Increasing the top tax rate from 33c to 36c is not an "envy tax", as John Key claims. It is a tiny impost on the top 2 per cent of taxpayers. Someone earning $160,000 a year will pay an extra $6 a week in tax. They simply won't notice it. It is similarly daft for Steven Joyce to claim that this will somehow have an effect on the brain drain. It will have no effect whatever.$6 a week looks immediately suspect. Why would Labour bother?
So I did the numbers using income tax rates from IRD:
$160,000
First $14,000 at 10.5 cents = $1,470
Next $34,000 at 17.5 cents = $5,950
Next $22,000 at 30 cents = $6,600
Remaining 90,000 at 33 cents = $29,700
Total tax paid = $43,720
Remaining 90,000 at 36 cents = $32,400
Total tax paid = $46,420
Difference = $2,700 or $52 a week.
What did the writer do?
Forget to add a 0 on the tax taken at $90,000?
What a numpty.
Update. OK. I'm the numpty who shouldn't have assumed the thresholds were staying the same.
3 comments:
Labour's media release (https://www.labour.org.nz/media/labours-alternative-budget-strong-economy-and-fair-society) and full fiscal plan (https://www.labour.org.nz/sites/default/files/issues/labours_fiscal_plan.pdf)
both are clear that
Labour will introduce a new progressive tax rate on income over $150,000 a year of 36 cents in the dollar.
For someone on only $160,000, they'll pay an extra 3% on $10,000 pa, which is only $300 pa or $5.76 per week.
Labour's media release though says this is targeted at a mean income of $250,000 - i.e. solidly middle income Kiwis - and an extra 3% of $100,000 is $3,000 p/a or $58 per week.
The most salient point of course is that Labour's written policies mean nothing, because the Greens, Mana & NZF will set the tax rate, especially with Norman as Minster of Finance. A much more realistic benchmark for what a "coalition of the losers" will actually do is the UK's 50% marginal tax rate coming in at your 90K band, and then say 70% at 150K. On those figures someone on a moderate $160,000 would pay an extra $270 per week, and a middle-income $250K would pay an extra $620 per week
The fact that middle-income Kiwis will be looking at losing over $600 per week is another example that anything other than a National government after the next election will be widely rejected as illegitimate by a majority of Kiwis.
As Whaleoil is very keen to repeat: if NZ had an Independent Commission Against Corruption, Cunliffe would be in gaol and Labour wouldn't be allowed to stand.
Another pointless idea from the nineteen seventies/eighties that could even end up costing more to try to implement than it would collect in tax.
A smarter idea would be to stop the Google and Facebook claiming "losses" or ridiculously low earnings. It would collect more tax and not discourage people from bettering their position.
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