How much tax does John Key pay compared to a minimum wage worker?? – Minto
Posted on August 26, 2014 by admin in John Minto, Press ReleasesMANA Movement Economic Justice spokesperson John Minto is calling for a radical overhaul of New Zealand’s taxation system with calculations showing that a minimum wage worker pays a ten times higher tax rate than the Prime Minister.
- Minimum wage worker 28% tax
- Prime Minister 2.8% tax
“The minimum wage worker on 40 hours per week earns $29,640 and pays $4,207 in income tax and $4,149.60 in GST giving a total tax of $8,356.60 or 28%of income”, said John Minto, MANA Movement Economic Justice Spokesperson.
“On the other hand the Prime Minister earns $428,000 from his PM’s salary along with this year’s $5,000,000 increase in his wealth (according to NBR’s rich list) which gives him a total income of $5,428,000. On this total income he pays just $132,160 in income tax and approximately $21,400 in GST giving a total tax of $153,560 or 2.8% of income”, said Minto.
This is a national embarrassment. Those least able to pay are under a heavy tax burden while the super-rich pay peanuts”.
“The National government and its attack bloggers refer to the working poor as scum, bludgers and ferals but it’s clear the real problem is with the top 1% of income earners who get all the benefits of taxpayer funded facilities and services but don’t pull their weight paying for them”.
“Cleaners, fast-food workers, hospitality workers and security guards are all heavily subsidising the lifestyles of the superrich”.
These figures show we need an overhaul of our tax system so the Prime Minister and his rich-list colleagues pay their fair share.
MANA Movement policy addresses this by – A robust capital gains tax paid at the same rate as the person’s income tax
A financial transactions tax on currency speculation to replace GST (Note: GST hits families on low incomes the hardest because the poorest 10% of income earners pay 14% of their income on GST while the wealthiest 10% pay less than 5% of their income on GST)
Higher tax on higher incomes
An inheritance tax on estates over $500,000. (National abolished inheritance tax in the early 1990s allowing wealthy family dynasties to flourish at the expense of everyone else.
- For further information please contact John Minto, MANA Movement Economic Justice Spokesperson (022) 085 0161
Chris Sullivan says:
Post Author August 26, 2014 at 1:15 pmAre we sure John Key actually paid no tax on his $5,000,000 wealth increase ?
Caleb says:
Post Author October 26, 2014 at 1:52 pmHis increase in wealth was most likely capital gains and so not taxable. He’s already rich, so he doesn’t have to work to make money anymore.
Bullrush says:
Post Author August 26, 2014 at 3:26 pmAlthough I agree with the general premise of this, an increase in wealth is not an increase of income which is what every detractor will easily point out.
You need to show the relation between wealth and income to show the inequality of this situation fully.
keef says:
Post Author September 1, 2014 at 11:17 aman increase in wealth is not an increase in income …?
so let me get this straight … I start with $xxx in the bank and a year later I have $xxx + $5,000,000 … but that’s not income, it’s just extra wealth …
yeah, right
Nothing Is Ever Free says:
Post Author September 16, 2014 at 8:05 pmAn increase in ‘wealth’ is:
a) **Not** income (as it can decrease the next day if share value decreases)
b) **Not** money in the bank ( it is shares on paper)
Money in the bank is money in the bank.
So to get is straight… You start with $xxx in the bank and a year later you have $xxx in the bank + a paper change in share value
Cam James says:
Post Author August 26, 2014 at 4:01 pmAccording to the information above, as a percentage, John Key pays 35.9% tax in an already progressive tax system. This is 7.9% more than minimum wage earners. The $5,000,000 increase in “income” could be a valuation of assets or money in a trust under a different tax scheme. Because the $5m earnt clearly isn’t a taxable income, it can’t be used when talking about his taxable PM income- which by the way he donates to charity. These numbers are based off the information above and aren’t 100% accurate because they don’t follow the varying amount taxed at each income level (total amount of tax increasing in proportion to the total income earned- a fair system if you asked me). I am aware that wealthy people evade tax and try hide funds from the IRD, this in no way though reflects John Key and the tax he pays- at least he pays his taxes.
LilaR says:
Post Author August 26, 2014 at 8:29 pmCam, please don’t trot out the old chestnut about Key donating his salary to charity. The truth is he *once* said he *might* donate *some* of it to charity. There is absolutely *no* evidence that he has ever done this.
Ange says:
Post Author August 26, 2014 at 4:53 pmI’m pretty sure, john key does not draw a salary even though he is entitled to.
Or if he does he donates it to charity.
Peter says:
Post Author August 26, 2014 at 7:23 pmWhen are you all gonna realise Key is corrupt to the bone and soon anyone supporting him and National will be tainted and targeted for their idiocy!!! You are one of these!!!
Nothing Is Ever Free says:
Post Author September 16, 2014 at 8:10 pmPeter,
The ‘reasoning’ outlined by John Minto above is corrupt…
The fact that this website needs to present irrational argument demonstrates they a) have nothing else to offer b) are confused.
I suspect it is b) as they are trying to help poor people but are unfortunately going about it non-objectively using flawed argument and advocating forced charity
LilaR says:
Post Author August 26, 2014 at 8:30 pmOn what evidence do you claim this, Ange? Please see my previous reply to Cam.
Renee says:
Post Author August 26, 2014 at 8:40 pmDONATE TO CHARITY?! Seriously?!
You must be truly lost.
It should be fairly obvious to the public by now that the only reason Key got into politics was to make more money for himself.
Nick says:
Post Author August 27, 2014 at 2:29 pmAre you serious? his salary as PM is a fraction of what he could/did earn when he was trading. Your ignorance makes me sick.
James says:
Post Author September 6, 2014 at 4:11 pmYour support for corrupt politicians makes me sick
Nothing Is Ever Free says:
Post Author September 16, 2014 at 8:12 pmerrrrr…. no
He can make far more money in investment banking than being in politics.
Proof? – that’s precisely what he already did.
Mike M. says:
Post Author August 26, 2014 at 8:55 pmI hope you realise that he gives to charity for the tax benefits? Don’t be lazy. Educate yourself.
SAM says:
Post Author August 28, 2014 at 3:59 pmAh, no he doesn’t. He never has.
A few years ago he said he might but it never eventuated
Graham N says:
Post Author August 26, 2014 at 6:03 pmSo which charity does he give his money too? How much and where can we find that information?
Nick K says:
Post Author August 26, 2014 at 6:50 pmHow on earth are low paid inviduals subsidising the super rich ? if you view each person as what they are, an individual then one person shelling out around $150k in tax will be subsidising alot of people who just sit there and do nothing!
It’s not the fault of the rich person that other people struggle, you work for what you get in life…end of.
I’d hate to see the state of the Govt coffers should all the “super rich” tax payers decide to leave nz …
Mike M. says:
Post Author August 26, 2014 at 8:36 pmThe fact that you think the rich aren’t creating a problem just shows how little you know about inequality, and how the rich make their money. Please educate yourself. There’s plenty of youtube videos, and documentaries for you to watch. Maybe even pick up a book. It’s basically the biggest pyramid scheme in the history of mankind. The few at the top are accumulating all the wealth, and those under them cannot keep up with the cost of living. The middle class like to spout off about beneficiaries, and lower income families living off the state, and wasting money but they don’t realise that the poverty line is inching ever closer towards them.
Nick K says:
Post Author August 27, 2014 at 8:03 pmIf someone works hard, educates themselves ..takes on risk etc and ends up doing very well for themselves why should they be punished for it ?
I totally agree we should all pay our fair share in taxes and there are many ways to be creative to avoid tax which I don’t agree with.
We are all lucky to be living in a country where there is opportunity to get ahead if we are prepared to get off the couch and go and do it, sure there are plenty of people who cannot have a go due to medical reasons etc and they should be looked after but opportunity is there for those who seek it.
Shaneo says:
Post Author September 5, 2014 at 9:58 pmSound like u spend too much time watching you tube videos and documentaries instead of working !
Richard says:
Post Author August 27, 2014 at 11:20 amagreed Nick. Id like to know how much tax kim dotcom pays. Fair question i think considering we’re hitting up the rich
Cameron says:
Post Author August 28, 2014 at 10:28 amYour obviously so stupidly uniformed
Informed says:
Post Author August 28, 2014 at 9:53 pmYou’re
Steve says:
Post Author August 26, 2014 at 7:19 pmhttp://www.ird.govt.nz/how-to/taxrates-codes/itaxsalaryandwage-incometaxrates.html These claims don’t add up to what the IRD website claims. Alson where does GST come into it if your on a wage and not self-employed?
Jason says:
Post Author August 26, 2014 at 8:15 pmI am sick of john key avoiding answering questions fully by the media.
I never know wheter he telling the truth or not
Ronan says:
Post Author August 26, 2014 at 9:00 pmThere are a few ways that the poor subsidise the rich.
When someone earns $150 an hour contracting to the government, then all of that money is coming from tax payers. It would take dozens of workers paying tax to pay a full time contractor of which their are many, and believe me, they all claim to be a lot better at their job than they actually are.
But the really interesting point, is that incomes are arbitrary. You can’t say definitively (for example) that one hour at a desk job is equivalent to making 300 bread-rolls. The fact is that futurization and technology have made a lot of processes more efficient. Worker productivity has increased, despite our work hours going down.
It is also worth noting that there are factors influencing wages such as unemployment, which drives wages down. This is done by very tricky people in power to maximise their corporate profit.
Simply put we need to stop relying on the market to achieve fairness. We need to actively create it. Otherwise we are no better than animals.
Olivia says:
Post Author August 27, 2014 at 9:41 amOk so just because John Key earns more we should punish him?? Because it’s “fair” on those on minimum wage to pay less and those who work hard should have to pay more??
I’m on minimum wage currently and I am working my butt off at Uni to get a degree and earn a good income. I work hard, so when I get a high paying job because of my degree I should be rewarded not punished.
Why should I have to pay more tax than someone who chose to work at McDonalds full time and earn minimum wage? Why punish people for working harder and earning more?
It’s not inequality, it’s work ethic
Richard says:
Post Author August 27, 2014 at 11:17 amHow much tax did Kim Dotcom pay?
TheContrarian says:
Post Author August 27, 2014 at 3:13 pm“I hope you realise that he gives to charity for the tax benefits? Don’t be lazy. Educate yourself.”
There is NO tax benefit in giving to charity – you can only claim back 1/3 of what you donate.
Educate yourself.
Greg says:
Post Author August 27, 2014 at 5:22 pmLies, damn lies, statistics, and John Minto’s tax calculations.
Oh dear, John, where’s the GST paid by JK in your calcs?
And including unrealised capital gains as taxable income?
If every NZer had to pay that say goodbye to farming, successful businesses, home ownership, investment property ownership (the employers no less).
Gosh we’d have the government owning everything…………..that political system has died if you hadn’t noticed……even if it was dear to your heart!
Your figures are a joke and no more than a totally distorted political rant. No surprises there though……..
Stuart says:
Post Author August 27, 2014 at 6:02 pmJM’s astute and educated commentary on tax regulation in NZ is a great indicator of just how well off we will all be if Internet NA get any sniff of actually running this place: confused by numbers and books that dont balance.
Ripper says:
Post Author August 27, 2014 at 9:40 pmI can’t believe Minto and his ilk. My biggest fear is that this side show gets near parliament when Cunliffe tries a foursome and IM party has a say and launches an attack on the hard working higher earners. I’m not rich but I work hard and earn well and I am very proud of that. With PAYE and GST I’d be sending well more than a hundy to the govt coffers each year and will continue to do so. On top of that I pay my families health insurance, send my kids to private schools ( that aint easy and sacrifices are made) and never put my hand out so I’d think that i was a pretty good citizen receiving less than my share of govt funded services whilst paying more than average in taxes. So, the tax rates were eased a bit under National but I fully expect to pay tax at give or take 30% and at the current rate I’m fine with that because it helps to make NZ a great place. Why, John Minto, would you feel the need to take more from me? I would be very bitter if you did because it is absolutely not fair. Leave me alone.
That john Key example is pathetic. He has paid more tax in one year than you have ever.
Ulf says:
Post Author August 27, 2014 at 11:50 pmMr Minto, leaving aside the $5,000,000-argument, which really makes no sense whatsoever, I really have a beef with this:
“The minimum wage worker on 40 hours per week earns $29,640 and pays $4,207 in income tax and $4,149.60 in GST giving a total tax of $8,356.60 or 28%of income”
$4,149.60 in GST would mean this person would need to spend $27,664 – based on your numbers given that’d be more than the minimum wage earner earns after tax.
Or, the other way around, income after tax is $25,433. Take away about 40% of that net income spent on rent (no GST on that) leaves $15,259.80. If every single cent of that was spent on goods and services, the total GST generated would be $2,288,97. Combined tax $6,495.97 or 21.9%.
Basic number crunching Sir, not rocket science. To think you want to be in government…
Phil says:
Post Author August 27, 2014 at 11:59 pmWith the greatest respect John these calculations show you have as much understanding about economics as Asenati Lole Taylor has about banking. A family of 4 earning double the minimum wage pay virtually no effective tax due to WFF etc. You be more credible attacking people who live in NZ but repatriate their income elsewhere e.g. KDC. Surely you don’t actually believe what you’ve written? By the way a friend just brought an old house in your street for just under a million dollars so welcome to the middle classes.
Justin says:
Post Author August 28, 2014 at 10:21 amEveryone talking about what’s ‘fair’ and what not. Would the definition of ‘fair’ be that every single person over a certain age pay the SAME $ amount in tax?
People also talk of Key being corrupt, he’s just a bent pawn in a broken system. Chuck Key out and there is a line of other crooks ready to take his place at the drop of a hat.
There is no crueler tyranny than that which is perpetuated under the shield of law and in the name of justice.
Charles de Montesquieu
We need a new system…
Ulf says:
Post Author August 28, 2014 at 3:39 pm…and what exactly are you suggesting Justin?
Surely, if you feel so strongly about Key being corrupt (how so, care to explain without stating at “every knows, just look it up, educate yourself”) you must have some inkling as to what that new system should look like, no?
How would it work out if everybody paid the same amount of tax, in $, not % of income? I’d wager a guess that it’d mean those on lower incomes paying more in %-terms than those on higher incomes. Fine by me, as I would consider that fairer than what we currently have.
Those that earn more, spend more, so GST comes into play here. Other than that, I don’t believe I am making use of any more services than those on a lower income.
I’ll leave you with this – might want to pass it on to Mr MInto:
===========================
THE TAX SYSTEM EXPLAINED IN BEER
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100…
If they paid their bill the way we pay our taxes, it would go something like this…
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7..
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do..
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by six is $3.33. But if they subtracted that from every body’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man, “but he got $10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
Adam says:
Post Author August 28, 2014 at 5:56 pmWhere in the world would this wealthy man run to to pay lower taxes smart guy? Just about everywhere in the developed world he went he would pay higher tax being a high income earner.
Ulf says:
Post Author August 28, 2014 at 6:56 pmReally? That’s all you’ve got?
So in your view it’s OK to screw higher earners over just because they’ve got nowhere to go? How about some constructive criticism or some properly laid out arguments.
He might run away to a country were he still pays high or even higher taxes, but that could well be a country which is a lot more balanced and “high income earner bashing” hasn’t developed into a national sport.
BTW, let’s not forget what this is about. It’s not about me making a point or you failing to make one. This is about Mr Minto either being plain stupid for not getting the basics right, which would be bad enough considering he wants to be in government, or for deliberately lying.
OK, so let’s assume I’m not as smart as I think I am. What have you got to say about Mr Minto’s tax examples, including the $5,000,000 which are clearly not *income” – and if they were, see James’ post below.
I’m listening.
Nick K says:
Post Author August 31, 2014 at 1:52 pmIt wouldnt matter Adam……it would just mean the NZ tax take got that little bit smaller
James says:
Post Author August 28, 2014 at 2:50 pmSo John pays about 40% on his pm salary and assuming the 5 million is “income” from interest or investments then resident withholding tax of 33% would apply. What’s the problem?
s.a says:
Post Author August 29, 2014 at 6:25 pmI have a mortgage and a young child and my rates keep going up? Houses were affordable 20 years back. These politicians haven’t doent enough for hard working rate payers. How is this democratic when we don’t have a say why our rates increase constantly. F u jk. Bring back Helen
Ulf says:
Post Author August 29, 2014 at 10:10 pms.a., what rates are you talking about?
Interest rates? Well those have been as low as never before in recent years. They were a lot higher under Helen.
Council rates? Not something John Key (or Helen for that matter) have all that much control over. That’s your council and mayor and guess what? Every three years you have the democratic right, and I’d say duty, to get involved and vote for those that will do the best for you.
Council rates though, if that’s what we’re talking about here, have nothing to do with income but all with property value and everybody gets hit hard. Ask any Aucklander in particular.
s.a says:
Post Author August 30, 2014 at 1:47 amOf course the prime minister has control over councils. They use puppets like local mayors. Guess what I do vote every 3 years, guess what the councils agenda doesn’t change from what they want. Guess what houses didn’t cost as much when Helen was in the seat so a few years of high intrest on cheaper living conditions isn’t as bad. Regardless of how and why its who. The prime minister should look after its hard working rate payers without the nonsense.
Ulf says:
Post Author August 30, 2014 at 11:05 pmYou’re right s.a. – what you say makes perfect sense. Not.
Jessica says:
Post Author September 7, 2014 at 4:22 amI just did the maths on the ird website and including the acc levy a min wage worker working 40 hours per week pays 15.6% based on the current minimum wage found on dept of labour website.
My single income family (hubby is a nurse) and I am on maternity leave pays 23%, again using ird income tax calculator.
If John key pays 3.8% then this seems very unfair and it looks to me like our middle income family gets the worse deal.
You should check your figures again, either way it’s not in.
Michael says:
Post Author September 15, 2014 at 10:20 amAccording to your calculations JK is paying almost 20 times as much tax as the minimum wage earner. So looks like he is funding a lot more of the services and pulling his weight. Your scare mongering is ridiculous John and for someone who is an economic spokesman you are blatantly fudging the numbers and coming up with outrageous statements about inequality.
Ricardo says:
Post Author September 19, 2014 at 1:30 pmThis is exactly why John Minto should never be near parliament. he should stick to protesting and leave economics to economists.