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ACT leader David Seymour says simpler tax system would encourage a culture of success (www.rnz.co.nz)

submitted 9 months ago by [email protected] to c/[email protected]

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National campaigned on a proposal to adjust the existing tax thresholds, but as part of coalition negotiations with ACT last year, it agreed to consider whether the "concepts" of ACT's tax policy could be incorporated "subject to no earner being worse off than they would be under National's plan".

In simple terms, ACT would immediately axe the lowest tax threshold of 10.5 percent, meaning the government would collect more revenue from all income earners.

Some of that extra revenue would then be returned to low-and-middle income earners through a targeted tax credit to ensure they were not worse off.

The money left over would allow the government to reduce the higher tax rates at the top of the income scale - dropping the 33 percent rate to 30, and the 39 percent rate to 33

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[–] [email protected] 3 points 9 months ago* (last edited 9 months ago)

Doesn’t it effectively tax those that use the most?

It's the opposite insofar as the total percentage of your income you pay in taxes is higher if you're low income.

Back when I worked, I was putting about 1/2 of my income into savings so there was no GST on that.

Now I can't work I have to spend all of my income on cost of living, which means I effectively pay another 15% on most of it.