'High earners will leave NZ'

TIM DONOGHUE
Last updated 05:00 15/07/2011

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Lawyer Casey Plunket, whose personal tax rate would increase from 33 to 39 cents in the dollar under Labour as someone who earns more than $150,000 a year, says it would lead to more high earners heading overseas.

At the moment those earning more than $70,000 pay 33 cents tax in the dollar.

"Such a tax rate would make it more attractive for people to work in Australia," said Mr Plunket, who works for Chapman Tripp. "Most of them will still be paying tax in Australia at higher rates but they will be earning much higher incomes.

"We need every advantage we can over Australia to keep our higher-earning and more-productive people in the country."

He said Labour should also move to ensure that high earners could not use family trusts to declare lower incomes. "At the moment the trustee tax rate is 33 per cent and the personal tax rate is 33 per cent so it all works well."

He said Labour's overall package was a poor one. "The crazy thing about removing GST on fresh fruit and veges is that people like me also get that break. I am happy to pay the GST on fresh fruit and vegetables. I don't need that tax break."

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