The Greens have released a tax calculator which shows how much money New Zealanders will either receive under the party's new tax policy - or potentially pay through its proposed wealth tax.
The 'Income Guarantee' announced by the Green Party earlier this month includes a tax-free threshold of $10,000, adjustments to tax rates resulting in tax cuts for anyone earning under $125,000, changes to Working for Families, and an assurance every Kiwi's weekly income will never fall below $385.
That $11 billion package is paid for with a new tax on net wealth over $2 million, a 1.5 percent trust tax, and an increase to the corporate tax rate. There would also be a new top income tax rate of 45 percent on any income over $180,000.
The tax calculator released by the Greens on Thursday shows how much money a person would receive each week under its proposed settings. It also shows if someone would have to pay the wealth tax.
The tool accounts for whether someone owns a property or other major asset (as well as their value and if the person has a mortgage), the person's annual income, if they are studying or looking for work, whether they have children, and other information.
"This is such a simple way for people to see the life-changing impact our Income Guarantee would have on them and their whānau,” said Green Party co-leader Marama Davidson.
“We know there are thousands of people across Aotearoa struggling every day to afford the basics. Children are going to bed hungry; families are struggling to pay the rent or mortgage and keep their homes warm; and students are forced to skip meals to make ends meet."
Let's put some scenarios into the tax calculator:
- An employed person with no children, no property, and an annual income of $70,000 would receive $23 per week by paying less income tax
- An employed single parent with one three-year-old child earning a salary of $90,000 with a property valued at $890,000 and a mortgage of $100,000 would receive $111 per week from the Family Top-up and $21 per week by paying less income tax. They don't face a wealth tax as their net wealth is less than $2 million.
- An employed woman earning a salary of $100,000 with a property valued at $2.1 million and a mortgage of $200,000. This person would receive $17 per week through paying less income tax. They don't face a wealth tax as while the house is worth more than $2 million, the mortgage brings the net wealth below that threshold.
- An employed married mother earning $100,000 with a property valued at $2.1 million. Her husband earns a salary of $80,000. They have one child aged three. This person would receive $17 per week through paying less in income tax and also have to pay $2500 a year under the wealth tax.
- An employed man with a property valued at $2.5 million who has an annual income of $200,000. This person would pay an additional $83 a week in income tax and pay $12,500 per year under the wealth tax.
- A student who doesn't work and doesn't own property would receive $385 per week in support.
- An unemployed single father of a three-year-old child who doesn't own property would receive $520 per week in direct support and $215 per week through the Family Top-up
- A married father of a three-year-old child who doesn't own property and works part-time - earning $20,000 - while studying. His wife works and earns $65,000. This person would receive $259 per week in direct support, $128 per week in Family Top-up, and $16 per week through paying less income tax.
Davidson said the Greens' plan means 3.7 million New Zealanders will pay less tax. Only 0.7 percent of the wealthiest New Zealand will pay the wealth tax.
"But the money we can raise through the Wealth Tax will be enough to give everyone peace of mind that they can always afford the weekly shop, pay the rent, or cover unexpected costs – even when times are tough.
"The Green Party’s Income Guarantee is the right and compassionate thing to do to lift everyone out of poverty and set all families up to thrive from the start, while reprogramming our tax system in a way that means we can collect the resources we need from those most able to pay. The new tax calculator is a perfect way to show what it will mean in real life."
The proposal for a wealth tax has been criticised by National and ACT, who argued it is "envy-fuelled" and would "make New Zealand a poorer nation". Labour hasn't provided a view, wanting to wait until closer to the election when it releases its own tax policy.
