Can you define the 20% who need to pay more tax by one's total income?
It is easier for the 80% to support this policy if you define the 20% who need to pay more tax based on their total income (which is direct income plus indirect income plus the notional rent based on say 3% of their rateable value).
Official response from Gareth Morgan submitted
Not that clear cut. The people with high income are already paying their fare share
The 20% we want to target are the 20% who are the most wealthy, indeed the tax cuts can be designed to ensure that. What wealth level does that cut in at? Who knows, wealth data in New Zealand is pretty sparse to be polite. It doesn’t matter in terms of policy design, you can implement the package so that the 20% point happens no matter what the actual wealth numbers turn out to be. If you think about it logically you could take all the revenue of one person and distribute a fraction of it to each and every other person. We each wouldn’t get much of course. So the question is a bit futile. It does amuse me however when I come across people who love the idea so long as they benefit - tells you a lot doesn’t it? The question is pretty simple with this tax reform - do you want a fairer New Zealand or not? Closing the loophole will achieve that.
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Gordon Ngai commented 2016-12-15 03:49:48 +1300When home ownership is at 65% in NZ, the proposed tax policy, without a break for lower income groups, requires all home owner to pay notional income rental will not help us to get the support for our policy. I think the policy forming process needs to include an impact analysis – to see who will be affected by the policy. -
Gordon Ngai commented 2016-12-12 18:41:39 +1300Let’s say if the total income of an individual is less than $180,000 (this includes salary, interest , dividend and the new notional rent income say 3% of rateable value of property) will not have to pay extra tax. When the average salary is only $60,000, the majority of people will feel safe to support the policy. The high income earner is not currently paying their fair share of tax if they put their wealth in property – that is the reason behind the proposed policy.
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Gordon Ngai commented 2016-12-12 18:00:33 +1300In a democratic society, we have to get the people behind us so that the party could be in a position to influence the Government of the day to implement our policies. Therefore in the promotion of the policy, pick a high enough total income number so that the majority of the people would have certainty that they would not suffer from the policy. The number need not to be very accurate now since we are changing the system direction and the number can change in the future to reflect the what would benefit 80% of the people.
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Gareth Morgan responded with submitted 2016-12-12 09:43:35 +1300
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Oliver Krollmann followed this page 2016-12-11 15:27:22 +1300
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