Dr Cullen's plan - Lower Wages = Lower Taxes
Much is being made by Dr Cullen and others about the OECD Report about New Zealand being one of the lowest taxed countries in the world. There is a simple reason for that - because New Zealand is one of the lowest wage rates in the world!
I check the OECD report and found these figures - I converted the Gross Wage to New Zealand Dollars and then calculated the tax rate using the NZ tax rates. So if the average Kiwi earned as much as the country listed then the tax rate would be as listed
So there you have it - New Zealand appears to be low tax, but it is kept down by the fact that we are actually a low wage country. This is further hidden by the high Kiwi dollar (for instance, if you calculate the German amount with the Euro at .45 against the NZ Dollar (like it was in 2001) you get a 28.7% tax rate on the income.
I check the OECD report and found these figures - I converted the Gross Wage to New Zealand Dollars and then calculated the tax rate using the NZ tax rates. So if the average Kiwi earned as much as the country listed then the tax rate would be as listed
So there you have it - New Zealand appears to be low tax, but it is kept down by the fact that we are actually a low wage country. This is further hidden by the high Kiwi dollar (for instance, if you calculate the German amount with the Euro at .45 against the NZ Dollar (like it was in 2001) you get a 28.7% tax rate on the income.
posted by Michael at
9:48 PM
2 Comments:
I have the full OECD Revenue Statistics 2003 report if you want it. Very interesting tax system/revenue comparisons. NZ has the tax structure of a western European country, but the per-capita is rather lacking.
email me at antarcticlemur@gmail.com if you're interested.
By
Antarctic Lemur, at 5:16 PM
Singapore, where I live, is not OECD but interesting to compare since I am expat NZer.
Assuming 41,778 is NZ average and converting using current high exchange rate:
41,778 New Zealand Dollar = 50,067.5 Singapore Dollar
Singapore 2005 income tax on 50,067.5 = 1,906 dollars
= 3.8% (before rebates)
http://www.iras.gov.sg/ESVPortal/resources/formb1workingsheet.doc
By
Anonymous, at 2:14 AM
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