Volume 19, Issue 2 – Marriott

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.

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