National campaigned on a proposal to adjust the existing tax thresholds, but as part of coalition negotiations with ACT last year, it agreed to consider whether the “concepts” of ACT’s tax policy could be incorporated “subject to no earner being worse off than they would be under National’s plan”.
In simple terms, ACT would immediately axe the lowest tax threshold of 10.5 percent, meaning the government would collect more revenue from all income earners.
Some of that extra revenue would then be returned to low-and-middle income earners through a targeted tax credit to ensure they were not worse off.
The money left over would allow the government to reduce the higher tax rates at the top of the income scale - dropping the 33 percent rate to 30, and the 39 percent rate to 33
Don’t forget that the last NACT government already raised taxes in a way that impacted poor people the most when they raised GST to 15%. And their avatars in the media were in the weekend advocating for sanctioning beneficiaries (Paula Bennett’s column. They actively despise poor people, blame those on low incomes for the situation they are in, and want to punish them for it.