Treasury predict average worker paying top tax rate by 2022
Budget 2018 projections show that the average worker will be in the top income tax bracket by 2022 unless urgent changes are made to tax thresholds to adjust them to wage inflation.
Taxpayers’ Union Economist Joe Ascroft says “This is the eighth successive Budget that has not delivered income tax relief. While most New Zealanders expect only the most well off should pay the top rate of tax, if the current trend continues, even the average taxpayer will be paying the top rate.”
“In fact, much of the wage growth over the last eight years has actually just been keeping up with inflation, so while many families don’t feel much better off, they are paying more in tax than ever before. Inflation will similarly push families into the top tax bracket over the next four years.”
Note to editors: Treasury project the average annual income will be $72,000 by 2022. The highest income tax threshold (33%) kicks in at $70,000.