Dear Friend,

I can't believe I'm saying this but it looks like the National-led coalition is planning to implement Labour's tax policy. We need your support to stop it.

The media are barely reporting it, but working its way through Parliament, is a Labour Party bill, which the Government now appears to have adopted, to increase the tax rate for all trusts to 39% effective from 1 April this year.

For trust income, the same tax rate applies from the first dollar of trustee income derived (unlike personal income which is taxed at an increasing tax rate as income rises). That means that far from going after the 'wealthy alite', this change will hammer small business owners who rely on trusts for asset protection and to preserve property for future generations.

There are 163,000 trusts with income of less than $180,000. These trusts are almost certainly not being used for tax avoidance purposes because the 39% tax rate on personal income does not kick in until income is above $180,000 anyway. 

The IRD's own data shows that moving from a 33% to 39% tax rate would result in 89% of all trusts being overtaxed – that's tens of thousands of Kiwi families!

, this is nothing more than a tax grab. According to IRD modelling, the change will suck in an extra $350 million per year for the Government.

We need to remind the Government of their promises to cut taxes and wasteful spending. No one else will.

Friend, every week, we highlight to you how the Government continues to waste money yet they have decided to reach for the easy option – which just happens to be in your pocket.

Friend, will you chip in to join the fight to ensure that this is a government that cuts waste, not one that hikes taxes?

Labour created a problem when they hiked up the top income tax rate, misaligning it with the trust tax rate. Rather than reversing Labour's tax hike, the new Government is doubling down with a tax hike of their own. Aligning the income and trust tax rates at this new, higher level effectively locks in the legacy of Grant Roberston's tax policy.

We do not have a tax problem in this country, we have a spending one. Government has spending increased by 67% since 2017 yet we have almost nothing to show for it. We're asking for your support  so we can force the Government to stick to their word: cut waste, not hike taxes.

Friend, I'm afraid that, unless we keep the pressure on, the Government will continue to implement the tax policy of the Labour Party that would wreck the economy, fuel inflation, and make us all poorer in the long term. 

The bureaucracy, media and Labour's union mates at the CTU want you to believe that National are slashing core frontline services to fund tax relief for their wealthy mates. The reality couldn't be further from the truth.

Already we have seen u-turns such as on the App Tax and Digital Services Tax which, again, National specifically campaigned against and said they would scrap.

In fact, despite the widely reported spending reductions, the Government continues to tax and spend even harder than during the Jacinda Ardern era.

Even after the proposed income tax relief, real income tax rates (after adjusting for inflation) will be higher than what they were during the first four years under Jacinda Ardern. 

We can't let fearmongering by groups who want to tax and spend more of your money force the Government to take the politically easy route of hiking taxes or piling on even more debt. 

This is the raison d'etre of the Taxpayers' Union.

, we can't fight for a fairer, more efficient, more competitive tax system that rewards risk and hard work, without your support.

>> Make a confidential donation using our secure website here <<

Thank you for your support.

Jordan Williams Executive Director New Zealand Taxpayers’ Union.

Ps. I know many of our supporters breathed a sigh of relief when we had a change of Government. But unless the new Government changes policy direction, New Zealand will continue to drift, and underperform relative to our cousins overseas. Your support to the Taxpayers' Union allows us to keep the new Government to its word and get New Zealand 'back on track'.