit and financial black holes. National is balancing the books and putting cash back in the hands of the tax payer rather than handing out food stamps by way of WFF and Kiwisaver.
HTH’s
expat (2221) 16 3 Says:
March 30th, 2009 at 11:29 am
Tax cuts.
National in power about 6 months – delivered.
Labour in power about 9 years – not delivered.
Conclusion: Labour lie.
Vote:March 31st, 2009 at 8:55 am
And I didn’t mention ACC because you know thats where the increases are coming from.
National are putting money back into the economy for tax payers (because they are people too) not benefit receivers ie WFF & Kiwisaver bene’s
Vote:March 31st, 2009 at 10:40 am
Thank you Mr Cuddles, entering the new tax code makes all the difference.
Stephen, the ACC levey was $1.40 per $100 (1.4%) and will rise on April 1st to $1.70 per $100 (1.7%).
“Many employees may not realise that they already pay ACC levies (known as earner’s levy) in the PAYE that is deducted from their wages with income tax. At present the rate is 1.4 cents in every dollar of income. The Department of Labour recommended that this should rise to 2, then 2.1, and finally 2.2 cents in the dollar over the next few years, however, other advisers recommended lower rises. The Government has set the rate at 1.7 cents in the dollar for the 2009-10 tax year.”
Vote:– Source: Southland Times, Murray McLennan
March 31st, 2009 at 8:58 pm
Thanks CDH!
Vote: