Income Equality Aotearoa New Zealand Inc. Closing the Gap

MEDIA RELEASE: 28th AUGUST 2014

“Robin Hood tax and other clever ways to help our kids”

It’s time to talk about tax. Not just income tax but other kinds of tax too.

It’s time to talk about Capital Gains Tax, inheritance tax and the financial transactions tax. It’s time to get serious about tax evasion.

These are concrete, clever ways to make an immediate difference in the lives of our children.

New Zealand is a low-tax economy. Our low-tax rates, our “missing” taxes, and massive unpaid tax bills intensify the gap between rich and poor.

This week, the media described the Greens’ 40% top tax rate announcement as a Robin Hood tax. Around the world, the financial transactions tax is also likened to Robin Hood.

But who is stealing from who, when up to $6 billion of tax avoidance every year means there’s not enough money in our wallet to fund the economic, health, housing, educational and social initiatives that would benefit the entire nation?

There is no hard evidence that higher tax rates harm the economy. In fact, evidence points to the opposite: increased government spending stimulates the economy. Nobel Prize winning economist Joseph Stiglitz recommends a top marginal tax rate of 70%. That puts our current top tax rate of 33% into perspective.

A financial transactions tax is being implemented in a number of European countries, but has yet to be implemented here. This, among a raft of other policy choices, is a serious tax option for all parties to consider. Let’s use our taxation system to reduce inequality in New Zealand, not to exacerbate it.

ENDS

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