Taxation for New Zealand’s future: The introduction of New Zealand’s progressive income tax in 1891

Abstract

The Land and Income Assessment Act of 1891 introduced both New Zealand’s first income tax and the principle of progression into New Zealand’s taxation system. Its passage through Parliament provided a rare opportunity for Parliament to discuss taxation policy at the level of broad policy, rather than at the level of specific measures. The 1891 Parliamentary Debates provide evidence of the thinking of Parliament on such fundamental issues as the legitimacy of taxation, the focus of taxation, and the question of progression – discussions which continue to this day. This article reviews these parliamentary discussions by discussing the contemporary context, and how the 1891 Bill was defended and opposed. The resulting discussion enhances understandings of the past and provides a basis for further interpretation and application.