Don’t the wealthy pay more tax already?
"Wealthy people already pay most of the tax the government receives and to tax them more would be unfair"
In 2019/20 the 122,000 people (representing 3.17% of the taxpaying population) who earned more than $150,000 a year provided the government with 24% of the tax received (Treasury, ‘Who Pays Income Tax… and How Much?').
So on the face of it this is true. On the other hand, given that our tax system is meant to be progressive, this should not be an issue – we recognise that those who can afford it should be asked to contribute more. But as the recent IR Research into High Net-Worth Individuals demonstrated, the system is arguably upside down. The report released in March 2023 shows that New Zealand’s 311 wealthiest families pay just 8.9% of their income in tax – less than the rate paid by a minimum wage worker (10.5%) and less than half the rate paid by the average Kiwi (19.7%).
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