Wealthy being subsidised, says M.P.

Press, 26 March 1981, Page 1

Wealthy being subsidised, says M.P.

PA Wellington The “mythical average New Zealander,” pays the highest rate of income tax in the world, according to the Labour member of Parliament for Auckland Central (Mr R. W. Prebble).

While New Zealand’s over-all tax take was not high by European standards, and its maximum income tax rate was relatively low, the income tax paid and the marginal rate of tax on average earnings were the “highest in the world,” Mr Prebble said, in an address to the Kelburn branch of the Labour Party last evening. “A person earning the average annual wage has, under this Government in the last five years, paid $9218 in income tax,” he said. I

“In real terms, income is 140 per cent higher than when P.A.Y.E. was first introduced. "The traumatic increase in average income tax is the result of a deliberate shift of the tax burden away from companies and the wealthy on to the average New Zealand family,” Mr Prebble said., “Today the wealthy have so many tax loopholes that income tax for them is essentially voluntary, and they need to be almost missionaries to pay it. Tax loopholes are so

extensive that it is possible, by organising a person’s business affairs, to claim as legitimate tax deductions, household expenses, clothing, overseas trips, cars, transport, and even yachts,” he said. “There are $lOO,OOO plus yachts in Westhaven (Auckland) today that have enabled their owners to reduce their income tax on a $20,000 a year income from $9500 ..to just over $5000.” He said New Zealand’s tax system was in need of radical reform so that all New Zealanders contributed to the cost of welfare, education, and health services.