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 empl
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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