‘Ordinary man hardest hit by tax’

Press, 19 August 1981, Page 12

‘Ordinary man hardest hit by tax’

PA Hastings The “ordinary, average man” has been hardest hit by National’s tax system, paying the highest rate of average marginal income tax in the world, according to Mr R. W. Prebble (Lab., Auckland Central). . Mr Prebble, Labour’s Shadow Minister of Social Welfare, said that he had done research to see if there was any other , country that taxed ordinary people at a higher rate.

He told a Hastings electorate meeting that the average New Zealand male ordinarytime worker paid 48 cents in the dollar as a marginal rate of income tax — the tax on the last dollar he earned. In Australia, the marginal rate for someone earning the same wages as the average New Zealander was 33.5 cents In the dollar, and the Australian could earn up to $16,000 before he went' into the next tax bracket. In the United Kingdom, Mr

Prebble said, a person earning the same wage as the average New Zealander paid 30 cents in the dollar.

Britain — “usually regarded as. a high income tax country” — kept its tax rate at 30 cents in the dollar until you reach the equivalent of $NZ25,000 a year.”

“In Denmark the income tax on the average New Zealand wage would be only 14.4 cents in the dollar — and they think their taxes are so high that they have an anti-tax party,” Mr Prebble said.

“Even in Sweden, which was once regarded as the highest tax country in the world, the worker earning the same wage as the aver-

age New Zealand man pays only 25 cents in the dollar.”

Mr Prebble said that New Zealand had the unenviable reputation of “being the only country in the world which taxes its people from the first dollar they earn.” He described present levels of income tax as “legalised piracy.” Wage and salary earners were seeing their standard of living falling because of the taxation burden. “The fact is the real income of wage and salary earners has fallen spectacularly under this National Government solely because of the high levels of income tax that wage and salary earners must pay.”

He said that National had shifted the burden away from the wealthy, for whom taxation was voluntary because of export rebates for companies which specialised in turning wealthy people into nominal exporters. "It is quite possible for a person with a real income of $lOO,OOO a year to pay no income tax at all.” he said.

“We have companies in New Zealand, such as Tasman Pulp and Paper, which earn more than $23 million in profits and pay no income tax at all. “It is ridiculous that New Zealand’s newspaper boys each pay more tax than New Zealand’s largest company."