The Lie of “Tax is Theft” & "Government Waste"
How the Rich Benefit from Attacking Taxes & Everyone Else Suffers
By Dr Harpreet Singh | drhsinghnz.substack.com | FB: @DrHSinghNZ | BSky: @DrHSinghNZ | IG: @DrHSinghNZ
Author’s note: Anti-tax slogans like “tax is theft” or “government waste” win support because they protect the wealthy from paying more, and they ring true to many workers who feel most taxes are taken through wages and everyday spending, while wealth is often taxed more lightly. This taps into real frustration and distrust, then channels it into policies that too often shift the burden downward instead of fixing unfairness at the top.
The phrase “tax is theft” is one of the most powerful slogans in modern politics. It sounds bold, simple, and morally clear. It turns a complex topic into a single charge: the state takes what you earned. Alongside it sits a close cousin, “government waste,” which suggests taxes are not only forced, but also badly spent.
These ideas do not spread by accident. They spread because they do two things at once. They protect the interests of people who benefit most from lower taxes, and they speak to real frustrations felt by ordinary taxpayers. The result is a message that can unite very different groups under one banner, even when the policy outcomes mostly help those at the top.
This article explains why that happens, how the argument works, and why it keeps winning attention.
The core claim
Anti-tax rhetoric remains loud because it serves wealthy interests and resonates with many working people.
That is the argument in one sentence. It has two parts, and both matter.
It serves wealthy interests because lower taxes on high incomes, investment returns, property, and business profits protect and grow large fortunes.
It feels true to ordinary people because many taxes hit them often and visibly, while the very wealthy can sometimes avoid the same pressure through structures, timing, and political influence.
When these two parts reinforce each other, the message becomes durable. It does not need to be fully accurate in every detail to be politically effective. It only needs to match enough people’s experience, and it often does.
How the message works
The “tax is theft” frame is not just a complaint about tax levels. It is a moral story.
It casts the taxpayer as a victim. You earned it. Someone took it.
It casts the government as the wrongdoer. The state is not a shared tool. It is a taker.
It makes compromise feel like surrender. If something is theft, you do not negotiate the rate. You oppose it.
This framing is powerful because it shifts the debate away from practical questions such as “What should we fund?” and toward moral absolutes such as “Is taxation illegitimate?” Once the debate moves into moral territory, the burden of proof flips. The person defending the tax must now justify the entire idea of collective funding, not just a specific policy.
The “government waste” frame plays a different role. It aims at trust.
If the government is wasteful, then paying taxes feels pointless.
If waste is the main story, then cutting revenue can seem responsible.
If waste is the focus, then fairness questions become secondary.
Together, these frames create a simple pathway: taxation is wrong, and spending is incompetent. Even voters who do not accept the “theft” claim may accept the “waste” claim, and the policy result can be the same.
Why does this message align with the interests of the wealthy?
Wealthy people do not all think the same way, but they share a basic reality. They have more to gain, in absolute dollars, from tax cuts. A small change at the top can be worth more than a large change at the bottom.
Also, high-wealth households and large firms are usually better placed to do things that reduce tax in ways most workers cannot, such as:
shifting income across years
choosing whether money shows up as wages, business income, or investment gains
using legal structures to manage exposure
paying for expert advice that finds loopholes and optimises outcomes
This matters because it creates a gap between headline rates and real-world outcomes. Even when the official system looks progressive, the lived reality can feel different if people believe the top can escape what everyone else must pay.
Wealth also brings political capacity. People with money can fund campaigns, support advocacy groups, sponsor think tanks, and keep a message alive over many years. They can push a steady drumbeat that makes lower taxes feel like common sense.
You do not need a conspiracy for this to happen. You only need aligned incentives and repeated messaging.
Why can ordinary people find it convincing?
Anti-tax rhetoric is not persuasive only because it is broadcast. It is persuasive because many people feel the tax bite directly.
Most workers experience tax as:
automatic deductions from wages that arrive before they even see their pay
consumption taxes that show up in everyday prices
fees and charges that feel like taxes but do not carry the same public benefit story
These taxes are frequent, visible, and hard to avoid. For many households, they are also emotionally salient. You notice them when money is tight.
Now add a second experience. Many people see public systems under strain. They face long waits, crowded services, or infrastructure that feels overdue. That does not prove taxes are wasted, but it creates a feeling: “I pay a lot, and I do not see the return.”
In that emotional setting, anti-tax messages land easily. They offer a clean explanation: “You are not getting value because the government is wasteful.” Even if the real causes are more complex, the story feels personal and direct.
The fairness problem that fuels the narrative
A key reason the “tax is theft” message can win support is that many tax systems feel uneven.
People often accept taxes more readily when they believe three things:
Everyone pays their share.
The rich cannot opt out.
The money leads to real public benefit.
When any of these beliefs weaken, resentment rises.
The system can feel unfair when:
wages are taxed consistently, while wealth grows through assets that are taxed differently or later
Loopholes allow high earners to reduce their effective rate
Enforcement feels tougher on small mistakes by ordinary people than on complex arrangements by powerful actors
Tax increases appear to fall on broad bases, like consumption, rather than on concentrated wealth
Even when the factual picture is mixed, the perception can be strong. Politics runs on perception as well as statistics.
This is where the interests of the wealthy and the anger of ordinary taxpayers meet. The wealthy may want lower taxes for themselves. Many voters may want a fairer deal and better value. Anti-tax rhetoric can merge these desires by giving both groups the same target: taxation itself.
The strategic outcome
The most important effect of this messaging is not that it makes people hate taxes. It is that it narrows the range of acceptable policy.
Once taxes are framed as immoral or pointless, it becomes harder to argue for:
stronger enforcement against avoidance
higher taxes on top incomes
taxes on wealth and large asset gains
investment in long-term public goods
Instead, politics gravitates toward:
tax cuts as an easy win
spending cuts framed as discipline
shifting revenue onto less visible or more broad-based taxes
underfunding services and then calling them failures
This can create a cycle. Services struggle. Trust falls. Tax resistance grows. The slogan looks proven because people see dysfunction, even when the dysfunction is partly caused by reduced revenue or unstable funding.
Impact on Public Services
When anti-tax politics drives lower revenue and tighter budgets, public services often take the hit first and hardest. Agencies are pushed to do more with less, which can mean staff shortages, longer wait times, reduced opening hours, and fewer frontline services, especially in health, education, housing, and community support. Prevention and early help are often cut back because they are easier to delay, so problems build up and become crises, which cost more later and harm more people. Maintenance and infrastructure get deferred, quality slips, and governments may fill gaps with higher fees and user charges, shifting costs onto households. Over time, this can erode trust and create a damaging cycle where weakened services are then blamed as “proof” that government does not work.
Conclusion
Anti-tax rhetoric thrives because it is a bridge between two worlds. It serves the interests of those who gain most from lower taxation, and it validates the frustration of those who feel squeezed and unseen. It reduces a complex social bargain into a moral accusation. That makes it persuasive, repeatable, and hard to dislodge.
The most effective response is not to deny that people feel burdened. It is to address the fairness and value questions directly. Who pays. Who can avoid? What the money achieves. If those questions are not answered, slogans will keep filling the gap.
Anti-tax slogans like “tax is theft” or “government waste” win support because they protect the wealthy from paying more, and they ring true to workers who feel taxes are taken through wages and spending, while wealth is often taxed more lightly. This taps into frustration and distrust, then channels it into policies that often shift the burden downward instead of fixing unfairness at the top.
Hi Harpreet, I appreciate your posts and your attempts to educate people especially in relationship to Treaty principles. Keep up the good work.
To really talk about tax and what it is, you need to understand the underlying accounting and what is actually happening. Steve Keen, Richard Murphy, and Modern Monetary Theory clearly explain this. Steve Keen's models show why many current stories about the economy are simply false and leading toward a collapse of capitalism.
The key points in relationship to tax is that the government does not tax to spend. It is the opposite way around. The central bank, in New Zealand's case the Reserve Bank, creates every cent of the money that the government spends. It then taxes to remove excess money from the system. Tax gives the currency legitimacy and encourages or forces people to use it if for no other reason than to pay tax.
It does get confusing when Murphy and others of the MMT school talk about having to tax to redistribute wealth and pay for public projects. The reality is that what really inhibits government spending is available resources and not money.
How does this relate to what you are saying? I would agree with the argument that "Tax is Theft" and "Government Waste" are lies. The use of these terms are certainly aimed to have the government reduce tax primarily for the wealthy. What differs is how you build an argument and that means exploring the validity of other classical economics arguments such as the supply and demand curve. When you start exploring these and try and model their impact, you quickly discover that most classical economic arguments do not stack up.
Take the idea that banks are intermediaries between borrowers and lenders. When you try to model banking operations based on this principle, you quickly discover that it simply does not work. If you model based on the banks creating money when they issue a loan (papers from the Bank of England and the German equivalent say this is what actually happens) then you get something that actually reflects reality.
Many arguments around economics and tax are simply not based on reality. They are based on stories that have been passed from one generation to the next.
Steve Keen was one of the few economists to predict the 2008/2009 financial crisis. The reason was that his models clearly showed the instability of the capitalist economic system which Minsky had argued from his analysis of economic processes.
We should be arguing for a tax system where no one pays tax until they are earning more than the living wage. It should be progressive from there with a 100% rate on earnings over some multiple of the living wage. I have argued for 10 times reducing to 5 times over time.
However, all of this ignores living on a planet with limited natural resources where we seem content to extract more at an exponential rate. Unless we move to systems that recycle / reuse, we will reach a point where society as we know it will collapse simply because we have reached the limits of the natural / nonrenewable resources.
Tax wealth more. Tax work less