Greens pledge higher taxes for higher welfare

Andrea Vance at Stuff reports:

A Green Government would hike the tax rate to 40 per cent on income over $140,000 and use the extra revenue to tackle child poverty.

The party’s $1 billion poverty package includes new tax credits for low-income families and children in their first few weeks of life. These would be extended to the children of students and beneficiaries.

The party has this afternoon launched its election campaign in Auckland and also announced plans to harmonise the trust tax rate with the top income tax rate and crack down on avoidance. Its costings say this would generate and extra $1bn a year.

Under the plans, the Family Tax Credit and the In-work Tax Credit would be scrapped and replaced with a Children’s Credit, worth an extra $60-a-week. It would be extended to those who currently miss out on the In Work credit, which is available only to parents who work more than 20-30 hours a week.

Basically a huge income boost to families not working, funded by a tax hike on some families that are working.

The welfare system is designed so there is an incentive to be in work. The Greens want to remove one of they key incentives.