Abstract
A frequent claim in popular media is that the wealthy pay the most tax. As an absolute measure of tax collected this is correct, as the rich earn the most income. However, perhaps a more insightful perspective is a relative measure incorporating not only who pays the most income tax, but a measure that incorporates other taxes such as indirect taxes and duties.
Indirect taxes and duties collect over one-third of tax revenue in New Zealand and present as a not insignificant tax burden, particularly for lower income taxpayers. This study has three objectives. First it provides an insight into indirect taxes and duties paid by decile group in New Zealand in order to highlight the impact of non-income taxes on different income groups. Second, it challenges the rhetoric associated with claims that no groups would be disadvantaged by the last income and consumption tax changes made in New Zealand. Third, it argues that there is a need for greater transparency on the impact of tax changes and, in particular, there is a role for the government agency responsible for collecting statistical information to engage in more analysis of tax data when that data is not readily accessible for academics.
Category: Volume 19 Issue 2
Volume 19, Issue 2 – Barrett
SUSTAINABILITY, CITIES AND SUBNATIONAL TAXATION: AN ANALYSIS OF AUCKLAND AND BRISBANE
By Jonathan Barrett
Abstract
Treaties on environmental sustainability are concluded between nation states but, faced with the domestic political realities of taxing or otherwise acting against the short-term interests of voters, national governments often engage unwillingly with their international obligations. The Trump administration’s resiling from the Paris Agreement on climate change is an egregious example of flouting of national obligations but Australia and New Zealand have also been slow to give effect to their promises to reduce carbon omissions. Conversely, political subdivisions, including cities, can make their own distinct contributions to sustainability through various measures, including taxes. Megacities, such as London and Sydney, are sufficiently large to have the potential to engage with climate change in ways comparable to many countries. Smaller cities, including Auckland and Brisbane, can also make a contribution to sustainability. Focusing on the use of subnational taxes, this article considers whether, in practice, they do.
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Volume 19, Issue 2 – Freudenberg, Brimble and Belle Isle
Tax Literacy of Australian Small Businesses
By Brett Freudenberg, Toni Chardon, Mark Brimble and Melissa Belle Isle
Abstract
Small businesses are a critical component of economies, although they face a myriad of issues, including their literacy in relation to a number of key business issues. In recent years tax literacy has been argued as an important part of financial literacy. Research has demonstrated that a person’s tax literacy is likely to be greater when they are self-employed and operate their own businesses. However, whether this increased tax literacy is sufficient to address the labyrinth of issues faced when running a business is questionable. This article reports further evidence about the tax literacy of Australians who have conducted a business in relation to GST, deductions and their compliance attitude. These findings can build the foundation for future work to explore how tax literacy is an important component of financial literacy for small businesses.