National has announced that it will cut income tax for 16 months from December 2020 to March 2022 to help families during the economic crisis caused by Covid-19. This will also help businesses as boosting after tax incomes boost spending.
I’ve done a quick calculation of what this means for people at different incomes.
The biggest percentage reduction in tax is for those $20,000 and those earning $60,000 and $70,000. After $70,000 the more you earn the less your tax cut percentage is.
In absolute terms anyone who earns $90,000 or more will pay $4,000 less tax during the 16 months which makes a big difference to disposal income. Anyone earning over $60,000 will pay at least $2,500 less tax.
This provides New Zealanders with a real choice – a Government that will help people through the tough times by temporarily reducing taxes, or a Government that will increase taxes.