Tuesday, 29 April 2008

Tax freedom day for New Zealand (updated)

I notice from this New Zealand Business Roundtable press release that tax freedom day (pdf) for this year is today April 29. This is at least as far as the tax burden imposed by central government is concerned. The press release notes
... 29 April is a red letter day because it represents the day in the year when the average New Zealander stops working for the government and starts working for themselves.

“In other words it means that since the beginning of January the average New Zealander has nationally spent one third of the year working for central government.”
Note that the
... calculation of 29 April was based on central government core expenditure, which amounts to 32.4 percent of gross domestic product (GDP) according to the 2008 Budget Policy Statement.
But don't get too happy since
... the core central government spending measure understates the true tax burden because it leaves out or underestimates elements of government spending such as local government outlays. If these are included, total government spending in New Zealand, as measured by the OECD, is projected to be 42.4 percent of GDP in 2008.

On this basis, Tax Freedom Day would fall on 4 June.
But it gets worse since
[t]his broader measure highlights the extent to which New Zealand is a relatively high-taxed country. Compared with New Zealand, Tax Freedom Day on this measure comes a month earlier in Australia and Switzerland (4 May), about three 2 weeks earlier in Ireland (10 May) and Japan (14 May), and more than two weeks earlier in the United States (18 May).
So back to work, the government wants more income from you!

Update: Not PC is Still waiting for Tax Freedom Day.

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