The new 2023 Lifetime Tax Report from the New Zealand Taxpayers’ Union investigates the total lifetime tax burden paid by Kiwis in all income deciles. In doing so, we hope to start debate around the real cost of government crisis being faced by working families up and down the country.
Through higher rates and bracket creep, we all know that the amount of income tax we pay year-on-year is spiralling out of control. But far too few people know the real cost of other taxes, particularly consumption taxes such as GST and fuel duties.
Utilising sources such as Statistics NZ, the Household Economic Survey and Treasury’s APITRE tool, this study analyses the spending habits of New Zealanders to approximate the total amount of tax which would be paid at current rates and prices across a lifetime.
Key findings of the report:
- At current prices and rates, the average New Zealander will pay a total of $1,096,777.97 (± 4.52%) in tax across his or her lifetime.
- At this income, the average New Zealand taxpayer will spend the equivalent of 22.65 years (± 4.52%) of their life working just to pay their tax burden.
- This is equivalent to 33.43% of their life between the ages of 15 and 82.75 (weighted average life expectancy).
- The average New Zealander will earn $3,155,713.44 in their lifetime and pay $1,096,777.97 in tax. This means that of everything the average New Zealander earns between the ages of 15 and 82.75, they will pay 34.76% to the Government in tax.
- As expected, income tax makes up a larger proportion of the tax burden of high-income individuals.
- However, sin taxes such as those on alcohol and cigarettes disproportionately punish those on lower incomes.
Commenting on the release of the 2023 Lifetime Tax Report, Taxpayers’ Union Policy Adviser and author of the report, James Ross, said:
“We now live in a country where nobody actually knows how much they’re paying in tax every year. They can see that government spending on bloated bureaucracies and vanity projects is spiralling out of control, but there is little clarity on how much of that bloat they’ve paid for.
“By shining a light on just how much of their lives New Zealanders spend funding the Government, hopefully New Zealand can start an informed debate about the unsustainability of our current levels of government waste. Wasted taxes are hard-earned by New Zealanders, and they have every right to know exactly how far they’re being taken for a ride.
“This report also displays the ways in which the burdens of various taxes are distributed across income levels. For instance, as we have long argued, sin taxes such as those on cigarettes and alcohol disproportionately punish poorer New Zealanders. Hopefully the impact these have will give some food for thought as to the effects moralising tax policies have on those with least to give.”