Personal Income Tax in New Zealand: Who Pays and is Progressive Taxation Justified?

Sinclair Davidson
New Zealand Business Roundtable
12 April, 2005

There is a perception in New Zealand that the so-called ‘rich’ do not pay their fair share of tax. Yet the evidence examined by Sinclair Davidson shows this to be untrue. Amongst other findings he notes that the top 10 percent of households pay almost as much in tax as the next decile earns in income, while 40 to 60 percent of households receive more in benefits than they pay in tax.

Dr Davidson concludes that if ‘fairness’ is defined as proportional taxation, better-off New Zealanders pay far more than their fair share.

Dr Sinclair Davidson is Professor of Institutional Economics at RMIT University in Melbourne.

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