Minimum wage worker 28% tax – John Key 2.8% tax
With the focus on the super-rich using New Zealand as a tax haven it’s worth remembering that even without tax evasion the rules here in New Zealand are so distorted that the super-rich, like Prime Minister John Key, pay a pittance in tax while the lowest paid workers bear the heaviest tax burden.
Here’s part of a media release I put out for MANA Movement at the time of the last election.
MANA Movement Economic Justice spokesperson John Minto is calling for a radical overhaul of New Zealand’s taxation system with calculations showing that a minimum wage worker pays a ten times higher tax rate than the Prime Minister.
Minimum wage worker 28% tax
Prime Minister 2.8% tax
The minimum wage worker on 40 hours per week earns $29,640 and pays $4,207 in income tax and $4,149.60 in GST giving a total tax of $8,356.60 or 28% of income.
On the other hand the Prime Minister earns $428,000 from his PM’s salary along with this year’s $5,000,000 increase in his wealth (according to NBR’s rich list) which gives him a total income of $5,428,000. On this total income he pays just $132,160 in income tax and approximately $21,400 in GST giving a total tax of $153,560 or 2.8% of income.
This is a national embarrassment. Those least able to pay are under a heavy tax burden while the super-rich pay peanuts.
The National government and its attack bloggers refer to the working poor as scum, bludgers and ferals but it’s clear the real problem is with the top 1% of income earners who get all the benefits of taxpayer funded facilities and services but don’t pull their weight paying for them.
Cleaners, fast-food workers, hospitality workers and security guards are all heavily subsidising the lifestyles of the superrich.
Exposing tax havens is important but more important is changing the rules here so the super-rich stop bludging off the rest of us.
Yeah but he donates his salary to charity we are told by the media, and someone at work the other day told me he doesn’t even draw his salary, sounds like BS to me?
Haha which ones?
Your life must suck
Actually Sean Plunkett found out he is paid over 400,000 and it is difficult to know what he pays to charity. However, where has his blind trust invested his $60 million, Tax havens?
John you forgot even the PAPERBOYS have to pay tax on their earnings – this system is the pits.
To be fair, gains in wealth that Key has cannot simply be counted as income. While I support a capital gains tax, we do not have such on personal wealth, unless there has been a clear gain through selling an asset like a business or home (within the law as it stands).
But yes, it is often conveniently forgotten what low income people pay in GST, and as they spend most if not all their income, they pay more GST than those with high income and wealth may do.
The cuts in income tax were to a fair degree “compensated” with the 25 percent increase in GST (a few years back).
That hit the low income earners much more than the higher income earners.
With the discussion of the Panama Papers we also get presented with absurd comments now. Those like Farrar now claim that New Zealand is not a “tax haven”, because it is ranked as one of other developed country with being rather transparent and gathering tax from most.
There are comparisons made with places like Austria and Germany, that they must then also be “tax havens”, as they rank higher than New Zealand.
What people forget is the fact that over recent decades many governments have brought in changes to the tax systems in order to compete with other economies for attracting investment. The neoliberal policies that have taken hold in so many places on the planet have led to the wealthy and the investors and employers being wooed and attracted, to take their money into countries where they can pay relatively low tax and earn more profits.
Countries in Europe, North America and so have all done this, and hence they may now rank as comparatively taxpayer friendly, investor friendly countries.
Hence places like Ireland, Netherlands, Austria, Germany and so are listed as “favourable” places, which some claim to be like “tax havens” to some.
We have banks, corporations and governments collaborate to cater for the haves and less so for the have-nots. This has resulted in more wealth shift to the top percentages of income and wealth holders, and the gap continues to widen.
https://en.wikipedia.org/wiki/Tax_haven#List_of_tax_havens_and_countries_of_financial_secrecy
For the wealthy countries like New Zealand have become like virtual “tax havens”, as they can put their wealth into trusts and also shift it offshore, evading and avoiding tax. The ordinary wage earner has no such ability, as she/he only earns so much that it barely covers living costs and gets spent.
PAYE also covers most that pay taxes as ordinary workers, there is little chance to hide any “wealth” that may have accrued.
The system is unjust, and that is the major issue, whether we call more places tax havens or not.
Also add on student loan repayments – effectively an additional tax on the younger generations.
Would Labour’s tax structure change this sham in any meaningful way? The answer is no. I understand Key and National ripping off poor people, but when Labour does it I get angry. We need some major structural changes from Labour regarding their tax policies and student debt ‘solutions’.
Nice to see my first comment about John getting his numbers completely wrong didn’t make it through moderation.
Raw nerve?
I’ve tried editing the above to re-comment what didn’t make it through earlier. Hope you’ll publish.
You are new to the internet. Good luck sport
[NumbersGuy/ICD, stick to one pseudonym only, especially if you’re going to attack the author. Please also provide a valid email address for good faith. – ScarletMod]