New Zealand’s highest earners will pay almost 25 per cent of all income tax received by the Government under Labour’s proposed top tax rate.
Labour campaigned on a new top tax rate of 39 per cent for people earning more than $180,000. It said that this would raise an extra $550 million a year and affect only the top 2 per cent of earners.
At present, the 3 per cent of earners who receive more than $150,000 a year in income pay 23.5 per cent of all income tax, or $8.67 billion of $36.85b.
NZ Initiative chief economist Eric Crampton said that would increase to 24.7 per cent if the Government was able to claim the full $550m in extra tax.
Some won’t be happy until the 3% have been taxed so heavily they leave.