By Rebecca Wright
Labour has announced details of its tax policy, following questions on TV3's The Nation last weekend.
It says it would restore the top tax rate to 38 cents in the dollar but the threshold would be higher - at least $100,000 a year.
Kiwis earning over $70,000 dollars a year are expected to be in for a tax cut in next month's budget - but the leader of the opposition says his party would reverse a reduction from 38 to 33 cents in the dollar and tinker with the thresholds if elected.
“We would be looking at a rate of taxation that's not much different to the 38 cents in the dollar as the top rate but increasing the threshold so you didn't get to that level until you were earning very high incomes,” says Labour leader Phil Goff.
Today Mr Goff told reporters Labour would return the top tax rate to 38 cents but it would also raise the income threshold where the top rate kicks in.
“It certainly wouldn't be left at $70,000 - it would be in six figures,” says Mr Goff.
Raising the income threshold would mean effectively taxing the top five percent of earners at the highest rate.
- 88 percent of kiwis earn under $70,000 a year.
- 6.8 percent earn between 70 and $100,000
- 5.1 percent earn over a $100,000 a year.
Finance Minister Bill English wouldn't be moved on whether raising thresholds is part of the Government's package and he wasn't biting on Labour's policy.
“Its just the same old Labour party coming back - put up taxes, spend more, borrow a lot and hope people vote for you,” says Mr English.
Labours policy appears to have rapidly taken shape since Mr Goff was drawn on the party's tax plan over the weekend.
3 News understands there has been rigorous debate on the issue behind the scenes but taxing the rich is standard policy for the party and with 95 percent of Kiwis earning under $100,000 a year - it’s an obvious one for the party to pursue.
3 News