Tuesday, 13 May 2008

ACT Party slam Labour's "bracket racket"

New Zealanders are the victims of a "giant tax bracket racket" under Labour, according to ACT party leader Rodney Hide.

He calculates that Cullen's tax racket has collected an extra $10 billion over eight years, robbing a kiwi on the average wage of $4,232.

ACT founder Sir Roger Douglas says the current Labour-led administration has wasted the $10 billion it stole from taxpayers, by refusing to adjust tax thresholds in line with inflation, and "might as well have flushed it down the toilet".

The pair revealed that workers on the average wage need a tax cut of $35 a week just to break even, and return their income to a comparable level to when Labour took power.

Dr Cullen's claimed his "rich prick" top tax rate of 39% - imposed in 1999 - would affect only 5% of workers. The top rate, which cuts in at $60,000 now hits almost 15% of income earners.

(If the threshold had been adjusted for inflation, it would now only affect those on incomes over $74,000).

ACT says it wants to abolish the "envy tax" altogether, and make the rest of the tax system "as low and flat as possible".

The party also wants the first $10,000 of income to be made tax free immediately, giving average earners a tax saving of $50 a week.

(However that $10,000 tax-free threshold is half the $20,000 figure suggested by Sir Roger in a speech earlier this year). Further policy details will be announced on Sunday.

* NZ Herald: 'Bracket racket' has cost taxpayers $10 billion, Act says

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