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The Green Party will refrain from supporting the change to Labor’s top tax rate law, which would create a new tranche of 39 percent on income above $ 180,000.
Green Party co-leaders Marama Davidson and James Shaw, left, and Labor leader Jacinda Ardern. Source: 1 NEWS
Green co-leader James Shaw said it could “further increase inequality as high-income people are incentivized to invest even more money in property.”
“Increases in income tax, even on top, with no taxes on asset wealth or capital gains, just encourage people who own their own businesses and set their own high wages, to fix their finances in a way that reduces your income tax. “
“In addition to inflating house prices, the policy is expected to generate only a small amount of income, none of which has gone to people living in poverty.
“It is for these reasons that we could not conscientiously support legislation that is likely to lead to a worsening of wealth inequality.”
Co-chairman Marama Davidson said they could not vote in favor of a bill “that will likely exacerbate wealth inequality in New Zealand.”
ACT’s David Seymour said that putting a top tax rate of 39 percent “discourages profits.”
“It is also not surprising that the government has signaled that it will increase the rate on trusts to 39 percent if it finds that people are finding ways to avoid the new 39 percent income tax rate.”
Finance Minister Grant Robertson called the policy a “balanced measure consisting of burden sharing for everyone to do their part to help our country rebuild after our fight against the Covid-19 virus.”
Finance Minister David Parker said it included “powers to collect information from trustees to test compliance and effective operation of the 39 percent tax rate and to better understand what trustees do with the assets and income of the escrow”.
“If trusts are used for the sole purpose of paying a lower tax rate, it is unfair to all New Zealanders who pay the correct amount of tax.
“If there is evidence of this type of behavior, we will follow it up.”
