Tax Freedom Day

Every hour you have spent working between the 1st of January and today has not been for yourself. It has been to fund central and local government. Only from today onwards are you working for yourself. In fact according to some calculations it may not even be until late May.

Stuff reports:

The notional day on which Kiwis have paid off their collective tax bill for the year and can keep the rest of their income for themselves falls on Thursday.

Accounting firm Staples Rodway calculates when “tax freedom day” falls each year to highlight the changing level of the tax burden.

Staples Rodway Auckland managing director David Searle said the day fell two days later than in 2014 and four days later than in 2013, reflecting the fact people were paying more tax.  

The country’s gross domestic product had risen by 11 per cent since 2012, but the tax-take had risen by 20 per cent, the firm said.

One of the reasons was that tax brackets, which determine the rate of tax people pay on their income, had not been increased in line with rising wages.

Another was that the tax-take had improved as a result of the economic recovery.

Staples Rodway tax director Mike Rudd said the company calculated tax freedom day to “create conversation” and it was not necessary advocating the country cut taxes and public services or went further into debt.

However, Searle said income-earners should only be charged more tax when their real income increased. That would necessitate raising tax brackets by the rate of inflation.

The accounting firm calculated that of the 365 days in the year, people would spend 113 days paying central government taxes, 13 days “working for local authorities” and would keep the equivalent of the remaining 239 days.

I’d like Tax Freedom Day to be in March, not May.