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Fast action ruled out by Key on rort by rich
Submitted by Kohia Dennison on Wed, 08/19/2009 – 13:41
As per the media reports, immediate move is being ruled out by Prime Minister John Key, for forbidding well-off families rorting the Working for Families scheme. Mr. Key said that he will wait for a high-powered tax review group to recommend changes in December.
It has been forwarded by the Treasury and the Inland Revenue Department that over 9700 families claiming tax credit, also own rental properties, and claim losses on them to offset their other income.
Others who have high incomes and want to lower their taxable income use trading companies, sheltered within trusts. This allows them pocket thousands of dollars in tax credits that otherwise would go to struggling low and middle-income families.
After the rorts were highlighted by The Dominion Post, Mr. Key said yesterday: “I think we can be pretty sure they are rorting the system. The question is what happens next and what alternatives there are.”
He added, “I think we’ll leave it to (the tax working group) as they look at the overall design of the tax structure to come up with some recommendations.”
It should be noted that taxpayer dollars of the rest of New Zealand were being taken by those structuring their tax to receive WFF, even though they were well off.
Mr. Key said: “I don’t think that’s fair.” But he did not believe Working for Families was fatally flawed, and added: “Right from the get-go we have always been of the view it’s subject to these sorts of abuses.”