Cullen over-taxing 352,000 kiwis

New information obtained in response to my written Parliamentary Questions has revealed that hundreds of thousands of Kiwi taxpayers are being grossly over-taxed because of Finance Minister Dr Michael Cullen's failure to adjust his self-imposed five percent threshold for the top tax rate of 39 percent, ACT New Zealand Deputy Leader Heather Roy said today.

"In 1999 Labour introduced a new top tax rate of 39 cents in the dollar," Mrs Roy said.

"At that time, Dr Cullen stated in Parliament that:
'ninety-five percent of people will not be asked to pay more tax. Instead, only the top five percent of income earners will pay more'.

"The promise to tax only the top five percent of earners was never kept: had it been, the Minister would have adjusted the initial $60,000 threshold so that by the 2005/06 financial year only those earning over $79,000 would have had to pay the top tax rate of 39 percent.

"Instead, the threshold was left at $60,000 - and 352,000 New Zealanders were over-taxed by a total of $273 million - an average of $775.56 each - for the 2005/06 financial year. Given that the level of over-taxation was initially only $60 million in 2000/01, it is clear that this situation is steadily growing worse.

"Over-taxing 352,000 Kiwis has contributed to Dr Cullen's huge surpluses year after year, and shows that he has a complete inability to balance the country's books.

"This is a complete disgrace. In his quest to swell his Government's coffers, Dr Cullen has broken his promise to the nation and is robbing hundreds of thousands of hard-working New Zealand families. This entire situation simply reinforces the need for tax cuts now," Mrs Roy said.