Politicians and a tax expert have offered mixed reactions to the Green Party's plans to give New Zealand's tax system an overhaul.
The new policy aims to see every Kiwi get no less than $385 a week after taxes — paid for through higher taxes on top earners, trusts and businesses. Couples would receive $770, and single-parent families would see at least $735.
A new top tax rate of 45% would be introduced for income over $180,000, with a 2.5% tax on assets over $2 million for individuals and $4 million for couples. Trusts will be taxed at 1.5%.
Those earning under $125,000, 95% of the country, would pay less tax as a result.
The Green Party has called it a "transformational new way" of doing income support that will help end poverty.
"We actually have an opportunity to end child poverty in this country once and for all," co-leader James Shaw told Breakfast.
"That should be the mark of a civilised society."
However, the policy hasn't been so popular with others in the Beehive - ACT has called it "illogical and incoherent".
Some say it will help make a fairer society, while others say it punishes middle-income earners. (Source: Breakfast)
Speaking on Breakfast this morning, ACT deputy leader Brooke Van Velden said it was an "envy tax" that targeted middle-income Kiwis.
"This is not a tall poppy tax. This is just a middle-everybody tax," she said.
She said ideas like taxing trusts wouldn't help New Zealand as a society, but create more uncertainty for small businesses.
"This will be on your dairy owner. This will be on your local hairdresser, your local beauty salon owner, or somebody who's a landscape gardener.
"Anybody who's trying to get up every morning, provide for their family, but what they've done is put their house into a trust to make sure that if something goes wrong with their small business, they know that at the end of the day, their kids will wake up and still have a roof over their heads," she said.
Van Velden believes the policy only seeks to "punish" Kiwis who have "tried to work hard".
"I don't think that goes towards helping us become a healthy, thriving economy," she said.
Te Pāti Māori, however, agreed with the policy, saying New Zealand needs to rethink how tax works.
The party supports a tax on wealth, with co-leader Debbie Ngarewa-Packer saying it has nothing to do with envy.
"We don't envy the wealthy.
"We oppose the abuse of the system that has rewarded people by its poor design."
She said it was "really important" that the country repositions and rethinks the way tax is done to ensure everyone is seeing the benefits.
"If we had a capital gains tax from 2017, we've missed out on $200 billion that would have circulated around the economy.
"We have 60,000 homeless, but we have over 100,000 empty homes in Aotearoa."
A redesign would see "we aren't rewarding the wealthy because of a poor tax system", she said.
"We cannot continue to be a nation that supports the growth of poverty."
Can NZ afford the policy?
Accountant and tax specialist Terry Baucher said that while the policy was "very ambitious", it was realistic compared with similar overseas policies.
"Other countries have wealth taxes, and Switzerland, for example, raises a surprisingly large amount of tax," he said.
Baucher called it "highly unusual" that New Zealand didn't have any kind of tax on wealth, with other countries having at least one.
As to whether New Zealand would be able to afford the Green's plan to ensure all Kiwis had a set income — he said it was possible without having to overtax.
"That's still not unaffordable," Baucher said.
"It doesn't take us near the tax levels of Nordic countries.
"Countries that we aspire to in many ways because they are similar sizes to us, social democratic countries as well, and have relatively high levels of social care."
He said a lot of people would actually be better off under the policy.
"The key thing about this plan is that it's very targeted. Everyone under $125,000 will be better off.
"That's actually broader than what National or ACT have proposed."
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