The Sheriff of Nottingham would be proud of how much tax we take from the poor to support the lifestyles of the rich. A series of three forums in Christchurch in June organised by EcuAction, an interfaith justice group, recognised that our tax system is seriously unfair and needs to change. Those on the lowest incomes pay much higher proportions of their income in tax than the wealthy and super-wealthy.

Each forum included an expert presenter and a faith respondent. In the first forum, John Minto (who has done extensive research into the NZ tax system) pointed out that GST is at the heart of this inequity. A person in the lowest income decile spends 14 percent of their income in GST, while those in the highest income decile spend less than 5 percent of their income on GST.

Income tax has similar distortions with IRD reporting that many wealthy Kiwis manage to declare incomes low enough to avoid the top income tax bracket! In taking income tax and GST together, workers on the minimum wage pay close to 30 percent of their income in tax, while the super-wealthy pay less than 5 percent of theirs.

This unfairness is hard-baked into our tax system. Wage and salary earners pay tax on every dollar earnt via PAYE and every dollar spent, via GST. But the wealthy and super-wealthy find myriad ways to avoid or reduce their tax responsibilities. This is unfair and morally wrong.

The wealthiest five percent currently own 37 percent of the country’s wealth and their share is growing. Meanwhile the poorest half of our society, who pay the highest rates of tax, have just two percent of the country’s wealth. Our “low-rate, broad base” tax policy is a key reason for this growing inequality.

What is the solution?

EcuAction is proposing to abolish GST and raise the $25 billion needed to replace it with three taxes which will shift responsibility to the wealthy and super-wealthy:

1. a comprehensive Financial Transactions Tax (FTT)

2. a Wealth Tax and

3. a Capital Acquisitions Tax.

1) The FTT would put a small percentage tax (0.1%) on all money transfers through banks and financial institutions. For the average person this would amount to about $2 per week in tax (alongside a saving of hundreds in removing GST) but would bring in large amounts from the high value money flows in areas such as currency trading which take place each day. Many countries have various kinds of FTT. Our proposal would bring in about $15 billion for the government annually.

2) The Wealth Tax would bring in about $10 billion and would apply only to the top 5 percent of income earners who would pay a small percentage tax each year based on their wealth. Wealth taxes are common in countries around the world and help in a small way to reduce inequality.

3) The Capital Acquisitions Tax would be paid when receiving a substantial cash windfall such as through a large inheritance.

The countries which already have FTTs, Wealth Taxes and Capital Acquisitions Tax are the same countries we like to compare ourselves to.

I was the faith respondent to John Minto’s presentation and commented on two references on taxation attributed to Jesus, namely “Render unto Caesar the things that are Caesar’s and unto God the things that are God’s” (Matthew 22:21) and the Luke 19 reference to Zacchaeus the unjust tax collector who told Jesus he would repay four-fold that which he had extracted unfairly from tax payers.

It's significant that a number of world church bodies including the World Council of Churches, the World Methodist Council and the Council for World Mission are advocating a Zac Tax (after Zacchaeus) to pay compensation to those affected historically by slavery, land alienation and other forms of colonialism. Echoes here of Treaty settlements in Aotearoa-NZ.

The second forum featured the effects of GST on low income people, with Trade Union Secretary Paul Watson and Rev Sheena Dickson of Aranui detailing their experience with those on the bread line. Sheena pointed out that after rent and other unavoidable charges she had families with only $60 left to feed themselves for a week.

The third and final forum concentrated on the effects of high and low incomes on the environment.

Dr Christine Dann, an environmental researcher and writer recounted how many of the early European settlers in Canterbury acquired considerable land and wealth and our streets still bear their names, whilst the landless and dispossessed Maori eked out a poverty-ridden existence. That inequality persists for many today. In that sense both high and low income people exploit the environment to sustain their lifestyles with unfair taxation accelerating the degradation of the environment at both ends of the income range. Rev Mark Gibson as faith respondent affirmed this and added that if we take seriously the history and advocacy of the biblical prophets and Jesus, we will stand up for justice and fairness in this our day.

What became apparent through the forum series is how much of an outlier NZ is on taxation.

We tax the poor more and the rich less than any other country we like to compare ourselves with. This suits the rich and big business but it doesn’t work for low and middle income earners.

It’s morally wrong to expect those on the lowest wages to subsidise the wealthy and super-wealthy through a Sheriff of Nottingham tax policy.

EcuAction’s tax proposal takes us in the direction of greater fairness and promotes dignity and self-respect for everyone.

The full tax proposal is at www.alternativeaotearoa.nz/new-page

I invite readers to give it consideration and if you want to join the national campaign for a fairer tax system and one based on true Gospel values of fairness and justice, please contact me on email: bhturner41@gmail.com or phone 021 129 4305.