Tuesday, 15 June 2004

Copeland pushes income splitting to help families

United Future’s revenue spokesman Gordon Copeland today urged Parliament to take a serious look at splitting household income for tax purposes as an additional way of helping middle and upper-income New Zealand families.

Speaking during the Budget debate, Mr Copeland praised the Budget for helping to lift hundreds of thousands of New Zealand children out of poverty.

But he then produced figures to show that single-income, two-parent families with children would be helped even more if the parents were able to split their income for tax purposes.

One-Income, two- parent family with two young children living in south or west Auckland or Wellington City

INCOME SPLITTING
Gross Income
$ 38,000
$ 60,000
$60,000
Income Tax
- $7,410
-$14,670
- $11,700
ACC levy
- $ 456
- $720
- $720
Family assistance
+ $7,198
+ $598
+ $598
Accommodation supplement
+ $5,528
+ $28
+ $ 28
Net Income
$ 42,860
$ 45,236
$48,206
DIFFERENCE

+ $2,376
+ $5,346

One-income, two-parent family with three young children living in Central Auckland

INCOME SPLITTING
Gross Income
$38,000
$70,000
$70,000
Income Tax
- $7,410
-$18,570
-$13,650
ACC levy
- $456
- $840
- $ 840
Family assistance
+$10,162
+ $562
+ $562
Accommodation supplement
+ $8,648
+ $648
+ $648
Net Income
$48,944
$51,800
$56,720
DIFFERENCE

+ $2,856
+ $7,776

Mr Copeland also urged the Government to adjust the tax brackets in line with inflation to preserve the buying power of New Zealand families’ incomes.

ENDS

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