The Greens propose effective income tax rate of 95%

The Greens have proposed four next taxes to fund their spending. They are:

• A 2.5% asset tax on assets over $2 million
• A 1.5% tax on assets held in trusts
• Increase top tax rate to 45% on income over $180,000
• Increase corporate tax rate from 28% to 33%

The combination of the asset tax and the top tax rate will mean some people will end up paying an effective marginal tax rate of 95% – take that Karl Marx.

If you have say $1 million in deposits on top of a $2 million property, you may be getting 5% return on that $1 million. So you earn $50,000 from it on top of your salary. The Greens will take away $25,000 in wealth tax and $22,500 in income tax so you get $2,500 of the $50,000 and the Greens get $47,500 or 95%.

That is bad enough, but you may think it will only apply to rich pricks. So let’s look at their trust tax. This 1.5% tax will apply to all assets held in a trust, including your family home. So if you have a $1 million house in a family trust, you suddenly have to pay $15,000 more tax a year just for owning a family home in a trust.

Then we have a corporate tax rate of 33%, which would be the second highest in the OECD (after Colombia) which has an average 24% rate. It would be a great way to export companies and jobs. This tax rate would be the 4th highest out of 225 countries in the entire world.

Likewise the 2.5% asset or wealth tax would see a huge outflow of wealthy NZers to other countries (which means overall tax revenue would drop significantly). Very few other countries tax assets as well as income, and none of those who do tax it at 2.5%.

Basically the Greens would see NZ with basically the highest levels of corporate and asset tax in the world.

They won’t get all their taxes if they are in Government, but how many would Labour agree to as the price of Government?