5 March 2026, 6:30am – Taxing wealth is a practical and necessary step to address increasing inequality, according to a research report released today by Tax Justice Aotearoa and the Better Taxes for a Better Future Campaign.
The report by Tayla Forward shows that a well-designed and enforced wealth tax can help restore progressivity to New Zealand’s tax system and generate significant revenue to better fund the public goods and services we all rely upon, but which are crumbling with the weight of underfunding.
“In 2023 IRD research found the wealthiest 311 families paid an effective tax rate of 9%, while ordinary people who earn their income from work or welfare pay 20% on average. That’s because our tax system relies too much on income tax and GST, and does not tax wealth in any meaningful way. This report shows that if we get the settings right a wealth tax is a practical and necessary step in addressing this unfairness,” said Glenn Barclay, spokesperson for Tax Justice Aotearoa and the Better Taxes Campaign.
“Right now ordinary people are contributing more to our collective pool of resources, even though the wealthiest benefit just as much – if not more – from our public goods and services. At the same time, by not taxing wealth we are making inequality worse, enabling the ultra rich to claim an ever greater share of our wealth. Treasury analysis shows the wealthiest 1% of New Zealanders now hold 26% of all assets, while the poorest 50% own just 2% of assets.”
“This increasing inequality is undermining the living standards and opportunities for ordinary people, making it harder for people to ever have enough to buy a home or save for retirement,” said Barclay.
“Poll results released yesterday by Better Taxes Coalition member the Wellbeing Economy Alliance showed that 68% of people support higher taxes on the ultra rich. And that’s the focus of wealth taxes – the ultra rich – we’re not talking about taxing the hard-earned income of doctors, builders and small-business owners. The poll indicates that the public are ready for taxes on wealth, if properly explained.”
As set out in the report, a net wealth tax:
is an annual tax levied on the net wealth (assets minus debt) that a taxpayer owns above an exemption threshold – e.g. $2m, $5m, $10m. No one with net wealth below the threshold is liable for the tax, and those liable are only taxed on their wealth beyond the threshold – net wealth up to the threshold is exempt;
usually has a low rate – the report considers rates between 1-2% – but still generates revenues in the billions of dollars; and
can be designed to address potential evasion and avoidance, and cashflow/liquidity issues. Further, much feared capital flight is largely “unproductive financial shuffling”, rather than real productivity losses.
“As Tayla Forward states in the report, there is a compelling case for wealth taxation to generate revenue we need to fund our communities, and to address wealth inequality and the concentration of economic power, which undermines living standards, as well as our democratic system and economic efficiency,” said Barclay.
“Further, the report is clear that it is possible to design and implement wealth taxes in ways that address common issues experienced overseas. The real question is whether our leaders are prepared to make the political commitment necessary to ensure ordinary people can still realistically work towards owning their own home, supporting their family and a comfortable retirement, with the support of properly funded public goods and services.”
About the report author:
Tayla Forward (Ngāpuhi) is a researcher in economics and political economy based in Tāmaki Makaurau. Fellow of the World Inequality Lab, postgraduate student at the Paris School of Economics, and a research associate at Victoria University of Wellington and at the University of Canterbury. Formerly analyst at the Treasury and Private Secretary to the Minister of Finance.
