10 January 2017

National letting wealthy tax avoiders off the hook again

The National Government has failed to stop high income earners from avoiding paying their fair share of tax, the Green Party said today.

IRD released aggregated tax data last week which shows a suspiciously high number of people last year declared their income just before the top tax rate threshold at $70,000. The (highlighted) spike is strong evidence of tax avoidance behaviour. (The lower spikes represent welfare and superannuation payments.)

“National’s 2010 tax cuts for high income earners were sold to us on the basis of eliminating exactly this kind of tax avoidance behaviour, by bringing the top income tax rate down closer to the company and trust tax rate — two of the key vehicles used to avoid paying tax,” said Green Party Co-leader James Shaw.

“National has had eight years to address tax avoidance at the top and has failed.

“Cutting the top tax rate for wealthy tax payers has not stopped tax avoidance, it’s just shifted the problem.”

“The Green Party in Government would work from day one to make sure that high income earners pay their fair share of taxes.

“The vast majority of Kiwis contribute fairly to the public services we all use; it’s an injustice to them that some high income earners are getting a free ride.

“Funding for investigating and auditing tax avoidance has been cut by the National Government. We’d restore this funding so IRD can catch tax cheats.

“National’s record on policing tax avoidance is poor. Bill English refused to close the capital gains tax loophole that encourages property speculation and his Government is having to be dragged kicking and screaming to address massive tax avoidance by multinational companies,” said Mr Shaw.

Link to IRD data and graph:

http://www.ird.govt.nz/aboutir/external-stats/revenue-refunds/income-distrib-individual-customers/income-distrib-individ-customers.html

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