Source: Taxpayers Union
26 APRIL 2018FOR IMMEDIATE RELEASE
The New Zealand Taxpayers’ Union has released its draft submission to the Tax Working Group, along with an online tool that makes it easy for taxpayers to make submissions.
Taxpayers’ Union Executive Director Jordan Williams says, “We’re inviting taxpayers across the country to send the Tax Working Group a clear message: The Working Group should not be used as an opportunity to dig deeper into our pockets.””As if fuel taxes weren’t enough, the Group’s chair, Sir Michael Cullen, has been talking about wealth taxes, asset taxes, environment and water taxes, and capital gains taxes. He’s even been talking about taxes for ‘bad behaviour’, covering sugar, salt, fat, plastics, and more.””Our submission template can be altered as submitters wish and sent straight from the Taxpayers’ Union website.”The organisation’s full submission is currently out for consultation with Taxpayers’ Union members. Anyone can view the Exposure Draft here.
The Union’s key submissions are:
1. Where new taxes are recommended, we say the Tax Working Group should make them revenue neutral – i.e. balanced with tax cuts in other areas.
2. No taxation without indexation: we call for income tax thresholds to be indexed to changes in average earnings or, at minimum inflation (as happens in Canada). This would end fiscal drag (also called ‘bracket creep’).
3. We call for the company tax rate to be cut for all businesses rather than cutting tax rates for smaller businesses (as the Working Group’s Background Paper proposed). Having multiple levels of company tax would create perverse incentives.
4. We call for full tax deductibility for businesses’ capital spending within the first year of purchase to increase incentives to invest in capital and productivity, and increase wages.
5. The loophole allowing charity-owned businesses (such as those owned by churches and iwi even when none of the profits are used for the ‘charitable’ purpose) to operate tax-free should be closed.
6. Similarly, Māori Authority-owned businesses should operate under the same tax rate as their competitors paying 28% income tax – and not be allowed pay the special 17.5% rate.
7. We explain why introducing a complex Australian-style capital gains tax would be a step backwards and bad for investment, growth and employment.
8. On retirement investment, we say taxpayers should be allowed to deduct inflation from taxable interest income.
9. Any environmental tax proposals should (in addition to being revenue neutral) be sector neutral – i.e. politicians should refrain from targeting specific industries.
Submissions to the Working Group close on Monday.