The Government must support Simon Bridges’s private member’s bill to end bracket creep drawn from the ballot today, says the New Zealand Taxpayers’ Union.
Union spokesman Louis Houlbrooke says, “From a taxpayer perspective, this is one of the most important private members’ bills
we’ll see in our lifetime. For decades successive governments have exploited inflation to sneakily increase the average
tax rates levied on New Zealanders. It’s a stealthy, dishonest tax hike that makes a liar of any politician who promises
‘no new taxes’.”
The Taxpayers’ Union has campaigned against bracket creep since 2016. In a submission to the Tax Working Group, the Union highlighted bracket creep as the ‘under-arm bowling of our tax system’, explaining: Inflation sees taxpayers’ nominal incomes, but not real incomes, increase. Because income tax thresholds are fixed,
taxpayers face a higher proportion of their income lost to income tax, without any corresponding increase to their real
income.
“Take our 30 percent income tax rate. When it was introduced in 2010 for income over $70,000, that was the equivalent of
$83,000 in today’s money. That meant only high earners were hit. But today, $70,000 is an unremarkable salary. It’s
atrocious that middle-income New Zealanders are forced to give up 30 percent of any pay rise to the taxman.”
“Labour has no good reason to block this bill. They’ve already rushed through unannounced taxes on housing, so they
don’t need extra revenue. In fact, under Bridges’s bill, the Minister of Finance could still veto bracket adjustments on
a case by case basis. Of course, he’d have to explain himself to New Zealanders, but he shouldn’t be afraid of
accountability.”