Labour has today announced new tax policies.
The Greens were first out of the blocks in announcing policies a couple of months ago are proposing a reasonably radical shake up of the tax system. From their policy release:
Here’s what our Fair Tax Plan includes:
We’ll tax wealth fairly by introducing a new tax on individuals’ net wealth over $1 million. This means those who have their own wealth worth more than $1 million – not including mortgages and other debt – would be asked to pay a small annual contribution to fund stronger social support for all New Zealanders. This would only apply to the wealthiest 6% of New Zealanders.
We’ll update progressive income tax so those earning much more income contribute a little more to help fund better social support for everyone. We’ll introduce new income tax brackets of 37% for income over $100,000 and 42% for income over $150,000. We expect this to generate approximately $1.3 billion a year, which will fund improvements for public health, education, income support, and environmental protection.
We’ll close tax loopholes & minimise tax avoidance by taxing big digital giants such as Facebook and Amazon.”
The Green Party’s estimate is that the wealth tax will raise $7.9 billion in its first year and the tax changes $1.3 billion a year. No one whose individual net wealth is less than $1 million will have to pay it. The collected money will go largely into income equalisation.
The Labour Party proposal is more modest, a new tax band for income over $180,000 of 39c in the dollar. It mimics what was proposed in 1999 when the new band started at $60,000 . Like the Green policy it also proposes changes so that foreign multinationals pay more tax. The change is anticipated to earn $550 million a year.
I have not seen National’s response yet but I anticipate it will be negative, which is a bit rich from a party that yesterday pledged up to $500 million to do up the Hawkes Bay Hospital and whose party has proposed $31 billion in new transport projects over the next 20 years by borrowing the money.
And there is no sign of a fiscal plan from National. Claims that they need to wait for the PREFU are tosh. National has never looked more disorganised.
The releases will invoke considerable debate. What is better for Aotearoa? The Green’s radical shake up or Labour’s more incremental proposed changes?