Do the rich pay their fair share of tax?

Gareth MorganTax and Welfare

Some numbers from the budget have been doing the rounds on social media, showing that high income earners pay the lion’s share of income tax. No surprises there. But does that mean rich people pay their fair share?

The income tax system only captures PAYE earners – people with a job. There are 3 major loopholes that people with a lot of assets use to reduce the tax they pay – non-cash income, capital gains and lifestyle businesses.

So while high income earners certainly pay their share of tax (in fact in our view PAYE earners generally pay MORE than their fair share), that doesn’t mean that all rich people are paying their fair share. In fact as we have pointed out before, under the current system only half the richest people in the country pay the top rate of income tax.

Do the rich pay their fair share of tax? was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.