David Farrar: Te Pati Maori’s bonkers tax plan

Te Pati Maori has announced the following as part of their tax policy:

• A top marginal tax rate of 48%
• GST of 15%
• A 2.5% tax on assets above a certain threshold
• An increase in the company tax rate by 5%

Let’s say you are a very high wealth NZers with $100 million of assets. Let’s say they produce income of 5% of their value, or $5 million a year. Very roughly the tax they would pay would be:

• Income tax of $2.4 million
• GST of say $350k
• Asset tax of $2.5 million

This would see that high wealth NZers paying an effective tax rate of over 100%. Now unless they are a moron, they would simply leave NZ. And then the actual tax paid in NZ would zero.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders