Tax wealthy to help cut emissions, author says
It is ‘‘pretty pointless’’ telling New Zealand’s poorest families to buy an electric vehicle to help reduce carbon emissions, author Max Rashbrooke says.
The country’s poorer households often couldn’t afford to buy environmentally friendly products in the shops, the academic and author of several books on economic inequality in New Zealand said.
Rashbrooke said New Zealand’s richest families by contrast had a duty not only to do more to cut their carbon footprint, but to help fund nationwide efforts to do so.
New Zealand’s wealthiest 10 per cent of people emitted about three times more carbon than the national average, figures from the World Inequality Database showed.
Wealthier people generally flew more and bought a wider range of goods, which inevitably had a higher carbon footprint, said Rashbrooke – a senior associate at the Institute for Governance and Policy Studies at Victoria University of Wellington.
‘‘Those who are emitting the most need to reduce the most.
‘‘[But] climate change is fundamentally a collective problem that needs collective solutions.’’
Wealthy people should accept they needed to pay more to help reach emissions reductions targets – helping poorer people who stood to suffer most from climate change, he said.
‘‘Poorer people are going to lose their jobs more often because of the industries rendered redundant by climate change. It’s poorer people who are going to be less able to afford some of the costs that climate change will impose.
‘‘So we’re probably going to need a greater tax contribution from wealthier New Zealanders to cushion the effects.’’
Taxing the wealthy more could help fund things like free public transport and other initiatives, such as increased renewable energy generation.
But there had not been a big push in that direction yet, Rashbrooke said.
‘‘We have a tax system that I think is quite unfair in the sense that it asks far too much of the poorest New Zealanders and far too little of the richest ones.’’
Every dollar of a person’s income was taxed, compared to countries like the UK and Australia, where ‘‘you can earn quite a bit at the bottom end of the scale before you pay any tax at all’’.
New Zealand should follow those countries in taxing capital gains and inheritances (a tax abolished in New Zealand in 1991).
‘‘IRD research last year showed that the wealthiest New Zealanders, people with over $50m each in net worth [around 400 people], often paid a lower tax rate than people on the minimum wage because they take so much of their income as capital gains, which isn’t taxed at the moment, and because they find other ways of reducing their tax bill.’’
Rashbrooke is due to speak to the Nelson Tasman Climate Forum on Tuesday about the role of economic inequality in the climate crisis.
New Zealand was in the top third of OECD countries with the greatest disparities between rich and poor, with someone in the richest 10 per cent earning about nine times more than someone in the poorest tenth, Rashbrooke said.
Countries with the biggest gaps between rich and poor were also said to have the highest emissions, he said.
‘‘As well as encouraging wealthy people to reduce their emissions to fight climate change, it is also reasonable to say that we should try to reduce economic equality at source.’’