Government Should Design A Tax For The Future

Government Should Design A Tax System For The Future

“The Government should seriously consider the option presented in the final report of the Government Tax Working Group to drop and align personal, corporate and trustee tax rates to 27 percent,” says Steve Thomas, Researcher at Maxim Institute.

“While the Government’s desire to make realistic and practical changes is admirable, piecemeal change to the current tax system cannot help New Zealand any longer. If we are to reach our potential collectively as well as individually, we need to have a tax system that supports rather than hinders the economy” says Steve Thomas.

“The Tax Working Group’s recommendations are reasonable and important. They rightly point out that we need a tax system that will be competitive with other countries, especially Australia. This means moving away from high marginal tax rates which undermine work and entrepreneurship,” says Thomas.

“Economic growth by itself won’t guarantee New Zealand a better society, but at the same time it is a crucial factor in our future well-being. It is crucial not only for individuals to be able to improve their living standards, with better health care, services and educational opportunities, but it is also crucial for the country as a whole to thrive and to make the most of the incredible assets that we have,” argues Thomas. “Getting personal tax rates down is crucial if that growth is going to happen.”

“Aligning rates would also save us money as it would make collecting tax much simpler and more efficient, so less would be wasted by bureaucracy.”

“The scenarios presented by the Tax Working Group also show we can afford the $31 billion cost of aligning rates at 27 percent,” according to Thomas. “It could be funded by any combination of removing depreciation on buildings, a modest 05% land tax, a minor increase in GST to 15 percent, or by taxing residential property.”

“New Zealand should take the opportunity this report presents to make meaningful changes that will give New Zealand a tax system for the future.”

ENDS

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