Group of wealthy New Zealanders ask to be taxed more in open letter to Government

A group of wealthy New Zealanders are asking the Government to increase their taxes.

Ninety-seven more Kiwis have signed an open letter asking politicians to back a tax system that asks more from those who can afford it most. 

The group wants to mirror the likes of Scandinavian countries where tax rates are higher. 

One of the signatories of the letter, former Retirement Commissioner Dame Diana Crossan, said it would resolve a lot of New Zealand's dilemmas.

"What we're saying is, those who are comfortably off and financially comfortable, maybe at the top level of taxation, could pay some more," she told AM. "We pay much lower than most of the countries we want to be like."

A sobering report last month showed the wealthiest New Zealanders were paying taxes at half the rate of the average middle-class bracket. 

Revenue Minister David Parker.
Revenue Minister David Parker. Photo credit: Newshub.

The wealthiest 311 New Zealanders pay, on average, 8.9 percent tax on their income, the study by Inland Revenue found. A separate Treasury study estimated the average Kiwi paid 20.2 percent tax on their income.

While the reports spurred further political debate over whether New Zealand should introduce a wealth tax, Prime Minister Chris Hipkins has ruled out introducing any major tax changes in next week's Budget.  

'We want to pay more' 

In the letter, the signatories including actress Robyn Malcolm, businessman Sir Ian Taylor, Ecostore founder Malcolm Rands and Dame Diana, told the Government: "We want to pay more. As people leading financially comfortable lives, we might be expected to be anti-tax. But we recognise tax as a shared contribution to our collective success."

Dame Diana told AM "I'm not a tax expert" but wanted New Zealand to be "something like the Germans or the Netherlands", when asked by host Ryan Bridge how much more she wanted to pay.

Dame Diana Crossan.
Dame Diana Crossan. Photo credit: AM

In Germany, people who earn €277,826 (about NZ$479,000) or more pay a top tax rate of 45 percent. In comparison, the Netherlands' top income tax rate of nearly 50 percent kicks in far lower at €73,031 (NZ$126,000).  

New Zealand's top income tax rate is 39 percent on $180,000 and above. 

The World Bank in 2021 published an article urging countries to consider a wealth tax to help reduce inequality, replenish state coffers depleted by COVID-19 relief schemes and regain social trust.