Budget 2017 - pre-budget analysis
Budget 2017: Guide to Possible Tax Changes
Steven Joyce has intimated that this Budget will provide tax relief to New Zealanders through an adjustment in tax thresholds.
As we go into the Budget lock up, the Taxpayers Union’ have put together some benchmark figures as a guide to judging the size of these possible changes:
Bracket Creep
To counteract fiscal drag since 2010 (adjusting thresholds for inflation) new tax thresholds need to increase to approximately:
- $0 - $16,000 for the 10.5% marginal tax rate (currently $14,000)
- $16,001 - $54,000 for the 17.5% marginal tax rate (currently $48,000)
- $54.001 - $79,000 for the 30% marginal tax rate (currently $70,000)
- $79,000+ would be taxed at the 33% marginal tax rate (this currently kicks in at $70,000)
Fiscal Impact: $0.96 billion
A “Meaningful Tax Cut” - John Key
A meaningful tax relief package of $3 billion (the John Key size tax cuts) would require tax thresholds increase to:
- $0-$25,000 (10.5%)
- $25,000-$65,000 (17.5%)
- $65,000-$100,000 (30%)
- $100,000+ (33%)
Fiscal Impact: $3 billion
For more information refer to ‘Option 4’ in our report, 5 Options for Tax Relief in 2017.