Tax Freedom Day

Criticism of the government’s plan to allow us to keep a little more of our own money abound.

What most ignore is the impact of inflation and the failure to adjust tax brackets to account for it.

This point is made in an email from the Taxpayer’s Union to mark tax freedom day:

Tax Freedom Day will fall at 02:17am Sunday 26th May this year, which means that every cent taxpayers have earnt so far in 2024 has taken by the government in tax. Almost 5 months into the year, Monday 27th May is the first full day where Kiwis get to know that they’re working for themselves and not the government.

Commenting on this, Taxpayers’ Union Policy and Public Affairs Manager, James Ross, said:

“When income tax brackets were last adjusted for the vast majority of Kiwis in 2010, Tax Freedom Day would’ve fallen on 18th May. Thanks to bracket creep, Kiwis are now paying with an extra week of their lives every year to prop up a seriously over-bloated bureaucracy.

“Tax Freedom Day keeps slipping back because the average Kiwi is now paying $49 more in income tax than they were when they last had any say in their tax rates. Kiwis need tax relief, but anything less than $49 a week is simply short-changing them.

“Nicola Willis needs to wind the clock back and start moving Tax Freedom Day in the right direction again. It’s time for the Government to get serious about slashing waste to deliver the tax relief promised to New Zealand.”

The previous government’s legacy of wasteful spending and bloated bureaucracy gives the current one some leeway to cut spending without impacting on essential services and infrastructure,  let us keep a little more of the money we earn and start moving tax freedom day back to earlier in the year.