Taxaphobes. They’re running amok in Parliament. Both the major parties have joined ACT in assuming that the voting public is as phobic about tax as they are. (We aren’t, but more on that later.) A few years ago, a Canadian website usefully defined a taxaphobe as being “someone who irrationally fears and/or compulsively opposes taxes.” As the Canadians put it:
Taxaphobes tend to irrationally fear and compulsively oppose taxes, even if they strengthen the economy, increase overall prosperity, constitute good fiscal policy, benefit the middle and working classes, are widely considered fair and reasonable, and redistribute dubiously or illegitimately obtained wealth from the ultra-rich to everyone else.
Most sane, sensible people readily understand that if people want a range of public services of consistently high quality – and the polls tell us that we do, by a large majority – then these have to be paid for by various kinds of taxes. Progressive taxation is how modern societies provide good and affordable services, avoid the evils of chronic income inequality, and invest in future prosperity.
Regardless, this past week has seen National once again overtly demonise taxes per se. A bed tax for example, is a fee paid (on a user pays basis) in order to help fund the modern facilities required to support our tourism sector. National was all for a bed tax – in Auckland, in Queenstown – until suddenly, it wasn’t. No new taxes! Apparently, local ratepayers will now have to foot the bill for the upgrades to the tourism facilities used by foreigners, and/or by wealthy Auckland couples jetting down for a ski weekend in Queenstown. No user pays rigour for them.
Except…in virtually the same taxaphobic breath, the Luxon government also announced a 4% cap on rates increases, a level significantly below the current rate of inflation. This rates cap will choke the ability of local government to raise revenue for quality local services (including tourism facilities) from ratepayers.
Taken together, these two policies will inevitably narrow the range of and quality of available public services, starve essential sectors of the economy and reduce the enjoyment of community life. At this rate, it will soon be only the services that the market economy chooses to provide– at a price! – that will be available to ordinary punters. Everyone who can’t afford the tab will be forced to make do with the dregs.
Degrading the concept
This degradation of public services is entirely deliberate. In the likes of Denmark and other parts of Scandinavia, people readily pay higher taxes because the quality and range of public services they get in return is real and tangible. Here by contrast, the intention is to break the social contract basic to the trade-off between taxes and services. We are being shunted into a downward spiral. The ideologues making policy are working to ensure that public services will soon be of such poor quality that the public will lose faith entirely in public provision, and the pressure to raise revenue via the tax system will decrease accordingly. Mission accomplished!
Yes, the politics of taxaphobia are pathological. The Canadians put it this way :
..Rational and well-adjusted people can easily recognize taxaphobes, as they display clearly self-destructive behaviour, arguing against their own well-being and long-term prosperity in favour of paying a few dollars less in taxes, in exchange for many dollars less in public services, less justice in society, and a weaker economy.
Furthermore, taxaphobes generally suffer from various delusions, such as delusions of a brighter future when wealth magically “trickles down” from the uber-rich they oppose taxing, or the delusions of grandeur that characterize the willing accomplices of the wealth-defence industry (lawyers, accountants, anti-tax lobbyists and propagandists…), who sell their souls for a nice paycheque, and end up dying of loneliness, emptiness, alienation, family breakups and associated illnesses, while sometimes also getting robbed in old age by former colleagues who share their approval of swindling the vulnerable.
The Big Tax Freeze
At the libertarian extreme, taxaphobes are deeply narcissistic. Since they don’t believe in society, they don’t think there can be such thing as a public good. The agenda that’s hiding in plain sight? National’s “No New Taxes” slogan means that they, and their mates in the corporate sector, will be insulated forevermore from having to pay their fair share of tax. “No new taxes” means National will freeze how the tax system goes about taxing wages (but not wealth) to the unfair degree spotlighted by IRD research in 2023.
That IRD research found that the median effective tax rate for a high wealth New Zealanders on their economic income was 8.9%, which is half the average rate of tax paid by wage-earning New Zealanders. Naturally, as soon as National won the 2023 election, it shut down this area of IRD research.
Hey Martha, look over there
Taxaphobia also enables a bait and switch. Over the past fortnight, National has largely succeeded in turning the election campaign into a referendum on the alleged “tax and spend” policies of its opponents. By doing so, National is seeking to ensure that this election will not be about the ruined state of the public health system, the soaring rate of unemployment, the steep rise in homelessness, the avalanche of business collapses, the exodus overseas of our best and brightest and all the other telling signs of National’s abject failure to “fix” the economy, and build for the future.
Instead, the coalition government is striving to make Election 2026 mainly about taxaphobia. Look, over there – Labour wants to tax and spend! It is such a scam. By international standards New Zealand is not a heavily taxed country. (On taxation levels, we’re roughly in the middle of OECD nations.) Where we are outliers is that our state revenues are heavily derived from income tax (on what people earn) and from GST (on what people buy.)
We keep being told that our tax system is simple and efficient. So is bank robbery. There are few significant taxes on the wealth derived from property speculation, or investment in shares, or wealth gained by inheritance, or income hidden in trusts etc. Almost alone among developed countries, New Zealand has no general capital gains tax, no inheritance tax, no compulsory contribution to retirement savings etc. Our simple, efficient tax system leaves the bulk of significant wealth (and the main methods of accumulating it) relatively untouched. The wealthy and their political minions aim to keep it that way. It is s a tax system that serves them well. No new taxes!
Footnote One: Despite the evidence of failing public services the media can be relied on to zealously police the boundaries of fiscal policy. Any social spending initiative is commonly met by the demand “but how are you going to fund it?” The tax option is off limits. So is the option of debt incurred by further state borrowing for productive investment. The residual media inference is that any social initiative must therefore be at the cost of cuts to some other area of social spending. Ultimately, the rationale for the state treating “ balancing the books” as a priority above all others goes unquestioned.
Needless to say, Labour has bought into this narrative as well. For example, in n his tireless efforts to rid Labour of any residual traces of leftism, Chris Hipkins has scrapped a proposal to bring in a tax on international streaming services. Think about it. Labour would rather kick Kiwi kids off social media than try to tax Mark Zuckerberg.
BTW, our mainstream media is not alone in its intolerance of deficits. As the US commentator Ezra Klein pointed out over a decade ago:
For reasons I’ve never quite understood, the rules of reportorial neutrality don’t apply when it comes to the deficit. On this one issue, reporters are permitted to openly cheer a particular set of highly controversial policy solutions.
Footnote Two: The grim reality is that the taxes that we are currently paying cannot deliver us the services that an ageing population will legitimately need and expect in future. This fact of life was recently spelled out by the economist Shamubeel Eaqub.
Footnote Three: Tax and spend is a bad thing? Not according to the polls. New Zealanders want to see a lot more spending on social services. That was also reported here. The findings of two Talbot Mills polls (in 2025 and earlier this year ) expanded on those sentiments:
… 66 percent agreed that New Zealand’s economic system was not set up to effectively to address issues like housing, healthcare and climate change. Sixty-eight percent supported billionaires being taxed more to fund public goods like healthcare, housing and climate action.
And another 37 percent were in favour of introducing a billion-dollar wealth cap to minimise the amount of wealth any person could legally hold.
These were is not new findings. In 2022, a National proposal to scrap the top rate on high income earners ran into serious public opposition:
The 1News Kantar Public Poll showed 65% were not in favour of cutting tax for those earning over $180,000, while 25% supported the higher earners paying less tax. Ten per cent did not know, or refused to answer.
Similarly in 2018, UMR polling found a high level of public support for raising taxes to better fund public services:
A majority of New Zealanders say they would support higher or new taxes to maintain funding for schools, hospitals and transport systems… A majority of people said top earners in New Zealand paid too little tax..
Yet regardless, both major parties are (in effect) lining up with ACT in not responding to this clear expression of majority public sentiment. Tax and spend? The public wants more spending on public services, and seems willing to expand the tax base to fund it, even if that means higher taxes.
Footnote Four: As a pathological condition, taxaphobia differs from forosophobia, which refers to the fear and anxiety that some people experience when filing their annual tax returns. Some of the psychological science about tax aversion is summarised here. Among the findings:
Labelling a monetary charge as a “tax” generated a more negative reaction than labelling it as a “fee,” although framing a monetary charge as a tax or a fee does not make any difference in financial terms.
Hmm. In the same “ Wow, who would have guessed it” category, the researchers also found that taxaphobia encourages tax evasion:
The perception of taxes as an emotionally charged sacrifice .. increases the acceptance of anti-tax behaviours, such as tax evasion..”
More to the point, the social scientists suggest that because of the emotional volatility around the subject, politicians can readily manipulate public opinion and design tax systems in less than optimal ways:
In tax and public finance, this tendency to make decisions as if with blinders on is problematic. As a result of it, skilful politicians can manipulate public opinion, and tax system design can be volatile on account of the possibility of eliciting preference reversals through purely formal rhetorical means. More troubling, the findings suggest a likely and persistent wedge between observed and optimal public finance.
Dear departed Dolly
Naturally, the set-list at Dolly Parton’s Auckland Town Hall concert in July 1979 did include “Jolene” “Coat of Many Colours” and her classic old school weepie “Me and Little Andy.” At that time, she was just beginning to add large numbers of rock and pop fans to her country music fan base.
Less predictably, the final song she sang that night was a slow, stark, almost a capella rendition of “Down From Dover” – an early song of hers about an unwed pregnant girl calling out in vain for the father of her child to come home and stand by her. It sounded like the lineal descendant of one of those Appalachian murder ballads from the 19th century, or earlier.
It also seemed an act of supreme confidence on her part, to send her new crossover audience out into the night with this beautiful, desperate lament ringing in our ears. Here’s the original 1970 version:
Incidentally… a few years ago, Graham Reid found an old NZBC radio station copy of a Nancy Sinatra/Lee Hazlewood album where the state broadcasting censors had carefully written a stern “Do Not Play “ label across Nancy & Lee’s version of “Down From Dover.”
Clearly, this was another example of the stupid broadcasting censorship practices researched so well recently by Nick Bollinger. In this case, the NZBC censors wouldn’t have any idea about the tradition to which this song belonged. It also confirms that the clueless paternalism of the R16 social media ban has its own long, inter-generational tradition.
Just as well the NZBC censors never heard Parton’s story song “Robert,” about an impoverished girl who knows what her would-be lover does not know, that they share the same rich and irresponsible father, who seduced and abandoned her mother…
Parton’s wit and intelligence were always at their most engaging in the moments that seemed casual and spontaneous. Here she is with the guitar maestro Chet Atkins, making offhand brilliance seem dead easy:
It has become a cliche to say that Dolly Parton was the one remaining performer who could bridge America’s divides, in that she was loved across the political aisle by right wingers and leftists alike. The Dolly’s America podcast is an informational gold mine about her central place on the American cultural landscape. It is highly recommended.
Relatively late in life, she made a couple of albums imbued with her love for her bluegrass roots. Here for instance, is the great “Will He Be Waiting For Me’ from The Grass is Blue album. Even her sad songs always sounded so full of life…
Finally, her sense of community seemed to be central to her identity…whether it be the musical traditions to which she never ceased paying homage, the living communities in need to which she channelled millions of philanthropic dollars, or her community of fellow musicians. Here she is with Emmylou Harris and Linda Ronstadt: