Super rich New Zealand families are paying a median tax rate of 9.4 per cent compared with middle wealth New Zealanders paying 20.2 per cent. Animation / Ben Cummins
Today I’m taking a break from talking about the Kardashians and whatever else “the internet is talking about” and, rebelling against this column’s own tagline, I’m going to talk about what the internet is not talking about enough but should.
Nearly 100 of the wealthiest New Zealanders wrote, in a letter to the Government, that they are “frustrated” by how little tax they pay. Think about that for a second: imagine feeling frustrated at feeling like you don’t pay enough tax.
So let me, a person who is not entirely sure she knows what the word inflation really means and who hyperventilates at the mere thought of logging into her online banking, be the voice of these unheard rich people, saying something I never thought I’d say: for God’s sake, listen to these rich people.
Ecostore founder Malcolm Rands also signed the letter.
“We want to pay more,” they wrote in a letter addressed to Revenue Minister David Parker. “Some of us have built businesses from scratch and celebrate profit when it serves the public good. But we know that in our working lives, we have benefited from the infrastructure paid for by the taxes of past generations: the roads, the hospitals, the schools,” the letter also stated.
These people - among them Les Mills CEO Phillip Mills, Ecostore founder Malcolm Rands and Dame Susan Devoy, among others - are acknowledging that they do not pay enough tax on the income they make from the businesses they built in Aotearoa.
And before you get into your email account to tell me they can just pay more tax if they want to, let me point this out to you now: apparently, they can’t. Tax laws, as they stand, do not allow for voluntary tax payments like that. As an IRD spokesperson told Newsroom this week, “If someone pays Inland Revenue more than we believe they are legally required to, we automatically refund that to them.”
An IRD report last month found that the wealthiest New Zealanders pay tax at half the rate of ordinary people in the country. Often that’s because much of their income is capital gains.
According to estimates by Treasury, a quarter of all household wealth in New Zealand is concentrated in the hands of the richest 1 per cent. A large bulk of the other 99 per cent would very much like to stop losing sleep over their grocery bills. These two things are not entirely unrelated.
I’m not saying this is an easy fix, but if there is one thing the pandemic showed us it is that the Government can make big, bold decisions in a hurry when it deems them urgent enough. Parents in New Zealand today are going without dinner so their kids can have a meal. The average person often feels one or two unforeseen expenses away from total financial ruin. How is this not an urgent issue?
It is exhausting to watch people in suits and ties wave their arms about and pretend this is all very tricky. It should not matter whether it’s tricky and gets put in the “too hard basket”. The “too hard basket” is precisely where those in government should be pulling things from to solve them.
Sure, you don’t have to listen to me, I don’t think I’ve ever won a game of Monopoly in my life so I’m not going to suggest any ideas for how to fix a broken tax system. But I am going to point out that things are not looking great at the moment and so maybe we should consider trying something new and listening to a few suggestions, including the ones from people who clearly know a thing or two about a thing or two.
Whatever the solution is, wanting a fairer tax system for everyone should not be a controversial take.
