Even in my posts I had only complained about 67% marginal tax. But Dr Don demonstrates for a family of 5 living in Auckland the marginal rate is 91%. Get rid of this bunch of socialists. they are killing initiative. Full text of Dr don on Tax.
It is a set of policies that is taking New Zealand into a world riddled with perverse incentives. It amounts to a declaration to nurses, junior doctors, teachers, builders, plumbers, engineers, the skilled and the energetic, that you will not get ahead in this country no matter how hard you work.
You doubt that? Let me give a simple example.
Suppose you are a principal income earner on $38,000 with a partner and three young children, living in a central Auckland suburb, and eligible for the accommodation supplement. You decide you want to get ahead faster and get better clothes for the kids. You get a new qualification, work longer hours, and take on more responsibility. Your salary eventually rises to $70,000 a year, $32,000 more than before. But your after-tax-and-benefit income rises not by $32,000 but by just $2,856, with the other $29,144 going to the government. Your effective marginal tax rate is 91%. The abatement of the accommodation supplement contributes significantly to this, but even without that the government takes 66% of the increased earnings.
So why would anybody go to all the effort?