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Eat the Rich: Study finds NZ tax system favours bottom half

Summarised by Centrist

The top 20% of income earners paid most of the taxes, while approximately half of Kiwi households receive more in benefits than what they paid.  

Those are the findings of a research paper, based on data from the fiscal year ending March 2019, by the NZ Treasury, showing that Wellington collected over $40b in incomet taxes from individuals. However, the top 20% of earners contributed more than 50% of that total amount. A significant redistribution of that money was made through tax policies and social benefits for lower-income groups.

The research also found that the government allocated nearly $18b for healthcare and $14b for NZ super and veteran’s pensions, which made up over half of income support payments for all households, on average.

University of Auckland professor Craig Elliffe has concerns about long-term sustainability, especially as an ageing population poses challenges to the tax system. 

Meanwhile, Professor of Public Policy at Victoria University, Arthur Grimes says the public might not know that a small percentage of high-income earners pay the majority of tax revenue, while “most people at the poor end are net recipients from the government.”

Suggestions for tax reform include introducing a capital gains tax to enhance sustainability and reduce income inequality. 

Read more over at The Post

Image: ​​Chris Potter

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