Report: Income, Wealth and Tax at the Top
Income Wealth and Tax at the Top: Bridging bespoke wealth surveys and Distributional National Accounts in New Zealand
Tayla Forward
October 2026
"Tayla Forward demonstrates how unequal New Zealand really is. According to her latest estimates, the bottom 50% of the population barely owns 3.5% of aggregate net private wealth, while the top 10% owns 68% of the total. Very well documented, highly rigorous, the work by Tayla Forward uses state-of-the-art research methods. A must-read"
Thomas Piketty, author of Capital in the 21st Century, Professor of Economic and Economic History at the Paris School of Economics, and Co-director of the World Inequality Lab
Globally renowned economist Thomas Piketty has endorsed our new research report that shows the very wealthy paid less than half the tax rate of the median-wealth New Zealander (8.1%: 17.4%), costing New Zealand billions in foregone revenue and increasing wealth inequality.
For every dollar of tax paid on the income of middle New Zealanders, the very wealthy paid only 47 cents on their income.
“For most working New Zealanders, what you earn and what you're taxed on are very nearly the same thing. For the very wealthy, whose income flows predominantly from owning assets, the gap between their income and what they are taxed on can be vast, and it can be engineered.
Roughly two-thirds of the comprehensive income of the very wealthy is never taxed, and what is taxed is mostly taxed at the companies tax rate – the combination of which decreases their effective tax rate,” said report author Tayla Forward.
"...Had the very wealthy earned the same balance of taxed and untaxed personal income as the median, the group would have paid about $605m more a year over 2021-2024, and the same calculation applied to the larger group of the top 1% would have generated an additional $7 billion a year in tax revenue.”
As Piketty's endorsement highlights, the research explains the impact of not fairly taxing the very wealthy on increasing wealth inequality. Because most of the returns at the top go untaxed or lightly taxed, top wealth grows faster than other households’. Each year they can reinvest a larger surplus and claim a growing share of total wealth.
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Key points:
1. The very wealthy pay less than half the effective tax rate of middle New Zealanders.
Between 2021 and 2024, the very wealthy paid an effective tax rate of 8.1%, compared with 17.4% for the median-wealth adult. For every dollar of tax paid on the comprehensive income of the median-wealth adult, the very wealthy paid just 47 cents.
2. The current tax system allows wealth inequality to grow.
The top 10% own around 68% of NZs net private wealth, while the bottom 50% own just 3.5%. Low effective tax rates allow the wealthiest to accumulate and reinvest more of their income/returns, further widening the gap.
3. Billions of dollars in potential tax revenue is being missed.
Had the top 1% 's household income been as taxable as that of the median-wealth adult, the report estimates an additional $7 billion a year in tax revenue over the 2021-2024 period.
4. Raising existing income tax rates alone will not fix the problem.
The very wealthy have great flexibility to shift income between personal, trust and company structures, while most wage earners have little ability to change how their income is taxed.
5. A fairer tax system could help ease pressure on the average New Zealander.
Reforming what we tax, rather than relying solely on changes to tax rates, could ensure those with the greatest ability to pay, contribute more towards the public services New Zealanders rely on.
About the report author
Tayla Forward (Ngāpuhi), is a researcher in economics and political economy, Fellow of the World Inequality Lab, postgraduate at the Paris School of Economics, and research associate at Victoria University of Wellington and the University of Canterbury.
This report was supported by Tax Justice Aotearoa and the Better Taxes for a Better Future campaign, the World Inequality Lab, the Paris School of Economics, and the Royal Society of New Zealand Mana Tūāpapa Future Leader Fellowship.