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How come the PM only pays 2.8% of his income in tax

Published: Mon 8 Sep 2014 09:41 AM
How come the PM only pays 2.8% of his income in tax
MANA Leader and Member of Parliament for Te Tai Tokerau Hone Harawira
Monday 8th September
“Before John Key talks about the piddling tax cuts he plans for low and middle income families today he needs to explain why he only pays 2.8% of his income on tax while a minimum wage worker pays 28% tax,” says MANA Movement leader Hone Harawira.
“How is it that workers are paying tax rates ten times higher than the Prime Minister?”
“If we all paid just 2.8% tax the country would collapse, so how does the PM get away with it?”
“Why are the likes of cleaners, fast-food workers, hotel workers, hospital staff and security guards all heavily subsidising the lifestyles of the super-rich?”
Last week our Economic Justice spokesperson John Minto explained how heavily rigged the tax system is against working New Zealanders and their families.
The minimum wage worker on 40 hours per week earns $29,640 and pays $4,207 in income tax and $4,149.60 in GST giving a total tax of $8,356.60 or 28% of income.
On the other hand the Prime Minister earns $428,000 from his PM’s salary along with this year’s $5,000,000 increase in his wealth (according to NBR’s rich list) which gives him a total income of $5,428,000. On this total income he pays just $132,160 in income tax and approximately $21,400 in GST giving a total tax of $153,560 or 2.8% of income.
This is a national embarrassment. Those least able to pay are under a heavy tax burden while the super-rich pay peanuts.
The National government and its attack bloggers refer to the working poor as scum, bludgers and ferals, but it’s clear the real problem is with the top 1% of income earners who get all the benefits of taxpayer funded facilities and services but don’t pull their weight paying for them.
No wonder inequality is out of control.
The problem is we have two sets of tax rates - one for the super-rich and another one for workers and their families.
John Key will say that Working for Families helps redistribute tax to low income families but a minimum wage worker with no dependants won’t qualify for Working for Families anyway but still pays 28% of their income in tax.
MANA is campaigning for an overhaul of the tax system so the Prime Minister and his rich-list colleagues pay their fair share.
MANA Movement policy addresses this by –
• A robust capital gains tax paid at the same rate as the person’s income tax
• A financial transactions tax on currency speculation to replace GST (Note: GST hits families on low incomes the hardest because the poorest 10% of income earners pay 14% of their income on GST while the wealthiest 10% pay less than 5% of their income on GST)
• Higher taxes on higher incomes
• An inheritance tax on estates over $500,000. (National abolished inheritance tax in the early 1990s allowing wealthy family dynasties to flourish at the expense of everyone else)
ENDS.

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