IGPS Director talks tax fairness in Herald article

Institute Director Simon Chapple’s “trenchant submission on tax” reported in the New Zealand Herald.

Money from tax rebates

Perhaps the most unfortunate restriction on the scope of the Tax Working Group's task, from the standpoint of fairness, is that it has been instructed not to consider the interaction between the tax system and the transfer (welfare) system.

Victoria University of Wellington economists Simon Chapple and Toby Moore, in a wide-ranging and trenchant submission to the Tax Working Group, argue that this makes no sense.

It is the net effect of both tax and transfers which reduces the stark inequality of market incomes into the (still substantial) inequality of disposable incomes.

And, it turns out, less so here than in most other developed countries. Officials, in a background paper for the working group on tax and fairness, point out that the OECD reckons New Zealand has the fourth least redistributive tax and transfer system among 30 rich countries it looked at.

Read the full article by Brain Fallow - 'Who said tax was meant to be fair?' .