Phil Rennie from the Centre for Independent Studies has done a short research paper on tax levels in New Zealand. A very useful contribution which sorts out facts from myths.
Amongst the findings:
* Anyone earning under $180,000 pays less personal income tax in Australia
* The top tax rate, while low at 39%, comes in at 1.4 times the average wage – the OECD average being 5.6 times the average wage
* New Zealanders are paying 50% more nominal tax than they did in 2000
* personal income tax makes up only 43% of total tax revenue
* tax as a percentage of GDP is 34.9% in NZ and 31.6% in Australia
* tax revenue increased by $4 billion last year alone
* long-term tax revenue forecasts are very conservative, growing $5 billion from initial forecasts
* the current surplus is $9.4 billion in the nine months to 31 March 2006
Finally I give you this quote from Gareth Morgan, used in the paper:
Surpluses deny people their reward from work through over-taxing
– Gareth Morgan, Infometrics
UPDATE: An article by author Phil Rennie is also in today’s NZ Herald.
UPDATE2: The Dominion Post editorial endorses the report and calls for the tax brackets to be lifted in this week’s budget, not in 2008.