Average tax burden low for NZ - OECD
The average tax burden for New Zealanders is among the lowest for OECD countries.
The Organisation for Economic Cooperation and Development, in its annual publication Taxing Wages, calculates a "tax wedge", which is the difference between an employer's labour costs and the net take-home pay for employees.
New Zealand had the largest wedge drop for single workers without children, at average earning levels, last year compared to 2008, falling 2.66 percentage points to 18.4 percent, the second lowest among the 30 OECD countries, with Mexico lowest on 15.3 percent.
Australia had a tax wedge of 26.7 percent, while Belgium was highest with 55.2 percent. The wedge takes into account social security and superannuation payments.
The Green Party is challenging the Government to justify a new round of income tax cuts, expected in next week's budget, in light of the report.
"This Government is proposing to cut taxes for upper income earners with the result that, all other things being equal, we will run a larger budget deficit and borrow more. Yet we already have some of the lowest income taxes in the OECD," co-leader Russel Norman said.
"New Zealand's position at the bottom of the tax wedge table is because we don't have compulsory superannuation and social security payments like a large majority of OECD countries," he said.
"The Government misleads people when it compares our headline tax rates with other countries without taking this into account."
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Comments and questions16
Russell - if you don't like it here bugger off back to Australia - we neither need you nor want you.
Fact is we pay too much tax as we have too big a Govt incl. our Social Welfare system. We'd be better off if there was a real tax incentive to invest in our future via superann.
You are right mike, we are second best. If we lower taxes a little more, we can be more like Mexico. Who needs living standards like Western Europe, we will have lower taxes!
The whole article is based on confusing the tax wedge with the total tax burden. Completely different things.
and the socialist just want more taxes and more state spending.
'Low' NZ taxes, relative to OECD, is like being fastest horse in the glue factory.
Why don't we look at previous times in NZ history, like when it was once prosperous and debt free and govt. was small part of GDP and we had no income tax??
Take a look, high taxes leads to a poorer nation, evidence is plain.
Are living stds in Western Europe better than ours cos' of higher taxes??
From what I've seen that isn't the case (well maybe in Mayfair) - the back streets of Manchester & Paris - i'd rather be here any day
You are right again Mike, I would rather be an average person in Mexico than an average person in the UK. You nailed it.
Drop Taxes: Obviously your socialist mother didn't teach you sarcasm is rude. She was probably too busy at the pokies. See what I did there?
The tax system needs work, just like your attempts at pithy sarcasm.
Russell whatever your name is...you and everything you say are irrelevant. Your response to anything 'notable' is to come up with some ill-informed, reactive and emotive dribble...much like your mate Phyllis Goof. Bring on the MMP referendum!
The OECD report is a load of rubbish. The 'creators' of the report should be sacked
It contradicts many other reports. What exactly is included in this 'tax wedge'? Other reports which take total tax collected show us paying high tax compared to other OECD countries. It is incorrect to assume that just because a government is 'supplying' a service, the tax payer has 'access' to the service (what I suspect this report is confusing). Also in NZ you need to understand who is paying by far the most tax. It is not the poor or middle class.
Mr Norman's comments seem self contradictory. Firstly he says that our taxes are so low so we do not need tax cuts.
Secondly, he says that the low tax number are illusory because it does not account for compulsory superannuation etc. This implies our real tax level is higher than the wedge value quoted. One might thereby conclude that the higher real tax invites tax reductions.
I am sure his original comments were not as flawed as that.
The real issue here is the "Lies, damned lies, and statistics". The tax wedge is just another number to confound us with.
I have no view on the quality of the report, but I do find OECD comparisons are used (selectively) as a means of substantiating a particular viewpoint. This of course implies that other OECD countries have got it right - fact is, they don't. All that we can aspire to with a tax regime is a broadbase system that stops all manner of tax avoidance - and frankly, I'm sick of people managing their affairs to simply reduce tax! Why so many of our rich-listers are not on the highest tax bracket beggars belief.
Average tax burden low for NZ - OECD | The National Business Review - New Zealand - business, markets, finance, politics, property, technology and more adley@gigemail.net
Average tax burden low for NZ - OECD | The National Business Review - New Zealand - business, markets, finance, politics, property, technology and more adrian@gigemail.net
Average tax burden low for NZ - OECD | The National Business Review - New Zealand - business, markets, finance, politics, property, technology and more guy@gigemail.net
Average tax burden low for NZ - OECD | The National Business Review - New Zealand - business, markets, finance, politics, property, technology and more adley@gigemail.net
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