As wages have increased, more people have been pushed into higher tax brackets. Without such adjustments, taxpayers have been facing higher effective tax rates over time.
Personal income tax thresholds have been increased for the first time since 2010 – or 14 years ago!
It makes sense and is logical for regular indexing of tax thresholds going ahead, and for the tax system to be more equitable and responsive to economic changes.
Its in fact surprising that it has taken such a long time. I think politicians are to blame here.
– In 2008, Labour legislated for indexation, which was repealed by National after the subsequent election.
– In 2017, National enacted tax band movements, but were then repealed by the following Labour Government.
