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Inland Revenue estimates the average 'high wealth individual' in New Zealand pays 12% tax on all their income, including non-taxable capital gains

Inland Revenue estimates the average 'high wealth individual' in New Zealand pays 12% tax on all their income, including non-taxable capital gains
Image sourced from PIXNIO

The Inland Revenue Department (IRD) estimates the average “high wealth individual” pays 12% tax on their “economic income”.

“Economic income” includes both taxable and non-taxable income, including capital gains.

Of the sample of people IRD describes as “high wealth individuals”, it estimates 42% pay less than 10% tax on their economic income.

That’s lower than the 10.5% rate for the country’s lowest income tax bracket.

IRD’s maths was presented in a January 2020 report. It was referred to in a Treasury briefing obtained by interest.co.nz under the Official Information Act.

Treasury noted high wealth individuals could be paying less tax because of their sources of income (eg capital gains), the use of imputation credits, or the use of loss carry forwards.

“As nearly 80% of the tax paid by these HWIs [high wealth individuals] was corporate tax, the timing of imputation credits and loss carry forwards is likely to explain the large variability in effective rates,” Treasury said.

The Treasury briefing was prepared for government ministers in August 2020, following the then-Associate Finance Minister (who’s now Revenue Minister), David Parker, requesting officials look at better ways of estimating wealth distribution.

Because Treasury only referenced IRD’s research by way of background, it didn’t provide too many details, including how someone qualified as a “high wealth individual”, in its estimates. Interest.co.nz hasn’t seen a copy of the original IRD report either.

However Treasury cautioned IRD’s estimates were “highly variable and subject to data quality limitations”.

Treasury wrote the briefing because Parker was concerned Statistics New Zealand’s Household Economic Survey (HES) – the same survey used to compile the child poverty statistics – underestimated the wealth of the country’s wealthiest people.

Treasury explained: “Collecting data on the very wealthy (e.g. the top wealth percentiles) is a challenge because of response rates, sample size and accurate self-reporting of sensitive information.

“This challenge is not unique to HES and it occurs in many countries.”

Treasury noted 2018 HES data showed the wealthiest 10% of individuals had 59% of the country’s wealth. Meanwhile the wealthiest 1% had 20%.

Trying to figure out the same distribution using tax data, rather than HES responses, Treasury estimated the wealthiest 10% of individuals could hold as much as 70% of the country’s wealth. And the wealthiest 1% could account for 25%.

But it concluded this maths was just experimental and could under or over-estimate the situation.

As for April 1, a new top income tax rate of 39% for income over $180,000 will become effective.

Finance Minister Grant Robertson is also considering whether or not to extend the bright-line test beyond five years. This would require investors who buy and sell residential property within a potentially longer timeframe than five years, to pay income tax on any gains made.

IRD can’t say how much tax it has collected thanks to the bright-line test, as these tax payments are lumped in with income tax payments from other sources, like PAYE (pay as you earn).

It recently started monitoring bright-line compliance more closely.

Labour before the 2020 election ruled out introducing a wealth tax, as advocated for by the Greens. 

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88 Comments

Says it all.

19
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In NZ the richer you are the easier it is to avoid tax.
There is an army of accountants whose sole job is to find ways of not paying tax for the wealthy
Employees have to pay tax before they are paid
Taxation in NZ is a very unfair system

18
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Unfair tax system, broken markets and oligopolies, neoliberal parties on the left and right protecting the asset-rich while tinkering with useless policies - sounds like NZ has a more in common with the US than any other nation in the Anglosphere.

16
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The real elephant in the room is that it doesn't matter if we gave the government 100% of our gross pay - they're doing such a rubbish job at spending our tax dollars the amount of taxation and on who is a smoke and mirrors side show. It's an exercise in getting us to point fingers at each other rather than think about their track record on health, education and housing.

If you want to go and visit a place where people aren't giving their fair share, go into any government department in Wellington. Over paid, under worked professional meeting havers the lot of them.

Yeah - one party beefs up bureaucracy during their reign while the other forces bureaucrats out of their permanent jobs only to hire them back as consultants or contractors.

28
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This is mischievous.

The wealthy pay the bulk of the total income tax take.

The wealthy pay the rate of tax they legally should, including obviously the highest rates, on their 'taxable' income, as everyone does (remember the 28% corporate tax rate is at best just a timing deferral available to everybody with a company).

But yes, as this spurious fact used to put the boot into the wealthy under the Government of Envy (and the reporters of same), when you include the increases in value of their capital assets, you get a lower rate. But same would apply to me and everybody else who owns their own home, for starters.

So, this is just another article saying there's no capital gains tax. Advocate for that if you must, but don't use it like this to demonise those who've got off their bums, taken risk, and made a buck (paying lots of tax along the way).

I really am worried about where NZ is heading.

28
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Ahh yes, such hard work, using tax free capital gains on property purchased a long time ago, to leverage equity into buying more houses.

I know plenty of people who have had trusts setup for years to avoid taxation. It's unfair and just because it's legal doesn't means it's just.

18
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Try reading what I wrote, rather than what you wanted me to say so you could put your unrelated points up.

Regarding Trusts, pre 1 April coming, the trustee tax rate is the highest tax rate and the minor beneficiary tax rule stops income going to low minor rates of tax.

And forget tax, countries with capital gains taxes all have housing bubbles: that and all asset bubbles have come from stimulunatic monetary policy which I have no agreement with whatsoever.

But my point was bring in a capital gains tax if you must, but don't frame facts like this to demonise a group who are doing nothing wrong. Read my post.

A capital gains tax is more that just a tool to try and stem housing inflation; it broadens the tax base, is fair and ultimately the revenue it generates can be used to fund core services.

You might be right but what also cannot be denied, on recent form any government of any hue, the more tax they get, ie other people’s money, the more they squander. It is a self defeating spiral of ineptitude and vainglorious personal ambitions. Local councils too, are obviously perfect examples. Why else has just about every council been compounding rate increases, well over the annual rate of inflation, and now being found out with severe deficiencies to water supply, sewerage, roading, transport etc etc. Has not been much spending to see there, of the burgeoning rates income, on “core” services has there?

A capital gains tax is not going to do much to solve the problems people think it will. The people getting rich of property aren’t selling houses, they are buying them. You don’t get a portfolio of 25 houses by selling selling houses. The tax will only hurt people that have to sell.

There are other forms of capital gains than houses. Recent experience: sold for $1.5m a business making $500k per year. If the business had been kept, as owners would be paying income tax on the $500k per year. By selling the business made $1.5m tax free.
No need for family trusts. Nothing to do with expensive accountants. No tax avoidance involved. Just the law in this country.
I agree with Mark Hubbard. The country needs a capital gains or wealth tax, and to correspondigly lower income tax, for fairness reasons.

Well, actually, I don't want a capital gains tax, but I agree with most of your comment otherwise, Antz :)

The reason I don't want a capital gains tax is because every asset I have I worked for and was paid out of taxed income (my parents were poor). So I have paid a lot of tax. So I can retire and do some of the many things I really want to do with my life, I want a break on my capital assets, coz if they go capital gains taxes now lower income taxes that will be at just the time my income will be going down and I'll be taxed on the assets I've saved for. Worst of all worlds for me.

But of course we're both wrong: we're actually heading for capital gains taxes AND higher income taxes over next two decades. Which will sadly slow up any recovery out of the Covid mess and the debt from monetary stimulunacy.

Ok. Tell us how you paid for the capital gains?

Everyone pays income tax. That's not special.

Read my comment.

And philosophically I am absolutely against everything being taxed. I want a small state, low tax, free society. Tax slows economies, invades privacy, and is used to incentivise wilful idleness way too much.

11
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I read your comment. It detailed how you paid for the original assets and their value, but not the capital gains.

None of us want to pay tax but we do expect stable society and services when we need them. Thus, we need a balance of fair taxes.

Certainly the preferential treatment for asset wealth gains vs. productive enterprise is encouraging wilful idleness in NZ far too much. Hence our low productivity, falling behind other countries where hard work is more incentivised vs. occupying assets.

What is a fair balance? I take it by that you think everyone should be paying a reasonable share?

If you have a house and want to move. The house is worth $1m freehold and you bought it for $350k 15 years ago. On paper you have made $650k buy in reality you have what you always had. If you buy a house in another suburb for $1m have you really made any money? Why should you pay tax on the $650k

I want some form of CGT, more than it is at present. (brightline test) Why should I pay unrealised capital gains (or the DDD ) on many of certain types of shares.? ...." because every asset I have I worked for and was paid out of taxed income (my parents were poor). So I have paid a lot of tax.".... So have I except I've directed to shares instead of residential housing. Many on this website don't realise there should be as far as possible a level playing field for investment decisions. Its not specifically to raise additional revenue. Labour of course see this more in that light than an investment decision exercise. National just want to support the rentier class and feather their own nests and Labour are not too far off that either.

Which is why the better tax regime would incentivise private savings, taking away the need for a state pension, by taking tax off all investment investment: so you even the field by not taxing capital gains on property, etc, AND by not taxing dividend and interest income.

Via that we also get a small state and freer lives.

Totally agree. In the US IRA Roth (individual retirement accounts) exist, where someone can build savings/share portfolios with the aim of self-funding retirement. In NZ savers are penalised.

An ideology that has never worked for society anywhere, ever.

An ideology that has never worked for society anywhere, ever.

So tell me if everyone had your selfish attitude do you think society would be at all progressive? I paid back a $70k student loan despite prior generations getting free education; should I bemoan that fact or just realise that fees free education is no longer sustainable. I’m going to be taxed at 39% come the 1st April; should I get angry about that or should I just accept that we have a progressive income tax system that allows for the less fortunate to live?

I don't want a progressive (socialist) society: that's a prison of each other. I want a free and prosperous society where you are responsible for yourself and your family. And no government has a right to force me into any other authoritarian regime.

Re the less fortunate, we use welfare to make them now. Don't go thinking you have some sort of moral superiority because you want the government to take my earnings to fund the dreadful life decisions incentivised by welfare.

Unfortunately in New Zealand right now we have a centrist mix: socialism for the old folks and capitalism for the young ones. Over 50% of our welfare is spent on a pension regardless of wealth, and we use welfare to enable lower wages and higher rental yields. Too much dependency in those areas. But younger generations are asked to fund more and more for everything: education, housing etc.

It's all a bit perverse and out of kilter.

Yeah well I'll be looking after myself and my wife :)

Although I agree with much of your comment, Rick, vis a vis:

Govt super should be income and asset tested again, certainly. And stop taxing all investment income for all, which will help the young save better for their retirements.

Yes, Working for Families subsidises employers and I think govts paying people to have children, whether WFF or DPB, is all the wrong incentives. We need to stop that.

Agree again re asset testing for super. As far as investment income, also believe it shouldn't be taxed.

I think that we need to distinguish between two profoundly different categories of wealthy groups:
- the genuine business entrepreneurs, who take risks, work hard in the real economy, employ people and produce real wealth. They fully deserve any success they get, and if their business gets capital gains because of their success, good on them
- the non-productive, parasitic housing specuvestors, whose effects to the society and real economy are predominantly negative. Any form of capital gain, in this case, should be taxed to the last dollar, with no exception.

The facts are right in front of you

Yes, when I read the Stuff version of this article i largely thought similar thoughts Mark. Indeed I remembered an earlier article about Elon Musk loosing $15.9 billion over two days as a result of a fall in the price of Tesla shares. In my view, he did not 'lose' that money, but rather his capital value was revalued. Capital gains is NOT taxable income, but the question must be asked; how, do we identify and measure REALISED income, that would be liable for tax?

Agreed - one of the items mentioned was the use of imputation credits to reduce tax bill. Imputation credits represent tax already paid on income, so hardly a fair comparison.

I can't even figure out how imputation credits were relevant to the shameful framing of the rich as tax avoiders here. Everyone gets to use imputation credits: they simply, fairly, avoid the same income being taxed twice.

New Zealand is heading for pitchforks however I propose the solution is we tax the poor even more so they cannot afford to buy a pitchfork.

What do you mean? The poor get all their tax back and more, via benefits.

"I really am worried about where NZ is heading."

Say Wot?
Just yesterday you were saying that the Youth had opportunities you couldn't dream of ?
Im confused
Are you worried we are no demonising the hard working slumlorders who these youth should aspire to be?

As for the "wealthy"
Passive income flows wont hold in a shrinking Pie world.

My most oft comment: you need to read all my comments again.

20
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Can we just bring in a land tax already?

I have a family member sitting on 80 properties. All paid for by the previous one's capital gains. The total amount of cash he's in for, is just his initial deposit on the first house.

He's playing the long game, no intention of selling within 5 years ( so no bright line).

Bought early 2000's for 150k on one place. Renting for $950 a week. He spends more money on his accountants than he pays in tax. Hasn't worked since 26.

#the new kiwi dream

It is called an envy tax. Anyone who uses their nouse gets villified by those with Green eyes. Why did i not think of that. give me something for nothing mentality

17
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Which tax do you not class as an envy tax?

Correct.

If talking "envy tax" then income tax is merely a tax levied upon those who have the skills and education to make high incomes, by those who have lucked into affordable assets by virtue of being born earlier but cannot compete on the job market. We need to reduce these envy taxes on the more skilled and educated members of our society.

A carbon tax isn’t an envy tax. GST isn’t an envy tax, just to name a couple.

You could argue either of those are envy taxes using the same logic that taxing the rich is envious.

I'm self employed and receive a GST bill every 6 months. Why should I charge/pay 15% tax for my services? You're just envious of me, because I worked hard to be able to produce a desirable service. Same logic.

Your comment doesn't address the facts above. The something for nothing mentality applies to those not paying tax

40
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We have to stop speaking about each other and the issues we face this way. Taxing wealth is not an envy tax, it's about recognising that after a certain level, wealth infers so much privilege as to be enable the wealthy to rig the game. Much like when a company gets big enough, they become a monopoly, which then infers a unfair advantage to rig the game (i'm looking at you Facebook, Amazon and Google). Wealth taxes are about ameliorating the negative effects of some of that privilege, because actually, wealth intensified in the hands of a small percentage of people is NOT productive.

Think of humanity as a resource, when we support at a certain standard of living, education and opportunity to the maximum number of people, we are amplifying the odds of nurturing another genius. Someone who might cure cancer, invent a new clean energy tech, or some other novel idea to benefit us all. Humanity thrives when we all experience a basic level of health, education, equality and dignity. When the poor are wretched, it isn't good for the wealthy either because it inevitably leads to civil unrest. When younger generations have no stake in their society or lose hope in the future, societies crumble and decay. Worse still they burn.

Infinite resources and wealth do not exist.We have a finite planet, that we need to share. That is the reality. Yes we are also human beings who covet each others things and envy does exist. So does merit, regardless of equality of opportunity, some will always be more talented or intelligent. However, if we keep letting wealth go the way of google, facebook etc, concentrated in the hands of fewer and fewer people, becoming increasingly hereditary, we are stealing from the future, we are thwarting our own potential. It's so short sighted. Your own personal hoarded wealth cannot buy you a healthy, thriving society. Who wants wealth when the world around you is rioting and burning?

I am wealthy. Some of it luck, some hardwork. But even though I run a company, I pay myself in PAYE, because I want to contribute my fair share and I don't believe it's ethical to hoard money at the expense of my duty to the society I am part of. I also only own one house, even though I own my house outright and could easily leverage it to buy multiple rental properties. Why? because I am an ethical person and FOR THE LOVE OF GOD, MONEY BEYOND A CERTAIN LEVEL DOES NOT MAKE YOU ANY HAPPIER. Pay your taxes people. Stop hoarding houses.

12
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THANK YOU! This is my vote for comment of the year.

An interesting comparison with all this is to compare it with poor people buying lotto tickets. Which is aspirational. If they were to win, they would have more wealth than most people in NZ. Essentially taking money from a lot of poor people and putting it into their own pocket. This is human nature. To get ahead at the expense of others. Life is competitive. You get the trophy wife/ toy boy.
Like you I prefer to work and to practice austerity.
Disclaimer: I have never bought a lotto ticket in my life (I wouldn't know how to), nor raffle ticket, nor gambled. It all just feels wrong to me.

Yeah nah.
I guess that's my problem. I've never want to "get ahead at the expense of others".

Unfortunately anyone at or near the top got there at the expense of others. Pretty sure if you asked anyone in the street right up to Mark Zuckerberg the answer would be the same, they did it with their own hard work. Your battling human nature on this one and anyone you affected is out of sight and out of mind so your never really accountable and have no guilty complex. Its a competitive world and its only going to get worse.

All life is competitive but plenty of species have evolved to cooperate, because that cooperation, ultimately ensures the wider survival and success of their genes/species. Human beings, since our earliest steps, had this at the core of our survival strength. Yes we have other instincts too but we didn't evolve such advanced skills in communication so that we could climb over each other. We have far less muscle than other primates or the even remotely comparably brain sized mammals, we are lovers not fighters! We evolved to be tribes and communities. To collaborate and specialise, for the betterment of the wider community and gene pool. Whilst we also have the strong instincts to status signalling and hierarchy, we have and can overcome this with how we construct and maintain our codes of moral and social narratives. We even created entire religions to help us do exactly that (with mixed results haha)

Politically, I am a centrist. There have been times when the political left has been taken too far and times when the political right has been taken too far. And there are times when we need a little more left or a little more right. A little more progressiveness or a little more conservatism. I refuse to wed myself to one ideology or another, when the world is ever changing with unintended consequences and fat tails. There is nothing wrong with acknowledging our inner demons but aspiring to be led by our better angels. It is what we have always done and at no time in history has the inner demons of greed and hoarding, ever ended well for anyone. Whereas, the eras where the cultural milieu was set by our better angels are the ones we look on as enlightened and prosperous.

How we evolved in groups of 50-100 was to form a hierarchy, probably with something fairly meritocratic underpining the choice of those in leadership positions. It would have to have been meritocratic because if you failed as a leader your tribe died. So yes, there was competition, but undoubtedly also negotiated social networks and above all, responsibilities. Wealth and status was always associated with the responsibility of leadership to the community and in protecting the tribe. Now you have extreme concentrated wealth with zero responsibility. The world's top 5% do whatever the hell they please with no responsibility to anyone. Even in the days of monarchy, if your monarch showed no responsibility to their subjects and failed as leaders, they'd eventually get their head chopped off! Whenever you have too much concentrated wealth, that eventually becomes concentrated power and if that wealth and power has no sense of duty or responsibility things get ugly.

"The world's top 5% do whatever the hell they please with no responsibility to anyone."

Funny you mention the world's top 5%, as that would include a big chunk of interest.co.nz readers.

From Credit Suisse Global wealth report:
Top 10%: Net wealth over US $109K
Top 1%: Net wealth over US $936K
It's hard to find stats for the top 5%. It'd guess about US $350K

Great comment

Wonderful comment. completely agree with you. with this rate, in future their would be a monarchy in NZ (smaller countries are easier to conquer than large countries like US). we will have a king (the richest person in NZ).
If we don't learn from the history we are bound to repeat it. So, i believe, no matter how much we chat here, the change will only come from revolution. And for revolution, things have to get much worse from what we have now.

I wish we have laws to make people pay their fair share. No one will pay taxes out of goodness.

we wish we have good leaders (politicians). but politicians come from the society and they reflect the values of a society. look at older societies such as China, India, etc. and you'd know what i'm talking about. NZ is also heading in that direction.

By that reasoning we should cease all benefits in anz because there are humans in Africa who could be educated for less (meaning more humans get educated for the same resource cost), in order to maximise humanity’s chances of nurturing another genius?

sad001 why do you have to be so patently obtuse and derisory? Most Western countries do give a great deal of aid to less wealthy countries both via government contributions, refugee programmes but also via charity and NGO's at a private level. And over the last 100 years, more children than ever before have been educated and survived childhood. Our booming global population is evidence of exactly that (blessing and a curse).

However, we live in a democracy, we have no lever or legal ability to influence other countries and what they choose to do with their money, we can't even really control the money that we send in aid (much is lost to local corruption). We do, however, have the legal and political right to direct fiscal policy in our own country for our own fellow citizens.

You just reframed your scope from what is best for humanity to what is best for our country, buy why stop at the national level? Why not have everyone make decisions that are optimal for their families with the government tasked primarily with ensuring law & order. Families may then via charitable endeavours help their neighbours. At present much of our taxes are lost to bureaucracy (corruption?) and a significant amount of it is redistributed to those who use their government handouts to fund illegal drug trade and violent criminal gangs (worse than corruption?)

We have to stop at a national level because we don't have legal or governmental rights over other countries. Unless you are suggesting we have a global government?

We get to choose our governments in democratic countries. There will always some be some level of inefficiency, corruption and waste in any government structure (democratic or not) but for all the thousands of years of human history, which system has ever worked better to deliver peace, health, prosperity and stability to it's population? No seriously tell me. You want to bag on paying taxes and the democratically elected governments (who are never perfect) but are responsible for spending that collective money, but where is evidence of any society ever that has worked better? The issue is, that when wealth concentrates in the hands of fewer and fewer, politics becomes *more* corrupt, not less, individual families end up having too much power and influence and before you know it.... hello feudalism. Feudalism is what happens eventually if there is no wealth redistribution. The countries that abolished feudalism last, were absolutely, without question, the least efficient, least productive and poorest. I suggest you look at the history of feudalism up until the 1830's.

But please show me this utopia in history, where families were left to decide how they distributed all their wealth, whilst at the same time, being able to stack the deck in their own favour, until they have more than can ever be spent and just waste all those resources on their own whims, whilst the rest of society lives in squalor? Or do you wish to go back to the days when there was no governments at all? They tried laissez faire governance during the in 17th, 18th and 19th century Europe and rather a lot of the wealthy were murdered by rioting crowds, in between the wars and also the famines. IT DIDN'T WORK.

Are you advocating that we return to some sort of pre-civilization tribal society??

I think you've amply identified why libertarianism isn't able to get past the free rider problem.

Hallelujah! Brilliant comment

The notion that a wealth tax or a capital gains tax is an envy tax is disputable. If someone draws an income from realized capital assets, frankly, that is income - not taxing this form of income is a specific exclusion within the tax system that distorts the overall economy in a manner that benefits the wealthy. If someone has a significant amount of wealth, then it is the economic impact of society itself that drives that growth in wealth. Assuming advocacy of such taxes is a "give me something for nothing mentality" assumes that wealthy people are not impacted by the economy, as if they are unique and isolated. Their wealth is given to them by society itself.

imhenry,

Is that nous-without an e- or house-with an e?

What is you rview of tax havens? Are those trying to get rid of them motivated by envy or a desire to see a fairer world?

Leveraged up the wazoo no doubt.

What we need is a 40% drop to clean out the dead wood.

Happened in '74 (inflation adjusted) will happen again...

This is a good example of 'realised' income. Your Relly has realised the value change of an asset and used that change to provide finance for another asset. This is where it should be taxed. For example purchased for $150k change in value to $200K , mortgaged to $130k, used $80K to support purchase of another property. That $50K value is being realised, and should be taxable at that point. How to capture that is the question?

The reality is people with money and resources will always dedicate energy to reducing tax exposure within the bounds of the law. Why wouldn't you? The government should focus on fixing the property rort, before getting caught up in this sort of fools errand. Clever rich people will always find ways to avoid tax. If they can't, they'll just avoid nz altogether.

Is this justification for a tax hike on the middle class?
I think most people know that if your a business then you're taxable income is lower anyway through deductibles... i.e. you earn $100K but your business expenses are $70K, therefore your actual taxable income is $30K and you get taxed 30% on the $30K which is ~$9.8K so effectively your tax rate is <10% overall

Very few people get wealthy through being an employee, and are taxed at the highest tax rates with next to no deductiblesbeen designed into the system for over
This is a bit of a meaningless article, as it is just highlighting the gaps that have been in the system for >100+ years

it appears like it is just false evidence to justify changing something in the tax code

The idea that an increase in taxation will reduce investment is dubious at best, and may be outright false. NZ has one of the highest corporate tax rates, and a now relatively high income tax. However, we are also the easiest place in the world to do business, with a strong economic outlook, low unemployment and high levels of international investment. As an example, would you rather make $100m at 40% tax, or $50m at 20% tax? So long as economic growth and investment opportunities are strong, the tax rates become somewhat irrelevant.

A land tax would actually spur development increasing housing and tenancy space supply as it pressurises efficient and productive occupation of land... Plus it's unavoidable, and very progressive.

Its a stretch to say this.

And it has a successful track record in getting land into the hands of more average Kiwis in our past.

Maybe, in a world where we didn't import as many new Kiwis and keep wages down in the process.

the average high wealth individual on 12% rate would include politicians,maybe time to see the tax paid rather than a register of assets owned.

'80% of the tax paid by these HWIs [high wealth individuals] was corporate tax'. Given companies and other entities pay corporate tax this is criticism of the integrity of the corporate tax regime, notably the ability to manage distributions to maximise tax efficiency, rather than the takedown of personal tax avoiding HNW individuals it purports to be. Including capital gains for the group under scrutiny and not doing so for the comparator group demonstrates a lack of integrity.

https://www.interest.co.nz/opinion/95880/nz-initiative-report-suggests-o...

Size and direction of govt spending a tragedy. More tax not the answer. Will worsen the social issues

Only those of the rich.

Very poor quality highly academic report which uses the terms 'experimental' 'estimated' 'unknown' throughout. It is clear the government wants to work out people's wealth but have no idea how to go about it, due to individuals not personally holding assets. Referring to the NBR rich list like it is a valid source of information for IRD to work with, is ludicrous. Some of the rich list is pure speculation and there are plenty of people who should be on it, but avoid it. Including unrealised capital gains, and ignoring imputation credits paid is completely inconsistent with our tax system. Rubbish report which will be used as government PR for reducing inequality, by taxing wealth. Good luck with wealth taxes. The only winners will be the tax and valuation consultants.

The wealthy use housing as a store of value, which happens to be the least taxed asset if you want to invest.

Its worse than that
They use it as a leveraging tool to acquire more housing/ land to passively become wealthier
History shows that any downside risk didnt exist - no one Govt wanted to disturb the easy growth Ponzi

In my experience it is the middle class that own one or two residential rental properties. The really wealthy invest in commercial enterprises which can include manufacturing, agricultural land holdings and commercial real estate.

''a new top income tax rate of 39% for income over $180,000'' . What a joke, the wealthy don't pay income tax, that's why they have such low rates of tax. They build assets and use those as leverage to acquire more assets.
This tax hike is purely for show and demonstrates just how after removed from reality Labour is. This is in fact a tax on households and the role of parents in bringing up their children as a recognized job. If 2 people in a household earn $175k each they don't get taxed on this rate, but we tax a husband's income who is the sole income earner whilst his wife manages the children and household (or vice versa). In Germany households are taxed as a household to reflect and support the important role of raising children by one parent. All this tax does is pile more pressure on the mortgage payments in a hugely inflated housing market, whilst the wealthy as mentioned in this article rub their hands with glee.
Jacinda is a smiling assassin. What a terrible thing to do to families as a token ''tax on the rich''.

The govt will never allow income splitting as it would discourage women’s workforce participation.

Wanted: How much is the highest amount (absolute $) of tax paid by an individual in NZ. And who?

It’s irrelevant as investors leave income in their company entities where it is taxed at 28% . They sometimes distribute it to the individuals by dividend income but it can be years after it was returned in the company tax return. Or they just leave it in PIES. So you are really asking who is the highest paid employee in NZ? Likely the highest paid CEO would pay the most individual tax. Taxing the wealthy is not going to be simple as they don’t personally own much.

Just looking and LOLing at all the comments here and on other platforms calling for more taxes...the Govt have done a stellar job conning the general public into advocating for more tax instead of less...maybe they are much smarter than we think...

"Great Minds Discuss Ideas; Average Minds Discuss Events; Small Minds Discuss People." - Eleanor Roosevelt

If you were to consider the subsidies given to the lower middle, working class and those who are on full time benefits, the "wealthiest" doesn't have the lowest tax rate and the middle class actually bore the brunt for the highest.

Every time I read something that is berating the rich, to me it is nothing more than gossips stemming from envy.

Margaret Thatcher was right when she saw a looming problem in the UK.

"The problem with socialism is that you eventually run out of other peoples' money." - Margaret Thatcher

Don't be surprised, how many of them politicians, RBNZ crews & Bankers. I'm sure close to 99.99%
You don't need military dictatorship, to start thinking of doing an organised roll over, prolonged... work strike. In every facets on NZ working/studying/productions life. NZ? not worth it.

There is a real problem in the New Zealand public service with officials simply telling Ministers what they want to hear. Treasury and the IRD going along with Parker’s fiction that unrealised capital gains are income is a prime example. This sort of report is a great way to deflect from the problems that this government has helped create and doesn’t know how to solve. To complete the circle, one of the main reasons the government doesn’t know how to solve problems is that officials only tell them what they want to hear. Wellington is an echo chamber, and major media outlets are the walls.

The Govt, RBNZ, Treasury.. all combined only have two Phd's at the top, one of them in Geography.
For C19, listened to the educated science scholar, for economy?.. only listen to those with vested interest.
Here's a good reading though:
https://www.stuff.co.nz/business/opinion-analysis/300242940/wide-cgt-inc...