“While the CTU attacks National for wanting Labour’s tax policy to be adjusted to inflation, ACT is proposing real change. Our fully costed alternative budget for real change, has proposed a flatter, simpler and more competitive tax structure that sets New Zealand up for long-term growth,” said ACT Chief David Seymour.
“Bracket indexing is simply Labour’s inflation-adjusted policy. It’s not a tax cut because the rates stay the same. It freezes Labour’s tax policy in time. Having six income tax rates is not only complex and uncompetitive, it promotes bad values. It’s the big poppy syndrome in the tax code.
“When our productivity growth is at rock bottom, when the median wage gap with Australia approaches $25,000, when young people leave in droves, it’s time for real change. ACT has a fully costed tax plan that will provide this.
“The ACT is the only party to have published a fully costed alternative budget. It shows how spending could be cut by $7.2 billion with measures such as ending corporate welfare and returning the number of bureaucrats to the 47,000 inherited Labour. With this, we can afford significant tax changes.
“The 2020-21 income data shows how much of a tax burden is borne by so few taxpayers. That year, nine percent of taxpayers filing over $100,000 earned 37 percent of reported income and paid almost half, or 49 percent, of all income tax. The new 39c tax rate did not apply in 2020-21, it is possible that 9% of taxpayers filing over $100,000 now pay more than half of the income tax.
“Under ACT tax policy, that 9% filing over $100,000 in income tax would still earn 37% of reported income and still pay more than their fair share at 44% of total tax on income The difference is that all taxpayers would pay less.
“People earning between $2,000 and $48,000 will receive a low- and middle-income tax offset of up to $800 that offsets the additional $980 in income tax. They will also receive an additional $253 in carbon tax refunds for each person in their household, which will leave them better off overall. ACT’s tax exchange benefits everyone.
“We would reduce the average income tax rate from 30c to 17.5c in the first year. A nurse with one child, for example, earning $70,000 would receive about $2,300 in tax relief.
“Further further tax cuts, reducing the rate by 33% to align with the corporate tax rate of 28%, would be implemented as soon as inflationary and fiscal conditions allow. fiscal year 2023/24 would allow a government following the ACT budget to return to surplus by 2024/25 on the current forecast.
“While providing this essential aid to Kiwi households, there would still be $ 1.5 billion in new spending to pay more good teachers, increase our defense spending to match allies and share GST on construction with councils. premises to build more infrastructure.
“Successive Labor and National governments have made our tax system more complex and less efficient – we now have six tax rates. New Zealanders are overtaxed across the board and tinkering at the margins with indexation will not change that, that will integrate it.
“We need to enshrine aspirational values in our tax system, making it fairer, simpler and more competitive. It’s not only possible, it’s essential.
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