Following today’s release of the Government’s audited Financial Statements revealing that fiscal drag has seen New Zealanders taxed an additional $1.2 billion by stealth, the Taxpayers’ Union is launching a new website and petition as part of a campaign to Axe the Inflation Tax.

Axe the Inflation Tax asks all political parties to commit to automatic annual inflation adjustments of tax brackets so that Kiwis struggling in the middle of a cost of living crisis aren’t pushed into paying higher and higher average tax rates when their income hasn’t increased in real terms.

Taxpayers’ Union Campaigns Manager, Connor Molloy, said:

“While a number of political parties are campaigning on adjusting tax brackets for inflation, none of them have committed to the Taxpayers’ Union’s robust proposal that would actually stop politicians’ from stealthily sticking their fingers into workers’ pay-checks for more and more tax every year. The key differences between our proposal and those of political parties is that we want inflation adjustments to income tax brackets to be both automatic and annual.

“Parties campaigning on discretionary adjustments simply give themselves an easy out to continue stealth tax hikes without the consent of Parliament. If the Minister of Finance feels that they need the additional revenue, they should be able to justify it to the public and parliament as they are currently forced to do with every other tax grab.

“Equally, three-yearly inflation adjustments are particularly punishing during high-inflation periods such as right now where many struggling families cannot withstand three years of tax hikes before being bribed with an adjustment disguised as tax relief. What’s worse is that, as we have seen with the failure to regularly adjust tax brackets since they were introduced in 2010, many parties claim that it would be simply too expensive to reset tax brackets to the same real level as when they were first set.

“Our inflation tax calculator shows the impact inflation has had on income taxes and how much less tax workers would be paying if regular inflation adjustments had been occurring. A worker on the median income of $66,196, for example, is paying $2,285 more in tax per year than someone on the same real income in 2010 despite politicians not legislating any changes to income tax rates in the lower and middle brackets during this time.”

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