Tax
Summary
The ad claims that for every $100 the "super-rich" make, they pay $9 in tax, while a teacher pays $22. The $9 figure closely reflects Inland Revenue's finding that the median effective tax rate for 311 high-wealth New Zealand families was 8.9% when tax was measured against broad economic income, including capital gains. The teacher comparison is broadly consistent with Treasury modelling of middle-income effective tax rates, but the ad does not explain that these are effective tax rates using a broad economic-income measure rather than ordinary statutory income-tax rates.
Official Inland Revenue research found that high-wealth families paid a median effective tax rate of about 9% when tax was measured against broad economic income, while many ordinary earners faced substantially higher effective rates. The comparison is broadly valid, but it does not mean wealthy people literally have a 9% statutory income-tax rate.
Score Breakdown
Factual accuracy
Weight: 40%
Context fairness
Weight: 30%
Evidence quality
Weight: 20%
Visual/audio fairness
Weight: 10%
What the ad gets right
- +Inland Revenue's High-Wealth Individuals Research Project found a median effective tax rate of 8.9% for the 311 high-wealth families studied when tax was measured against economic income. ([Inland Revenue][1])
- +Rounding 8.9% to $9 of tax for every $100 of economic income is a fair representation of that result. ([Inland Revenue][2])
- +Official analysis accompanying the high-wealth study found that many middle-income New Zealanders faced materially higher effective tax rates than the high-wealth group. ([The Beehive][3])
- +The low high-wealth effective rate largely reflects the inclusion of economic gains, particularly capital gains, that are not necessarily taxed as ordinary personal income. ([Inland Revenue][4])
What the ad gets wrong or leaves out
- −The ad does not explain that the $9 figure is an effective tax rate based on 'economic income,' which includes income such as capital gains that may not be taxable under existing income-tax rules. ([Inland Revenue][1])
- −It can therefore be mistaken for a claim that wealthy people face a statutory 9% income-tax rate, which they do not.
- −Inland Revenue found that the same high-wealth families had a median effective tax rate of about 30% when measured only against their taxable personal income, showing how strongly the result depends on the definition of income used. ([Bell Gully][5])
- −The high-wealth research examined 311 selected families and covered historical income and wealth information; it was not a measurement of every wealthy New Zealander. ([Inland Revenue][1])
- −The exact $22 teacher figure depends on the assumptions used for the example household and should not be interpreted as a universal tax rate paid by every teacher.
- −The phrase "That's cooked" is a value judgement about fairness rather than a factual claim.
Detailed Verdict
The central comparison has a genuine basis in official research: the high-wealth group had a median effective tax rate of about 9% on broadly defined economic income, while typical wage earners could face substantially higher effective rates. The ad needs context because those percentages are not ordinary statutory income-tax rates and depend on including untaxed capital gains in the definition of income.
Report an issue or submit a correction
Parties and campaigns can submit a right of reply. Anyone can request a correction if they believe this analysis contains an error.