This section focuses on taxation and income earning.
The big issue relating to these topics is wealth inequality. Wealth is broken down into income and assets. Since the 1980’s the average income of someone in the wealthiest 1% has doubled compared to someone in the lowest 10% which has stayed the same (adjusted for inflation). The wealthiest 10% own nearly a fifth of the country’s net worth, while the poorest 50% of the country has less than 5 per cent. There is clearly a gap in income and asset holdings between rich and poor. Wealth is of significant interest in respect of its implications for health outcomes, economic and social well-being, opportunities for social participation, and ability to withstand life-shocks.
Current brackets:
| Up to $14,000 | 10.5% |
| Over $14,000 and up to $48,000 | 17.5% |
| Over $48,000 and up to $70,000 | 30% |
| Remaining income over $70,000 | 33% |
Company tax is 28%. Current minimum wage is $15.75
Since the last election under nationals guidance the minimum wage has increased from $14.25 to $15.75. This is below the inflation rate || Continue R & D grants to businesses || Change tax brackets thresholds || Extend paid parental leave.
Minimum wage: details click here
Research and Development grants would continue to be supplied to small businesses. Businesses whom qualify are eligible to claim back 20 per cent of their research and development expenditure up to $5 million a year. To qualify businesses must spend $300,000 and 1.5% of revenue on R & D in New Zealand. The budget 2017 has seen this been allocated $657.2 million over the next four years.
Tax brackets thresholds will see changes to the lowest income brackets. The lowest rate, 10.5 per cent, would apply to all income up to $22,000, as opposed the the previous $14,000. The second rate, 17.5 per cent, would apply to all income up to $52,000, rather than the current threshold of $48,000.
Extend paid parental leave to 22 weeks. Currently paid parental leave is available for up to 18 weeks
Reduce all individual tax brackets || Reduce company tax to 25% || End all tax exemptions and subsidies for businesses.
Tax brackets changes: 0-14,000 10.5% to 10%; 14,000-48,000 17.5% to 15%; 48,000-70,000 30% to 25%; more than 70,000 33% to 25%,
Company Tax changes: 28% to 25%.
Business tax exemptions and subsidies will be removed such as charitable donations tax deductions.
Implement a tax shift by reducing individual tax rates and creating a tax for ‘revenue generating assets’ including property || Create a UBI (Universal Basic Income) for young families, young adults and elderly UBI.
The UBI (Universal Basic Income) system acts as a free wage which is essentially a benefit. TOP would provide a UBI of $10,000 per year for every family with children of 3 years of age or under. Provide an additional $72 per week for “struggling families” with children (under 17 years). Free full-time childcare for low-income parents in paid work, with children aged one to three years. Replace superannuation with UBI. The new scheme will split the sum pensioners received under superannuation each year into an unconditional sum $10,000 and an conditional sum $10,000. The conditional sum is means tested which will be an asset and income test. Introduce a youth UBI which will see people between 18 and 23 will receive $10,000 per year. They will remove student allowance and student living costs.
Tax Shift from PAYE earners to owners of capital. This will reduce tax by PAYE earners by 1/3rd and shift that lost tax to property owners. The underlying goal of this policy is to get rid of the ownership of property tax loophole. The tax loophole is surmised by: if have a choice to spend money on a house or put that money in the bank you will be better off buying a house as you pay taxes on revenue from bank interest but no tax on any gains from ownership of property.
New top wage tax bracket || New tax-free bracket || Reduce bottom tax rate || Introduce a capital gains tax || Increase minimum wage to $21.25 by 2020 || Universal dividend from Kiwi Climate Fund
Income tax will be adjusted. Introduce tax-free threshold up to $10,000 at the bottom of the income tax scale. Reduce the bottom tax rate from 10.5 to 9 percent on income over $14,000. A new top tax rate of 40% for those earning over $150,000.
Capital gains tax will be introduced. In order to treat all income the same, introduce a comprehensive capital gains tax on inflation adjusted capital gains at the time the capital gains are realised. Exempt the family home from capital gains tax.
Minimum wage will be increased to $17.75 immediately and will be continued to be set at a level that does not fall below 66% of the average wage. The minimum wage would be $21.25 by 2020.
A universal dividend would be paid annually to every New Zealander 18 years from the Kiwi Climate Fund, which replaces the Emissions Trading Scheme. This dividend comes from a levy a charge on climate pollution at industry level.
Click here to see the full policy documentRaise the minimum wage to $20 || Remove GST on staple items || Reduce company tax to 25% || Provide tax credits for businesses investing in R & D.
Minimum wage details click here
Remove GST (goods and services tax) on staple items such as food and rates. The exemption will not apply to food sold as part of a service in restaurants and takeaways, so that GST will be still be added to these food services, as is currently the case. However the food purchased by those outlets will be free of GST. This policy is estimated to cost $3 billion per year and will be funded by clamping down on tax evasion and the black economy (unexplained).
Company Tax details click here (please note this was in a speech and not detailed on their website).
Research and development costs will be tax deductible for businesses that invest at least 2% of revenue on R & D.
Implement a tax sharing policy for families.
Income sharing is a policy that allows the income of both parents to be combined and then divided equally for tax purposes. Under this system this would result in a reduction in combined income tax paid where there is a significant difference in income between partners.
No tax changes until at least 2020 || Increase the minimum wage to $16.50 an hour || Adjust withholding and provisional tax rules. || Extend paid parental leave
No tax changes until after the 2020 election, when a newly setup Tax Working Group would have reported back and their new proposed tax bill have gone through parliament. Any changes already announced would still be implemented. The group would be made to ensure that there is a better and fairer balance between the taxation of income and assets, in particular the capital gain associated with property speculation.
Minimum wage details click here.
Withholding and provisional tax would be adjusted as follows. Introduce a voluntary withholding tax, allowing businesses to choose a rate of their choosing and on their own timetable to meet their tax obligations , rather than the current system of provisional tax. Raise the threshold for businesses to pay provisional tax from $2500 to $5000. Remove late payment penalties on provisional tax.
Paid parental leave will be extended to 26 weeks. Currently paid parental leave is available for up to 18 weeks.
Click here to see the full policy documentIntroduce the living wage || Remove GST from milk and fresh fruit and vegetables.
Tax small businesses based on annual turnover rather than the 28% business tax || Adjust personal tax brackets || Abolish GST || Raise minimum wage to $20.
Company tax will be adjusted to tax small businesses based on annual turnover rather than the 28% business tax.
Personal tax brackets will be adjusted to as follows: Take no tax on income under $30,000. Introduce Progressive tax increases for incomes above $100,000 Tax all sources of income (shares, bonds, property, investments) at individual’s tax rate. Introduce a progressive tax rate for inheritances over $500,000 except for Maori land. Introduce a capital gains tax on all but family homes and Māori land.