Tax cuts .. poor get screwed .. rich get 5% cut in their tax bill..
“.. The Government is putting the finishing touches to its package of tax cuts and is now confident that low and middle income earners will have more money in their pockets – even after paying a higher GST.
The Sunday Star-Times understands the government has settled on lowering the tax rate for those earning between $14,000 to $48,000 –
- which represents the bulk of wage earners – from 21% to 19%.
The May budget is also expected to lower the tax rate for those earning up to $14,000 from 12.5% to 10%.
The Star-Times also understands the government will, in one hit, lower the top rate for those earning more than $70,000 from 38% to 33%, rather than doing it gradually.
If the changes are implemented, someone on the average wage of about $48,000 will be about $5-$10 a week better off, according to New Zealand Institute of Economic Research figures to be published this week.
Those earning more than $70,000 would be about $20 a week better off (see table).
The government has signalled that GST will rise from 12.5% to 15%, raising an estimated $2 billion in revenue that would be used to pay for the tax cuts.
Lifting the tax to 15% will add $21.25 to the average weekly household bill..”
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