The government’s new 39% top tax rate bill was enacted after the House vote this morning

The Labor government has enacted its main electoral promise: to impose a new top tax rate on New Zealand’s top earners.

The bill also gives the IRD Commissioner more powers to investigate trusts suspected of being used to evade taxes.

The legislation, which means that those who earn more than $ 180,000 a year would pay 39 cents in tax for every dollar after that threshold, was supported by the Labor Party and the Maori Party in the House.

National and Act voted against and the Greens abstained.

The Maori Party voted in favor of the legislation as it supported more taxes on the rich, but a spokesperson said the policy made no sense with other taxes, such as a capital gains tax.

Despite not having the support of the Greens, the law still passed in the House, as Labor has 65 seats and a clear majority in Parliament.

The maximum tax rate policy was Labor’s flagship during the election.

“Our plan strikes a balance as we recover from Covid-19,” Finance Minister Grant Robertson said in announcing the policy.

It would only affect 2% of New Zealanders and is expected to generate more than $ 500 million a year.

The bill was presented to the House earlier this week and has already passed through the first, second and third reading.

As it is a bill that is in the urgent process, the selection committee process, a process in which the deputies examine a bill, was bypassed.

But it became a focus of debate during the committee throughout the chamber’s process, as there was a human rights problem with part of the bill.

Under the legislation, the IRD Commissioner would have more powers to investigate trusts that the department suspects are being used to evade taxes.

But Attorney General David Parker, who is also the finance minister in charge of the bill, made a slight change so that any information obtained by the IRD’s news proxy cannot be used in court against the person.

Before the bill reached its third reading, the Greens revealed that they would not vote with the government on the legislation.

Rather, they chose to abstain.

Speaking at the third reading of the bill this morning, Greens finance spokeswoman Julie Anne Genter said her party could not, in conscience, support this bill, “although we very much support a progressive tax system and we support a more egalitarian society. ” .

“Unfortunately, just raising the top tax rate, without addressing the lack of a capital gains and wealth tax, will actually result in a less equitable situation and exacerbate the current housing price crisis that we have, where in in the last year, house prices have risen almost 20 percent. “