The other day, DPF posted this chart.
If you have even just one child you do not pay any income tax until you are earning $42,000! And you keep receiving WFF until you earn $74,000.
With two kids, then your family pays no income tax $50,000 of income. And you receive WFF until you earn $89,000.
If kid number three turns up, then you pay no tax until $56,000 and you receive WFF payments until you income exceeds $105,500.
It made me wonder, exactly how do the effective tax rates look when you figure in WFF? How deeply negative do the figure go?
So I complied the below. Tax amounts taken from here, Working for Families from here, with the following assumptions applied:
- All children are under 12
- Qualifies for the in work tax credit (about $60 for most people)
- One partner is working
- All income from salary or wages
I went up to 5 children, at $5,000 intervals. Click on the chart for full size
Are these figures correct??? No wonder this country is in the mess it is. Thanks for putting this together. Just worked out that having a 3rd child will give me a $125 a week. Sadly that is the way some people think.
The big question for me is how does an economy and also a society sustain an something like this??? Little wonder we have a dependant culture with no concept of personal responsibility.
– More children = more expenses = more GST to pay (incidentally GST is up)
– More children = more population = bigger economy
– With WFF, parents still have to work and earn income
I have one child and I didn’t realize that I’m not paying tax up to $42K. I guess it’s my time to get a break! I felt like a cash cow under labour
But I don’t think I can forgive John Key for the anti-smacking bill … contemplating to vote for ACT
This budget is good for NZ, it would persuade many to stay in the country (those high income earners like doctors, lawyers, etc). People that labour gov alienated.
Actually Sid, you are wrong.
Only the “in work tax credit” actually depends on you being in work. Check the link on the calculator above, it’s about a 5th of the payment.
You’re right too. And with the tax cut coming soon … looks like an election sweetener
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