Rob Stock at Stuff reports:
The parliamentarians found it was more difficult to calculate an average tax rate for middle income New Zealanders, but an indicative comparator for someone on an average wage was 17.9 per cent, although Working for Families entitlements would reduce the average net tax rate to 8.4 per cent for a single-earner parent with one child, or 2.3 per cent with two children.
Yep, most people who have children pay little or no tax.
Since the changes in tax rates things will have changed a little, and the wealthiest will have seen their effective tax rates drop on paper at least, because the IRD has been strenuously pursuing them to extract more tax, and the IRD expects to bring in an extra half a billion dollars in revenue from the high net wealth individuals in the next 10 years through its crackdown.
Good – I support a low rate, broad base, with few exceptions.
But actually, when it comes to income taxes, New Zealand is something of a tax haven, because when Working for Families rebates are taken into account, 40 to 50 percent of households “effectively pay no net income tax, and roughly 40 to 50 percent of total net income tax is paid by those in the top 10 per cent income bracket, suggesting that the tax burden falls most heavily on the wealthy”.
Indeed. I’ll be blogging more on this, based on some interesting tax data I got under the OIA from the IRD.