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Cullen Signals No Change In Top Tax Rate

Fuseworks Media
Fuseworks Media

Finance Minister Michael Cullen indicated in
Parliament today that the tax cuts he will announce in the May 22
Budget won't include a reduction in the top rate.

After a grilling yesterday, Dr Cullen again faced probing questions from opposition MPs about his intentions.

When a series of answers didn't shed any light on them, ACT MP
Heather Roy asked him whether he could foresee a situation ever arising
when he would abolish the top tax rate of 39 cents in the dollar.

"If the member is fishing about the budget I think one thing
people aren't expecting is a cut in the 39 cent rate," Dr Cullen said.

"I note indeed the National Party at the last election didn't promise a cut in the 39 cent rate."

Dr Cullen agreed that the 39 cent rate, introduced after Labour
won the 1999 election, was now gathering more revenue than it did in
its first year.

He said it brought in $393 million in the 2000/2001 year and in
subsequent years the figure increased to $447 million, $494 million,
$540 million, $616 million, $699 million and $791 million.

Ms Roy said he was "fleecing hard-working taxpayers by much more than he anticipated even in his wildest dreams".

Labour MPs countered the opposition by asking Dr Cullen how much
less tax a single earner family with two children was now paying
compared with 1999.

He said those families now paid $1941 in tax a year compared with $4655 in 1999.

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