Interesting Thinking

I’m quite proud of the research I did working out tax you pay in NZ and Australia on income. I’ve even got updated tables taking into account stuff like the Australian low income tax offset which means no tax until you earn over $11,000. Took me ages of searching to find out how it works.

Jordan, without providing any facts or research, except quoting five year old tax data, insists that I am wrong. He says “What you can be certain of is that people’s pay packets are not what is represented in DPF’s table.” He insists I have overlooked state taxes.

As Jordan’s commenters are pointing out, the states are generally funded from federal income tax and state payroll tax is a tax on businesses not individuals.

Now Jordan in five point font admits at the bottom that even back in 2002/03 as a % of GDP, govt revenue in NZ is 41.2% and Australia is 36.6%. Well 5% of GDP is a hell of a lot of money – $8 billion or so.

The reality is that in the last eight years Dr Cullen has only increased individual tax. He has not delivered a single cut to tax rates or thresholds. And what has Peter Costello done over the same eight years?

An individual on $20,000 now pays 51.3% less income tax
An individual on $30,000 now pays 54.2% less income tax
An individual on $40,000 now pays 36.2% less income tax

On the NZ average wage of $40,000 you pay 23% less income tax in Australia than you do here.

And we won’t even mention the NZ GST is 12.5% on everything and Australia GST is 10% on only some stuff.