In Aotearoa, there is enough to go around. But the tax system has allowed wealth to accumulate with a small number of us, while most of us have only modest assets. We tax work in Aotearoa, but we don’t tax wealth.
COVID-19 has exposed wealth inequality, and the economic response to the pandemic is making inequality even worse with government stimulus spending benefiting wealthy asset owners. The Greens have a plan for a more equal Aotearoa, so everyone can flourish.
Our plan for fairer tax will help redistribute wealth from those with the most wealthy so we can support those with the least. Ours is the only tax plan that will ensure we can continue funding strong public services in the years to come, and make sure those with the least have enough income to live with dignity.
Here’s what our Fair Tax Plan includes:
We’ll tax wealth fairly by introducing a new tax on individuals’ net wealth over $1 million. This means those who have their own wealth worth more than $1 million – not including mortgages and other debt – would be asked to pay a small annual contribution to fund stronger social support for all New Zealanders. This would only apply to the wealthiest 6% of New Zealanders.
We’ll update progressive income tax so those earning much more income contribute a little more to help fund better social support for everyone. We’ll introduce new income tax brackets of 37% for income over $100,000 and 42% for income over $150,000. We expect this to generate approximately $1.3 billion a year, which will fund improvements for public health, education, income support, and environmental protection.
We’ll close tax loopholes & minimise tax avoidance by taxing big digital giants such as Facebook and Amazon.
During COVID-19 we saw our collective ability to work together to change the system in a way that benefits all of us.
The Green Party’s tax plan makes transformational change possible. It’s a simple and fair way to even the playing field and unlock the resources all of us need to thrive and participate fully in our communities.
Frequently Asked Questions
Who would pay the wealth tax?
Only 6% of all New Zealanders have individual net wealth worth more than $1 million, so only these people would pay the wealth tax. 94% of New Zealanders would not pay any of the proposed wealth tax.
How much would the tax be?
The tax would apply to assets over the $1 million threshold. Everyone’s first million dollars of assets would not be taxed.
So someone with assets worth $1.2 million would only pay the 1% wealth tax on the last $200,000 of their assets, not all their assets.
Is this a tax on all homes worth more than $1 million?
No. Many people with homes worth more than $1 million would not pay any wealth tax.
The tax would only apply to the portion of an expensive home that someone owns outright and isn’t mortgaged. For example, if someone’s home is worth $1.2 million but there is a mortgage for $700,000 of that, then their net asset is only $500,000 and no tax would apply.
And the tax would apply to individuals: so a $1.2 million home is actually only $600,000 of assets each if it’s split across a couple.
Would the tax apply to cars, boats, holiday homes, Kiwisaver, and other assets?
Nothing worth less than $50,000 would count, including most people’s cars.
The tax only applies to net wealth over $1 million, and only 6% of New Zealanders have net wealth worth more than $1 million. For those people, the tax could apply to their total assets including expensive cars, holiday homes, etc.
Would the tax apply to everyone’s retirement savings?
No. The tax would only apply when someone’s total assets are worth over $1 million.
94% of New Zealanders don’t have assets or savings worth over $1 million. In fact, the average Kiwisaver balance is only $19,000.
What about retired people with low incomes who own expensive homes?
Some people in this situation already delay their council rates payments until one day their home is transferred or sold. They would be able to do this for the asset tax too.
Would a wealth tax reduce or increase house prices?
A wealth tax is likely to make buying a home more affordable for many people overall. According to the independent tax experts on the Tax Working Group in 2019, a wealth tax could help reduce property speculation and encourage investment into productive businesses instead, which would create new jobs and help free up housing for first home buyers instead of property speculators.
Why tax wealth and assets, not just income?
Wealth inequality is growing. Some people are building up assets while others struggle to get by. Working people with good incomes struggle to buy homes, while people who already have significant assets can leverage them to increase their own wealth.
This is partly because we tax income from work, but we don’t tax wealth.
We think it’s time to ask the wealthiest New Zealanders to give a little back for the good of everyone, as we rebuild from COVID-19.