$34 billion more tax forecast

Stuff reports:

Inland Revenue’s total tax take is expected to rise from just over $104 billion in the year to June to more than $138b in the year to June 2026.

This is partially because of high inflation. Let’s say you have inflation of 5% a year or 20% over four years.

Let’s say you were on $70,000 today. You pay $14,020 tax. If your wages stay the same in real terms your tax paid increases by $4,620 or 33%. Your after tax income only increases by 17% so in real terms you have less money while the Government has more.

But it gets even better than that for the Government with GST. If prices go up 20%, then GST revenue goes up 20%.

But the tax haul doesn’t even stop there.

The Government is also expecting its first inflow of levies from its proposed Income Insurance Scheme with its levies on workers and employers bringing in $1.1b in the year to June 2025, jumping to $4.7b the following year when the scheme is expected to be in full swing.

This will be the largest take hike in decades – almost $5 billion of extra tax will be paid by employers and employees.

Every employee in New Zealand will be paying this extra tax, up to $1,800 a year, so unemployed people can get paid up to $400 a day not to look for jobs. This is what you will get if Labour get a third term.