Under half of super rich pay top tax rate

The Herald reports:

New Zealand’s super-rich were found liable for an extra $77 million of tax in the last financial year.

The country’s most well-off have paid hundreds of millions of dollars in extra tax to Inland Revenue since it set up its high-wealth individual unit in 2003.

Those who come under the scrutiny of this IRD division must have, or be in control of, more than $50 million.

According to IRD’s investigation and advice manager Tracey Lloyd, the unit has identified 200 people who met the criteria.

Of these 200 people, 93 declared their personal income in the 2013 financial year as less than $70,000 – the point at which one is required pay the top tax rate of 33 cents in the dollar.

This is why increasing the top tax rate doesn’t increase tax revenue, but merely increases tax avoidance. The best tax system is low rates with a broad base.