KEY POINTS:
United Future wants to simplify and cut personal tax rates to 10 per cent, 20 per cent and 30 per cent.
Leader Peter Dunne announced the new policy, which would cost $4.5 billion a year, at the party's annual conference in Onehunga this morning.
Mr Dunne, who is Revenue Minister, said he had suggested such cuts to Labour's Finance Minister Michael Cullen for the May Budget - though he did not expect it to be accepted in a Labour Budget.
The Budget set out a three-year tax-cut programme, starting on October 1, mainly through adjustment to the thresholds at which tax rates rise.
Mr Dunne's proposed tax rates:
- 10 per cent on income up to $12,000;
- 20 per cent on income between $12,001 and $38,000;
- 30 per cent on income over $38,000.
United Future has long advocated income-splitting as central part of its tax reduction policy (where total family income can be split evenly between the two earners, reducing the income on which high rates apply).
The party also wants gift duty abolished, and to abolish tax on the first $1000 of honoraria for volunteers.
Mr Dunne calculated the extra money every fortnight in the hand for families on three income ranges.
$45,000
- $33 from the October tax cut;
- $45 from United Future's cut;
- $87 from the UF cut plus income-splitting.
$60,000
- $31 from the October cut;
- $63 a from the United Future cut;
- $137 from the UF cut plus income-splitting.
$80,000
- $54 from the October cut;
- $130 from United Future cut;
- $ 191 from the UF cut plus income-splitting.
Dr Cullen's tax-cut programme is costed at $10.6 billion over three years. The key elements are:
* A new low tax rate of 12.5 per cent.
* A lifting of the 21 per cent threshold by $10,500 to $20,000.
* A lifting of the 33 per cent threshold by $4,500 to $42,500.
* A lifting of the 39 per cent threshold by $20,000 to $80,000.
