I am doing some work after the previous post on tax spend, and here are a few top line results so far. I want to end up with spreadsheet, as Rowan did a couple of years back, where you can enter your income and see the spend.
However income tax is only one of several ways the Government obtains money – with the largest source is rather surprisingly Company Tax. (Source)
I was also surprised at the size of Customs tax, until I saw that 64% of it as GST charged on imports, with the remaining $387 million excise and customs duty. Adding that GST to the main amount would make GST the second largest source of income, and then just by a whisker.
So personal tax, while it affects most of us, is only the third biggest source of tax.
It’s quite different to the USA’s system, where personal income tax is about 50% of the Federal take, Social Security taxes are most of the rest and business taxes are absolutely trivial. The State’s take a bit of tax from business, but across the entire tax system it is only 13%, while income tax is 31%, Social security 22% and property taxes 25%.
I absolutely prefer the NZ system with the tax burden spread relatively evenly across the different sources.
Digging into the department vote (how much is budgeted) and projected revenue numbers was also interesting – here are a few:
The Transport vote attracts a decent swath of revenue – most from Road User Charges and the rest from registrations.
Energy revenue, while relatively small, is mainly from petroleum royalties, with almost all the rest coming from the electricity industry.
The IRD costs 13.5% of the money it raises. That’s higher than I thought.
The Finance vote is offset by a good amount of revenue, but half of that is finance charges to other Departments – for borrowing money I guess. The rest of the revenue is mainly from interest ($538m) and SOE dividends ($466m) along with a big ‘other’ bucket.
Our courts don’t pay for themselves. Add in $1.4 billion for Corrections and it is a pretty sorry picture. We can do better – and legalising activities like drug consumption would be a start.
More to come in a another post.