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If we are going to move the tax brackets then I think the low and mid rates should be lower:
$20k-$40k => 15%.
$40l-$60k => 20%.
These are the workers that are doing it the hardest, and up the corporate tax rates up a touch, all to 33%? and the to 1% to 39/45%?
IMHO the tax brackets should be defined by a minimum wage multiplier.
E.g. someone part time on minimum wage: 0%, full time minimum wage: 5% and so on... Go as high as necessary.
Corporate tax? Every $ they're paying tax on could have been used to pay their employees better.
Corporate tax? Every $ they’re paying tax on could have been used to pay their employees better.
You know that the tax is paid on profit right; money they pay to employees is an expense and thus not taxed.
They could pay their employees more and reduce their tax burden currently and in the Greens tax plan.
Lets run a thought experiment:
And another:
Obviously there is a happy medium between 0-100%; that exact number is up for debate. But lowering the corp tax rate does not necessarily incentivize higher employee pay. In fact the opposite would be true in many cases; especially in mature industries where labor is not constrained.
Corporate tax? Every $ they're paying tax on could have been used to pay their employees better.
sure and they still can and take it from profit, that lowers they're profit and fence thief tax. Seems unlikely though
What about median income instead of minimum wage?
Hmm, maybe. I suspect that the median income is quite close to minimum wage :-/ at least in magnitude.
Mean income as a floor for the larger tax rates would shift the tax burden up over the mean... and egregiously large incomes would drag that floor up.
It is important to remember that if you earn 60k you dont pay a flat 25.5% tax. You only pay 25.5% tax on the portion of your income in the 40k to 60k bracket. You would still pay 0% tax on your first 10k you earn in a year then 10% tax on the next 10k you earn in the 10k-19k bracket, and 17.5% tax on the 20k earnt between 20k and 40k. That means for 60k your "effective" tax rate is more like 17% once calculated
Given the way things are looking. This is probably going to be the best policy announcement of the entire season.
Why aren’t they pushing the numbers more? A tax cut for most, and an additional 5bn in tax take sounds like a win. Yet it’s buried at the end of a PDF.
Huge increase in complexity to achieve this.
Not really, if one can handle five tax brackets then one can handle seven.
If one has built or bought a shitty payroll tool, then that's one's problem and no one else's.
It isn't just the 7 tax brackets, that isn't that hard to deal with.
It is the complexity with valuing a bunch of stiff to calculate tax on.
The inheritance tax isn't a bad idea, we are an outlier internationally WRT to this.
Ah, good point.
Though for the most part I suspect a flowchart from IRD is probably all most people would need.
There are a few things to like here. I would rather the number were a little more clear.
I would rather see the total tax take; not just the differences. Where thy say "tax setting changes -$2,335M" I would like to know is that 10% less or 2%; so I could compare it to the proposed tax increase from the other sources they are expecting.
From budget 24/25 contributions from individual tax were $62.2B; which gives us a better understanding of how these numbers stack up.
So individuals will collectively get about a 3.75% tax cut; weighted to the lowest income earners.
Corporate tax was $18.2B which if I'm reading their policy correctly, will increase to $20.15B. Which is about a 10% increase.
New taxes and restoring landlord taxes will gain an additional $5.37B.
So for the entire $136B crown revenue the increase is ~4%.
As an Opportunity supporter I have to contrast it with their policy to see how it stacks up:
| Opportunity | Green | |
|---|---|---|
| Headline thing | Citizens Income | Tax super rich |
| Tax Brackets | 3 | 7 |
| Wealth tax type | Land Value Tax | Valuation based system |
| Net tax difference | +$4.1B | +$5.3B |
| Complexity (admin cost) | Reduced | Increased |
| Ave wage comp ~$68k | +$6,651/yr (with $300k land) | +$577/yr |
| Ave wage comp ~$68k | +$11,901/yr (renter) | +$577/yr |
Yeah, TOP really have this figured out. I'm planning to vote for either them or Labour.
The Green party just have too much baggage to be taken seriously.
Opportunity are running a party vote campaign. So vote opp for party and labour for candidate... Get the best of both world's.
That's definitely my plan. I'm in Remutaka electorate, which Hipkins is all but guaranteed to win.
