The Issues

Large corporations and multi-nationals are able to take advantage of loopholes in our tax system to limit the amount of tax they pay. Multi-nationals can take their super-profits offshore minimising their tax in Aotearoa. Large corporations, like supermarkets, banks, electricity retailers make excessive profits due to lack of competition or windfall situations (e.g. COVID or natural disasters).

For example, some of the largest multi-national tech corporations - like Facebook, Amazon, Google and Microsoft - are earning billions of dollars of revenue in New Zealand, but paying very little tax, so we’re missing out on $100s of millions of much needed tax revenue.

These corporations are generating wealth for their super rich executives and shareholders by using our infrastructure, relying on workers trained in our schools and looked after by our health system, but they are not paying their fair share to maintain these services. What’s more, small and medium New Zealand businesses who are paying their share of taxes are at a disadvantage.

1. Tax big tech and multi-nationals properly by enforcing existing taxes and increasing transparency
2. Rein in corporate profits through excess / windfall profits taxes or sector-based surcharges (e.g. a levy on the profits of major banks)
3. Close tax loopholes for loans between companies and shareholders
4. Increase the costs of harmful corporate behaviour (e.g. reversing cuts to tobacco taxes), make polluters pay and demand fair returns for irreplaceable resources
5. Increase transparency on corporate profits

Hardworking people support our schools, hospitals and transport networks by paying taxes on every dollar we earn through our wages and salaries. The super rich also benefit from these services, but get most of their income from untaxed capital gains and low-taxed returns on wealth, so aren’t contributing their fair share. Our system is designed to tax work more than wealth, so workers are carrying more of the load than the wealthiest in New Zealand.

IRD research from 2023 showed that the 311 wealthiest families in New Zealand essentially pay less than half the tax rate (9%) of a middle-income working person (20%). This is because they make money from owning and selling assets (e.g. shares or investment properties) that aren’t taxed in the way we tax income from work.

This isn’t fair and contributes to increasing inequality. The wealthiest are using their untaxed gains to claim more and more of our wealth, while working people’s wages aren’t keeping up, living costs keep rising and increasingly working people are locked out of owning their own home. It’s time we shared the load and our wealth better to tackle inequality and fund better lives for all.

1. Tax wealth, not work through taxes on capital gains, wealth, trusts and transfers of wealth (such as inheritance/gifts)
2. Reverse billion-dollar tax cuts for landlords
3. Make income tax fairer by:
   a. removing tax on the first $5000 earned
   b. changing tax brackets to more accurately reflect ability to pay
   c. increasing the tax rate paid by the highest income earners
4. Address the impact of GST on the least well-off by lowering the GST rate or providing GST refunds for people on low incomes.