Wednesday 23rd August 2017

Fairer Taxes needed to fund essential social services

A fairer approach to tax would mean more could be done to help those in need.

Bringing in a higher tax rate on the highest incomes could provide the resources needed to lift kiwi’s out of poverty – a way to help those facing hard times get back on their feet instead of falling behind. We also know from New Zealand and overseas evidence that societies where income and wealth are shared more fairly do better for everyone.

“A higher tax rate on incomes well over $100,000, combined with some form of well-designed tax on wealth, would deliver much needed income from taxes to fund essential services,” says Trevor McGlinchey, from the NZ Council of Christian Social Services.

Important support services holding our communities together are under huge pressure. Many organisations are struggling because government funding has remained the same while costs and needs are on the rise.

Vital services like early childhood education and home support for older people are being cut back and unable to meet increasing need. One key reason – too little tax is being collected to fund them.
The incredible work done by hundreds of community-based organisations around the country relies on funding through the taxes we pay.

“This is a real ‘double whammy’ for our communities,” says Trevor McGlinchey. “When people are hit by life shocks like loss of employment, relationship break down or illness, their quality of life is badly affected. But our experience shows that with sufficient resources we can see the transformation in peoples’ lives when they are supported to make changes, and learn new skills.”

Why should those with very high wealth pay next to no tax on their gains while hard working people pay the lion’s share of income taxes?

New Zealand is almost alone among developed countries in the way we let the wealthy get away with paying no tax on their wealth gains. Tax experts have various ideas for how wealth could be taxed in a fair way – but the important thing is to do something now and to put the money raised into lifting people out of poverty!

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