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New Zealand's ruling party plans higher tax for top earners if re-elected

48 Comments
By Praveen Menon

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48 Comments
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I guess someone's got to pay for Jacinda's bad decisions and it's not gonna be her. She even lied about taking a pay cut. As soon as the flashing cameras are gone, she never makes good on her promises.

Her ineffective lockdowns and slow border restrictions have lost NZ over $1.1 billion dollars, and thousands of jobs, and there's no end in sight.

As a New Zealander, I'm deeply ashamed to have her representing NZ.

0 ( +17 / -17 )

As a Kiwi, I’m surprised by the number of stories in this online Japan newspaper about New Zealand. It seems every major movement by Jacinda’s govt gets a brief headline in the latest news section of JAPAN today.

12 ( +15 / -3 )

not that NZ and Australia are not important, but it seems intentional as a way to have people talk about something other than Trump on this website.

No disrespect, would love to visit NZ someday and some of the coolest people I know in Japan are Kiwis. Just seems they need something else that isnt just a bunch of Trump hate (which also I wonder why is so prevalent on JAPAN today). so we get lots of Australia and NZ news.

-8 ( +7 / -15 )

Cool.

5 ( +10 / -5 )

The top 2% should pay more, they have more than enough cushion to afford it. While the other 98% scrabble to pay tax. Suppringly NZ people actually understand they are part of a society and being part of that involves participating for the benifit of all. Those decrying this are you actually in the 2%?

3 ( +11 / -8 )

Her ineffective lockdowns and slow border restrictions have lost NZ over $1.1 billion dollars, and thousands of jobs, and there's no end in sight. As a New Zealander, I'm deeply ashamed to have her representing NZ.

yet the facts dont align with your opinion, NZ has done one of the better jobs during this pandemic and the NZ voter still has her approval at over 60%, record high, ,meanwhile the opposition party sits at 25%, looks like she going to win Septembers election with ease

https://www.reuters.com/article/us-newzealand-election-ardern/new-zealand-pm-arderns-ratings-sky-high-ahead-of-election-idUSKCN24R0UI

7 ( +13 / -6 )

Think some people are just upset she is a working woman raising a child, and a very popular leader. What's the anger about 2% pay a little bit more, they won't notice. If you are on minimum wage that's a killer. Governments job is to look after the best interests of all citizens, not just the 2%.

8 ( +15 / -7 )

How will these tax rises affect Tax equalization and income splitting?

Jacinda Ardern's ruling Labour Party have been open about the costs and the need to balance the nations current account.

I have a number of New Zealand skilled employees both Nagoya JP and Brighton UK.

https://taxpolicy.ird.govt.nz/publications/2008-dd-income-splitting/chapter-2

0 ( +4 / -4 )

I guess someone's got to pay for Jacinda's bad decisions and it's not gonna be her

Actually, given the pay bracket she is in she will be paying the extra tax.  So she will be backing uo her words with actions.

8 ( +13 / -5 )

New Zealand's ruling party plans higher tax for top earners if re-elected

Good. I hope governments in other countries follow suit.

6 ( +14 / -8 )

This is socialism indemocratic form!

-4 ( +7 / -11 )

Better if the govts around the world better managed the taxes they already take, waste and squander.

They already spend like drunken sailors , more accountability and responsibility would be a great thing.

-4 ( +6 / -10 )

They already spend like drunken sailors , more accountability and responsibility would be a great thing.

This but for the 1%.

0 ( +4 / -4 )

I suspect that there will be a lot more taxes than this if they are reelected. As much as I am not a fan, Winston Peters was a real handbrake on Jacinda Ardern's propensity to tax, tax and tax some more.

-6 ( +5 / -11 )

Paying 39% on a pretty high salary will still leave New Zealand as a low tax country compared to most developed countries.

They've got to pay for the costs of COVID-19, so this seems like a modest tax increase to do it.

7 ( +12 / -5 )

Think some people are just upset she is a working woman raising a child, and a very popular leader. 

funny thats the polar opposite of another world leader who hates successful woman especially when they have majority support of the people LOL

2 ( +7 / -5 )

I suspect that there will be a lot more taxes than this if they are reelected.

and how else do you expect to pay for everything, tax cut to the rich and trickle down economics doesnt work hasnt for decades. Just have to look at America, over a trillion added to the deficit every year.

The stock market losses and deficit since the 2008 GFC well exceeds the whole US GDP. so

somebody explain to me how youre going to halt this spirally debt without raising taxes!? everything else has failed so far

4 ( +10 / -6 )

Even some one with only half a functioning brain cell knew that when adern applied her over reaching illegal lock down she had tax increases in mind to cover the busted companies and all those who had no jobs.

Thing is she knee jerk reacted instead of thinking things through properly and now the reality is starting to bite.

Her legacy is going to be broken promises and debt for generations and generations way beyond anyone could imagine.

She is not as popular as some try to make out. The polls are carried out by her pixie friends in media

-7 ( +5 / -12 )

Bjorn, if you love ridiculous fantasy so much, why not try writing little kids' books? You might even make a buck or two.

3 ( +10 / -7 )

I think it's fair enough since they didn't introduce capital gains and there is no inheritance tax. Don't think the top 2% will complain too loudly cause it's been a pretty good run in the past five years with property and shares prices in NZ. And they don't usually vote Labour anyway so it's a bit of a no-brainer for Jacinda. No way Winston Peters will be happy about it at all but she's probably figuring Labour will get enough seats to govern without him. I wonder what they will call it - The Smoking Rich Tax Amendment Bill.

0 ( +4 / -4 )

Ardern raising taxes on the eve of an election is a recipe for disaster. Taxing the job creators at a higher rate is not a way to escape the recession. Lower taxes for all are called for in this time of impending Depression. Its what all nations should be doing.

"Crusher" Collins has likely been handed victory over hard-left Socialist Ardern!

-2 ( +7 / -9 )

Seems like a fair and rational policy given the situation. Nothing extreme to see here.

The usual suspects will be screaming ‘socialism’ but they get hysterical of pretty much anything.

2 ( +7 / -5 )

Crusher" Collins has likely been handed victory over hard-left Socialist Ardern!

Take it easy, cobber.

Is that a prediction?

1 ( +5 / -4 )

Is that a prediction?

Yes. The Crusher's got this.

2 ( +7 / -5 )

It would seem logical to increase taxes on the wealthy (2%) in order for the government to cover its Covid-19 debt. After all, they probably weathered the storm without much loss (probably some gain too) and can afford to help. It seems that when things don't go their way, they're asking for the government to bail them out.

3 ( +5 / -2 )

Excellent news. The rich can afford it.

2 ( +7 / -5 )

The good news is that Ardern's coalition partners both look to be unlikely to survive the election.

National on the other hand has a viable coalition partner with ACT. Don't write Crusher Collins off!

-4 ( +4 / -8 )

hard-left Socialist Ardern!

LOL

-1 ( +5 / -6 )

From reading the comments above it would seem the 2% ultra rich need protection because...they are rich? And they are rich because its profitable to employ 98% of the population on low wages! A 50% tax rise might result in having them to sell that wrist watch they never use.

0 ( +5 / -5 )

Labour are 1/20 to win this election. National are 8/1.

Get down to the bookies if you fancy it.

0 ( +3 / -3 )

Agree with the intent, disagree with the implementation.

Under the post war regime there were maximum tax rates in the Western world that would have conservatives screaming communism and also unprecedented growth and prosperity.

Ardern needs to target the offshore interests buying up property in NZ.

-1 ( +1 / -2 )

Her government passed laws on foreigners buying land, houses so what's your point? It's been addressed. And how long do post war policies last? The world does change and a bench mark of the last war is not necessarily relevant. NZ has always done its own thing, if you are old enough to remember it banned Nuclear weapons decades ago. The US Navy were suddenly barred entry. It was the first county to give women the vote. She is focused on improving people's lives, something other countries might do in the next decade or two.

2 ( +4 / -2 )

A little wealth redistribution in the opposite direction for a change is a good thing. The wealth gap increases yearly so this is a welcome move.

4 ( +6 / -2 )

She is not as popular as some try to make out. The polls are carried out by her pixie friends in media

oh ok Im not condoning gambling but here are the betting odds, Ardern's Labour is the clear favourite, paying $1.16 to be the party that supplies the Prime Minister, with Collins' National well behind at $5. Punters don't rate Winston Peters' chances of leading the country, with New Zealand First at $26, while the Greens are paying $34.

so you going to put money on another party with those odds, goodluck lol

1 ( +3 / -2 )

Yes. The Crusher's got this.

the bookies and the polls certainly dont think so. Looks like the haters going to have to put up with a successful intelligent women and first time mother for a little longer yet. LOL

1 ( +5 / -4 )

“Our plan strikes a balance as we recover from COVID-19," Finance Minister Grant Robertson said in Wellington.

So lemme get this straight... it has something to do with the COVID pandemic, that the left-wing political party proposed to raise tax rates on high income earners?

Come off it! That's what the left-wing political parties always wants to do, rain or shine!

The new policy is forecast to generate annual revenue of NZ$550 million, he said.

One wonders whether those forecasts take into consideration the changes in behaviour that a higher tax rate on such income would result in. Typically the forecasts don't, and end up resulting in less revenue than forecast.

"No country in the world has ever taxed itself out of recession, but Labour’s first instinct is to raise your taxes," said opposition National Party spokesman Paul Goldsmith.

Wrong argument! The left-wing party has carefully designed this to attempt to directly impact only 2% of income earners. It makes it sound like the opposition party is only looking out for those top 2% of income earners.

The correct argument is to criticize this move for its negative impact on the economy. Broad-based, low rate taxes are best for economic activity.

-2 ( +4 / -6 )

And they are rich because its profitable to employ 98% of the population on low wages! 

Ummm... 98% of the population are not on low wages, unless you think all income in the $10,000 - $179,000 range is low.

-1 ( +3 / -4 )

and how else do you expect to pay for everything, tax cut to the rich and trickle down economics doesnt work hasnt for decades. Just have to look at America, over a trillion added to the deficit every year.

The idea is that you put a hold on spending increases, while the lower tax rates push economic growth higher and therefore tax revenues end up recovering faster over time and plug the gap. It's good policy! But it does require a multi-year commitment to stay the course.

The PROBLEM is that politicians almost always end up spending all the money in order to get themselves re-elected, instead of keeping to the sound strategy. Both on the right and left.

And this time, the COVID situation has completely blown plans out of the water though, but no one knew this had been coming.

The stock market losses and deficit since the 2008 GFC well exceeds the whole US GDP.

Huh, the US stock markets have been setting all time highs recently, according to my retirement investments? The GFC stock market losses have long since been recovered. Even Trump's election was supposed to (according to his opponents) crash the stock market - "never to recover", but instead they went up after his election. Don't be worried about the stock market right now.

somebody explain to me how youre going to halt this spirally debt without raising taxes!? everything else has failed so far

A growing economy will produce higher tax revenues. Pro-growth policy is a critical component of dealing with the debt.

However, spending has to be controlled as well - this is the tricky part, due to spineless politicians wanting to get themselves re-elected rather than conducting sound fiscal policy, at the best of times. Which the current COVID situation is not... once COVID passes, it really will be time for voters to start holding their politicians to account for election-buying spend ups. Western countries can no longer afford it.

-3 ( +3 / -6 )

Jacinda is nothing more than a populist. This, like so many of her colation's failed policies, is little more than a virtue signal. Having now now wasted billions of dollars, this meaningless little bit of fiscal adjustment has the effect of creating some schadenfreude amongst the left whilst accomplishing effectively nothing for the government books. Cindy the PR princess strikes again

-3 ( +2 / -5 )

The correct argument is to criticize this move for its negative impact on the economy. Broad-based, low rate taxes are best for economic activity.

fxgai - studies do not support this. High earners can, and are willing to, pay higher taxes. Your implicit suggestion of the trickle down effect has long been debunked and 39% is not a high tax rate for someone on that wage.

3 ( +5 / -2 )

Broad-based, low rate taxes are best for economic activity.*

fxgai - studies do not support this

It is broadly agreed, so I dunno what minority report studies you might be talking of.

High earners can, and are willing to, pay higher taxes.

Broad based, low rate taxes are best for economic activity, that’s the situation.

Your implicit suggestion of the trickle down effect has

I’m not implicitly talking about “trickle down”. Hey go read some studies about broad based low rate taxes (versus narrow high rate taxes) and get back to me.

The point is to do what’s best for the economy, so everyone can benefit.

0 ( +2 / -2 )

fxgai is correct, it is monetarily and fiscally improbable, I would suggest impossible to raise the necessary revenue from this mythical top 2 % in a decade.

COVID-19 economic response....

https://treasury.govt.nz/information-and-services/nz-economy/covid-19-economic-response

In just 8/9 weeks this pandemic elevated debt by some $17.7 billion.

Ardern's Labour Party, comfortably ahead in the election contest according to opinion polls, said it plans a new higher tax rate of 39% for people earning over NZ$180,000 ($118,908), which would only affect 2% of New Zealanders.

OK but this is the moral/political justification, for the forthcoming impact to middle/low income families who will ultimately have to foot the covid-19 bill.

Both direct and indirect tax hikes, probably cut in social. health and welfare spending.

-1 ( +1 / -2 )

I suppose New Zealand can probably grow its way out of the extra debt created by coronavirus over time, and fortunately interest rates are low recently.

But another thing struck me about this dopey tax hike idea.

Say you have a dink couple that combined make $300,000 a year, but both earners under $180,000.

Do they avoid paying higher tax rates on all that money, due to their individual incomes being under the threshold?

Fortunately, this is not my tax policy to have to defend :)

1 ( +2 / -1 )

Broad based, low rate taxes are best for economic activity, that’s the situation.

This isn't true. Low taxes on low earners, high taxes on high earners, and government intervention to spur spending are the best for economic activity. Flat taxes are garbage ideas that have never worked in reality.

0 ( +2 / -2 )

fxgai, I think Politicians must be transparent and open about tax rising policies. debts have to be serviced. That is life in the COVID-19 world we are living in.

The numbers just don't add up, so be open and clear.

Jacinda Ardern political modus operandi appears to be upfront/straight forward.

States/Countries have little room to grow there way out of the crisis/pandemic when locked down.

1 ( +1 / -0 )

But they won’t be locked down forever. Deal with the debt after the pandemic has subsided, I say.

If there is a time for government spending with wild abandon, it’s times like these.

Unfortunately they spend too much when times are good, but hopefully, hopefully after this episode, the voters who let this happen election after election will learn.

0 ( +0 / -0 )

Low taxes on low earners, high taxes on high earners,

How about low taxes on low consumers, and high taxes on high consumers?

Buy a new BMW or a house, pay loads of tax - how does that sound?

Those who don’t buy such things don’t pay such taxes.

The problem with taxing income is that it distorts behaviour - tax income more and you get people less eager to earn more income. I’ve experienced this first hand, and won’t be changing my mind about it.

and government intervention to spur spending are the best for economic activity

Well, I’m glad someone was grateful for the recent Abe government’s spend up of 100,000 yen per person.

Flat taxes are garbage ideas that have never worked in reality.

In what way did they “never work”? Do the cases you have in mind actually involve true flat taxes in reality?

0 ( +0 / -0 )

How about low taxes on low consumers, and high taxes on high consumers?

Sure, happy to do that too.

The problem with taxing income is that it distorts behaviour - tax income more and you get people less eager to earn more income. I’ve experienced this first hand, and won’t be changing my mind about it.

Only an absolute fool would want to make less money. You don't understand how the tax system works.

Well, I’m glad someone was grateful for the recent Abe government’s spend up of 100,000 yen per person.

Yeah, of course I was.

In what way did they “never work”? Do the cases you have in mind actually involve true flat taxes in reality?

In the way that they are unsuccessful. Unless you think that East Timor, Artsakh and Transnistria are economic powerhouses.

-2 ( +0 / -2 )

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