Nicola Willis dropped a wee hint to the BusinessNZ election conference yesterday.
Bracket creep is hurting workers – as wages increase and you creep into a higher tax bracket, you pay more marginal tax. That's not fair.
So, something might be done about it.
I say "might" because there are caveats and they're big ones.
National must be re-elected. Its coalition partners would need to agree. That was far from a done deal yesterday.
And the Government must have the books back in surplus – the plan is 2029/30.
But as I said yesterday, even then it's wafer-thin, and how many times have we been promised a surplus that doesn't eventuate?
More times than I can count. It feels like a mirage.
We'll find out more after the fiscal update at the end of the month. On October 11th, ACT will make its pitch for flatter tax rates.
New Zealand First is working on a foreign investment tax incentive. The Nats are looking at changes to the R&D tax credit.
So, tax cuts, rather just hikes, are on the election agenda.
But not quite worth getting particularly excited about.
Too many hoops to jump through, hills to climb, and water to go under bridges before this becomes a serious pitch voters should start thinking about and factoring into a decision before November.
Ryan Bridge is a New Zealand broadcaster who has worked on many current affairs television and radio shows. He currently hosts Newstalk ZB's Early Edition - where this article was sourced.
1 comment:
If the next government does nothing then taxes increase because the brackets do not increment with inflation.
Consider a worker earning barely above minimum wage $25.72 per hour. Ignoring holidays he has hit the 30% tax bracket. The median wage is $35.96 well into 30% territory and almost nearing the 33% level.
And don't forget that the GST total take increases with price increases by definition.
And quasi-capital-gains taxes such as the bright line test do not adjust for inflation. Tax payers pay again for the reduction of their purchasing power.
So taxes only stay the same if 1. inflation goes to zero OR 2. the tax brackets, GST and other inflation based taxes are incremented to compensate for inflation every year.
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