By Eric Frykberg
A group of prosperous people have penned an open letter to the Government saying they would like to pay more tax.
They say that would help fund better social services for the population of New Zealand as whole. They add it would help sustain the infrastructure that was essential for them to build their businesses in the first place.
Signatories include the rich lister Phillip Mills, who runs the fitness company, Les Mills, which was established by his Olympic athlete father.
Other businessmen to sign up include the IT and special effects man Ian Taylor and Malcolm Rands, who established the Ecostore company that produces renewable household and personal products.
Another signatory is the wealthy businessman turned Government critic, Rob Campbell. Also on the list is the actor Robyn Malcolm. The champion squash player and former race relations conciliator Susan Devoy is also on the list, which runs to 97 people.
The open letter has been released in the wake of findings by the Inland Revenue Department that 311 wealthy individuals and their families or trusts were paying about half the tax rate of most New Zealanders.
But the campaign was launched earlier, last November, by two non-government organisations, Tax Justice Aotearoa and Oxfam. It was intended to complement an international programme, Millionaires for Humanity, which was begun in Denmark.
In their open letter, the signatories said they're frustrated by how much, or rather how little, tax they pay.
"We want to pay more," they wrote.
"As people leading financially comfortable lives, we might be expected to be anti-tax. But we recognise tax as a shared contribution to our collective success.
"It funds everything from the teachers who give our children a great start, to the DOC rangers who look after our environment, through to the health care professionals on whom we all rely.
"Looking after each other is the mark of a civilised society, and tax is one way to pay for that."
The open letter went on to cite child poverty and the cost it imposes on the tax system. It also stressed the role of tax in creating infrastructure which commerce depends on. (The full list of signatories is here).
"Some of us have built businesses from scratch and celebrate profit when it serves the public good. But we know that in our working lives, we have benefited from the infrastructure paid for by the taxes of past generations.
"We want the roads, the hospitals, the schools. We want to pay that forward, to replenish the collective pool of resources from which we have drawn."
The campaign authors stress they are campaigning on principle, not for particular tax reforms. Although they have sympathy for a capital gains tax, they are nor fighting for that specifically, nor for any other so-called progressive tax, such as a wealth tax, an inheritance tax or a transactions tax.
'Those who are worth more should pay more'
Mills is one signatory who quite likes capital gains tax but his main motivation is ethics, not detail.
"Does anyone in this country really want to have a massive wealth gap, with children living in poverty?
"I think if one part of society is worse of then we are all worse off."
Mills, who is 68, said too many years were focused on cutting taxes, and he personally was happy when the top tax rates were higher than they are now. He is a rich lister who confirms published estimates of his wealth at $250 million dollars, and thinks his tax rate should be higher than it is.
"Those who are worth more should pay more."
Another businessman to support this argument is the 68-year-old Rands.
"I often say to some of my other rich list friends, 'Boy, I would love to be paying $2 million a year in tax, because imagine how much money that would mean I am making.'
"I actually see it as a privilege and service to New Zealand to be paying tax, so I don't see it as a burden, I see it as a contribution."
Asked how much money he was paying now, Rands said it was exactly his share, it was just how much money the Government said he should pay.
"What I should pay, I do pay. I have investments on which I pay tax and I still do work."
Rands will not say how much money he earns, but he was "definitely" in the 39 cents in the dollar tax bracket, which means he earns more than $180,000 a year.
Like Mills, Rands says he is not proposing any particular tax reform, he is just supporting the principle of a fairer tax system.
Diana Crossan, a former high level public servant and ex-Retirement Commissioner, is a spokesperson for the campaign is. She said the New Zealand tax system doesn't collect enough money.
"We collect in our taxes somewhere around 32% of GDP and in European countries, Germany for example, it is 38%, the Netherlands 40%.
"We just don't pay the same amount of taxes as they do in other countries and we expect to have the same health system, and the same roads, the same clear rivers, the same housing and so on."
Seymour & Robertson weigh in
Many politicians are expected to support this argument, but the Act leader David Seymour is not one of them.
"It has always been such a lame, humble brag, 'I'm so rich I want to pay more tax'," he said.
"You know what, if they want to help other people, they could very happily put their own hand in their own pockets right now. Just because they are wealthy does not mean they know more about (tax) policies.
"It does mean they have got the ability to help others should they choose. The fact that they are not doing that and trying to make a statement about how rich they are tells you a little bit about them quite frankly."
However the finance minister Grant Robertson had a different view. Without commenting directly on the open letter, he made clear his support for a tax system with integrity, and he opened the door to reforms.
"Tax revenue is vital to ensuring we can provide the services that we all need," he said.
"I support a tax system which is fair to all New Zealanders. There is always room for improvement to make that a reality. As the Prime Minister has already said, there will be no major tax changes in the budget. All parties, including Labour, will have the chance to take their tax policies into the election."
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