Glossary

Reduction in the amount of tax owed, or, a reduction in a tax-free entitlement or benefit. The reduction is based on total income.

Example
The UK tax system includes a tax free allowance. No tax is paid on the first £12,570 received. This allowance is abated for ultra-high-earners. After £100,000, every £2 of extra income reduces the allowance by £1. For example, someone earning £110,000 would have their tax-free allowance reduced to £7,570.

This reduction is the abatement of the tax-free allowance.

A tax-fairness principle: Those with more resources can contribute more—without breaking the bank.
Visual idea: Two people - one large, one small -carrying different sized loads.

A government payment that helps people cover housing costs, because rent is out here behaving like a villain.
It’s extra support for people paying for accommodation in the private market, whether you rent or own.
Stable housing = better health, better learning, less stress.
Example:
If your income is low and your rent is high, the Accommodation Supplement helps.

Visual idea: A little umbrella over a house labelled “rent support.”

The merging of two or more companies into a new entity, combining their assets (what they own) and liabilities (what they owe).

Amalgamations can reduce competition in an industry a lot, especially in a small country like Aotearoa.

Example:
If two banks merge, you might get fewer competitors… and a worse deal for banking customers.

Visual idea: Two company logos melting into one monster blob.

New Zealand.

The price a buyer and seller would agree together—if they were not secretly connected via an ‘inside deal’.
Example:
A large multinational company might sell something to its own offshore branch cheaply to avoid tax. A rule enforcing arms-length pricing can stop this.
Visual idea: Two people shaking hands across a table labelled “fair deal.”

Long-lasting things that people (or organisations) own, which they can use to make money.

Many assets are shares of large companies.

Another big one is property portfolios - it’s common for large asset owners to have many houses, as well as offices, malls, and factories.

Example:
Property makes up 48.5% of all the assets in Aotearoa.

Half of assets in Aotearoa are owned by the top 10% wealthiest people.

Figuring out what an asset is worth today.
Example:
Houses are re-valued regularly to find out what they might sell for if they were sold today.
Visual idea: House with a price tag being inspected.

People or entities connected through family, business, or trusts — basically, the tax system knows you’re not strangers.
This matters because associated persons sometimes shift money between themselves to dodge tax.
Example:
If you “sell” your rental property—and the income you earn from it—to your wife for suspiciously cheap, IRD is going to notice.
Visual idea: A spiderweb of stick figures labelled “connected parties.”

Cutting public spending, or not increasing it to match rising costs —often worsening public services, inequality, and hardship.

Example:
Enforcing austerity measures can lead to people losing their jobs due to less spending in the economy.

Austerity can also lead to the loss of important public services, such as by firing people who investigate and prevent online child exploitation.

A rule set by the OECD Tax Transparency Standards.
This rule forces banks etc to report financial information to IRD, for people living in Aotearoa who pay tax in other countries.
IRD automatically shares this financial information with the relevant foreign government.
This rule helps to prevent international tax evasion.

The proportion of someone’s total income that they pay in tax overall.
It’s the “tax paid on average,” not the marginal tax paid on the last dollar earned.
Example
If someone earns $50,000 and pays $10,000 in income tax, their average tax rate is 20%
Average tax rates are often lower than a person’s top marginal tax rate, because some income is taxed at lower rates.
Example
If you earn $65,000 per year, your top marginal tax rate is 30%, but your average tax rate is only 18%
Visual idea: A pie chart showing “income earned” vs “tax paid overall.”

When the government uses public money to save a failing corporation, often from the corporation's own mistakes.
Example:
In 2002 the government spent nearly $1 billion bailing out Air New Zealand.
Visual idea: Taxpayer bucket pouring into a sinking ship.

Shifting of profits offshore by multinational companies to avoid paying tax.
This happens even when the real business activity—workers, customers, sales—is happening here in Aotearoa.
BEPS reduces tax revenue that the government can use to fund running our country. It also makes the tax system unfair—ordinary people can’t shift their wages to offshore tax havens.
Example
The NZ branch of a company might buy components from a foreign branch of the same company at a high price. This allows them to report low profits in Aotearoa and pay less tax here.
Visual idea: A big corporate money bag sliding offshore on a little boat.

Trust income allocated to a trust beneficiary and taxed as the beneficiary’s income.
Trusts can allocate income strategically (and sometimes sneakily).
Example:
A wealthy family trust might allocate income to a beneficiary on a lower tax rate. Very “creative accounting.”
Visual idea: A treasure chest labelled “trust” pouring coins into smaller buckets.

Government payments to support people needing help. They should make it possible to afford basics like housing, food, and health care.
In Aotearoa, benefits include New Zealand Superannuation, for retirees, and Supported Living Payment, for people with permanent disabilities.
A fair tax system helps fund strong social support so families don’t struggle alone.
Visual idea: A safety net catching people above icons for housing + food + health.

Extra for experts technical term
Spending on a development that fails or is abandoned, leaving the business unable to claim tax relief.
Visual idea: A black hole swallowing a receipt.

When inflation quietly pushes you into a higher tax bracket… even though you’re not actually better off!
Also called fiscal drag.
Example:
You got a raise, but the price of groceries went up as well, so you’re no better off but still pay more tax.
Bracket creep gets used by governments to give everyone ‘tax cuts’---but actually they’re just moving the brackets back to where they started.
Visual idea: A staircase labelled “tax brackets” with someone being pushed upward by a giant balloon labelled “inflation.”

If you buy and sell a residential property within two years, the profit is taxed.
This is to discourage houses being traded like poker chips, sending costs soaring as investors gamble on prices continuing to climb.
Example:
If you flip houses for profit, the bright-line test says: “Pay tax like everyone else”.
Unfortunately, two years isn’t long to wait. And once the deadline passes, speculators profit from house sales totally tax-free. See also: Property Speculation.
Meanwhile, the rest of us spent those two years working for taxed wages….

The idea that taxes should apply widely without loopholes, so tax rates stay lower, and the system stays simple.
Example:
Preventing the wealthy from using loopholes allows us to collect more tax from them and less from wage earners.
But, just because it’s simple, doesn’t make it always fair.
Example:
GST applies to all spending in the economy—from vegetables to superyachts.
Visual idea: A wide net catching income streams.

Money available to purchase assets that can be used to generate more wealth.
or
Assets that can be used to generate more wealth.
Capital in this sense may include property, machinery, or other assets that produce things that can be sold for income.
Income from capital is taxed differently to wages. This is one reason why the richest kiwis can pay less tax for each dollar they get.
Visual idea: A seed growing into a tree labelled “investment → income.”

Movement of money or wealth out of a country to avoid tax or regulation.
Strong rules, international cooperation, and the need for assets to remain in the country to earn money, can all limit capital flight.
Example:
A wealthy investor might want to move assets to an overseas tax-haven, but instead choose to keep them in Aotearoa where they’re earning money.
Visual idea: Money with wings flying away from NZ.

The profit made when an asset increases in value and is sold.
Capital gains often come from the sale of property, shares, or businesses.
In Aotearoa, most capital gains are untaxed. Investment in housing particularly benefits from this untaxed status.
Example
If someone buys a house for $600,000 and sells it later for $900,000, the $300,000 increase is a capital gain.
Visual idea: A house with a price tag rising over time.

Money you gain from owning assets, not work. Includes dividends, rent, interest, capital gains.
Taxing capital income is important for a fair tax system.
Example:
A nurse earns taxed wages. A landlord receives rent and untaxed capital gains. Guess who pays the higher effective tax rate?
Visual idea: Two streams: “work income” taxed heavily vs “wealth income” lightly taxed.

A tax paid by a polluter for the use of carbon-based fuels. Without such a tax, we all cover the cost in the form of climate change, worse health outcomes, and a degraded environment.
Example:
Carbon taxes can encourage greener choices.
Visual idea: A smokestack with a price tag on the pollution cloud.

People who own valuable assets but have too little income to meet their needs. There are many ways to design tax systems to ensure these people are treated fairly.
Example:
A retiree with a large house and no income may be able to defer their tax obligations.
Visual idea: Person sitting on a gold house, holding an empty wallet.

A company owned by one person or a small group of shareholders. It is often run by a family or their close associates.
Example:
Your local café is closely held. So is a billionaire’s private investment company. Same structure, wildly different vibes.
Visual idea: A small circle of people holding a company icon.

NZ’s competition watchdog, which enforces laws relating to competition and trading practices, and regulates monopolies.
Visual idea: Referee whistle for markets.

Small units of ownership in a company.
A share owner receives money either through dividends (a share of company profits) or through selling the shares for more than they originally cost (capital gains).
Shares are among the most common assets held by wealthy households. See imputations for how shareholders can avoid tax.

Rivalry between businesses that helps keep prices fair and prevent monopolies.
Lack of competition can lead to higher prices and bigger corporate profits.
Visual idea: Two shops side by side vs one giant dominating.

An overseas company controlled by NZ shareholders, sometimes used to hide income offshore.
NZ has rules that stop people parking profits overseas to avoid tax.
Example:
If someone sets up a company in the Cayman Islands but runs it from Remuera, IRD is not fooled.
Visual idea: A suitcase labelled “profits” trying to sneak onto a plane.

The ‘cost’ to a company to acquire investment is the same number as the return private investors expect before they’ll invest money.
The cost of capital can also refer to the cost of purchasing assets for the company.
If private investors are unwilling to invest in something that has wide public benefits (i.e. the cost of capital is too high) government investment can fill the gap.
Example:
If building renewable energy generation doesn’t have a return of at least the cost of capital, then private investors won’t invest in it.
Visual idea: A seesaw balancing “risk” and “return.”

A rule requiring multinationals to show how much profit they make, and tax they pay, in each country.
Standard Country-by-Country Reporting rules in the OECD mean that only tax authorities can see this information.
Visual idea: Map with profit labels pinned on.

Essential systems like electricity, transport, water—things society literally can’t function without.
Visual idea: Power lines + roads + pipes bundle.

The running balance of money lent between a shareholder and their company. Sometimes used legitimately, sometimes creatively.
Example:
A shareholder may borrow money from their company instead of taking taxable dividends… hello loophole.
Visual idea: A ledger book with arrows going back and forth.

The gap between the best outcome for everyone, and what the market actually does.
Example:
Monopolies create deadweight loss when they push up prices so that some people can’t afford their products. A tax system which enables monopolies, such as by not taxing large corporations enough, can increase the deadweight loss.

An expense that a taxpayer may legally subtract from their income before tax is calculated.
Example:
Businesses deduct research and design investment expenses before reporting profits.
Visual idea: A receipt being subtracted from a total.

Delaying tax payment until later, such as when an asset is sold or the owner dies. Often used to support those who are asset-rich / cash-poor.
Visual idea: “Pay later” button.

A ‘don’t worry about tiny amounts’ threshold.
Below a certain level, some tax rules don’t apply.
Example:
You don’t have to pay GST on goods you buy online from overseas if they cost less than a de minimis amount.
Visual idea: A line labelled “too small to bother.”

An order that allows IRD to stop someone leaving the country if they owe significant tax.
Example:
If you try to flee NZ with millions in unpaid tax, IRD can say: “Not so fast.”
Visual idea: A passport with a big red “STOP” stamp.

The gradual loss in the value of an asset over time.
The lost asset value can be deducted from your income, reducing the tax you must pay.
Example:
Loss of value of a work vehicle can be claimed for tax purposes.
Visual idea: A downward slope line over an asset icon.

The part of the economy that runs on digital services and data. Think social media, online advertising, apps.
Example:
Facebook makes money off NZ users… but pays barely any tax here. Digital economy, meet digital loopholes.
Visual idea: A globe made of wifi signals.

A proposed tax on big tech companies making money in Aotearoa without paying much tax here. It would tax their sales, rather than their profits, to get around the ways the companies hide their profits. Aotearoa does not currently have this tax.
Example:
Amazon makes a lot of money from Kiwis but pays barely any tax.
Visual idea: A smartphone with a tax stamp.

When one group is unfairly held back compared to others.
In tax, local businesses can be disadvantaged compared to multinationals, an issue that can be addressed with international cooperation.
Visual idea: A race where one runner starts far behind.

Part of a company’s profit paid to a shareholder.
Example:
Fonterra makes $2 million in profits and distributes this to its shareholders in the form of dividends.

Converting taxable dividends into untaxed capital gains to avoid tax.
Example:
Accountants doing backflips so shareholders pay less tax than workers. Classic.
Visual idea: A dividend cheque going through a disguise machine.

An organisation that gets the tax credit ‘face-lift’.
Donors may claim tax credits because the government recognises the value of the organisation’s charitable work.
Can be exploited by bad-faith ‘charities’.
Example:
Donations to environmental restoration groups or foodbanks can come with a refund at tax time.
Visual idea: A heart-shaped receipt with “25% back” stamped on it.

Agreements (also called tax treaties) between countries to stop tax evasion, and to stop the same income being taxed twice. Most modern tax treaties have rules to prevent taxpayers abusing the terms of the treaty to gain a tax advantage.

Maybe there’s smarter things to aim for than just vague ‘growth’?
Kate Raworth’s Doughnut Economics model is made up of two thresholds. The outer edge of the donut represents ecological limits to the economy. The inner edge represents the poverty line. Doughnut economics is the idea that we should ‘fill in the doughnut’ by focusing on the parts of the economy that create positive social value, lifting everyone out of poverty, and ending activities that harm the environment.
Think: Not just jobs, jobs with purpose. Not just food, food for thought.
Tax plays an important role in this framework— it can discourage harmful activities, and help lift more people above the poverty line without relying on harmful growth.
https://doughnuteconomics.org/about-doughnut-economics

Two major players that dominate a market. Often these two players will use their market power to control suppliers and kill competition. They may also check on each other’s pricing, and then charge people more.
Example:
In Aotearoa, Woolworths owns SuperValue and FreshChoice, while Foodstuffs owns New World, Pak n’ Save and Four Square. That’s a duopoly.

Extra for experts technical term.
EBITDA is an acronym for ‘Earnings Before Interest, Taxes, Depreciation and Amortisation’. By stripping away these four charges, EBITDA gives an idea of a company’s core profitability.
Companies can use EBITDA to make profits look bigger (or smaller) depending on what story they want to tell. Think of it as the corporate version of “don’t look at my bank balance, look at my potential.”

The limits on our ability to use up natural resources / pollute / heat the atmosphere before our activities become unsustainable and lead to global collapse.

How living things relate to one another and their environment.

Things that encourage people and businesses to behave in certain ways. Taxes and tax loopholes create incentives that are sometimes good and sometimes… less helpful.
A better tax system can incentivise us to build a fairer economy.
Example
Light taxation of property speculation incentivises people to buy more houses instead of investing in productive businesses or green innovation.

Extra profits above what would exist in a truly competitive market.
Economic rents may result from monopolies or scarcity of resources. Taxing economic rents can help to fund public goods and reduce private excess.
Example:
Aotearoa’s supermarket duopoly makes huge economic rents.
Visual idea: A money pile labelled “extra, unnecessary profit.”

A system for organising resources and work to fulfil human wants and needs.
A well-functioning economy ensures resources end up where they improve human wellbeing the most, both now and into the future. Tax, regulation, and government spending, play important roles in making economies function well.

We don’t like this term. The planet is more than what it does for humans. But, for when you see it used, ecosystem services refers to:

Vital services provided to humanity, without payment, by the planet - ‘Nature’s unpaid labour’.

Example:

Forests clean air. Wetlands prevent floods. Bees pollinate food.

If we destroy wetlands for development, we lose natural flood protection… and then we pay millions for stopbanks.

Visual idea:

A “receipt” from nature:

• Clean water: free
• Pollination: free
• Climate stability: priceless

The tax a person or a company pays as a percentage of their total income. Tax exemptions and loopholes may allow companies to reduce their effective tax rates.
Worth paying attention to, as this is the rate people and companies actually pay, once all tax rules have been applied.

The total effect of all taxes and abatements on the next dollar earned.
Working for Families abatements, combined with personal taxation, can create large effective marginal tax rates for poor families.
Example
If you are on the Job Seeker Benefit and earn more than $160 per week, the next dollar you earn will reduce your benefit by 70 cents. You will also pay tax on the dollar at 10.5%. This makes your effective marginal tax rate 80.5 cents.

How much demand or supply changes when prices change.
Example:
Demand for food has low elasticity, meaning that people can’t easily buy less of it when prices rise. That’s why GST hits hard.
Visual idea: A rubber band stretching labelled “price response.”

A tax that a multinational tech company must pay in a country where it generates income, even if it doesn’t have a physical office here. Some companies make many millions of dollars in Aotearoa but pay very little tax here.
Example:
A bill to set up a Digital Services Tax (a kind of equalisation tax) was introduced in Aotearoa in 2023, but was canned in 2025. So Big Tech still earns millions, but pays peanuts.
Visual idea: A scale balancing “local business” and “Big Tech.”

A situation in which everyone receives the same resources or opportunities, no matter what their circumstances are.
Example
Giving every school the same funding is ‘equal’ in one sense — but it ignores that some schools have far greater needs.

A situation in which everyone receives the resources and support they need, depending on their individual circumstances.
It can also refer to the value of a company after taking off what it owes.
Example
People with more ability to pay should contribute more tax, while those with less ability to pay contribute less. This helps everyone to access decent health care, education and other opportunities.
Equality visual: everyone gets the same box.
Equity visual: people get different supports so everyone can see over the fence.

Things people need to live, rather than luxury extras.
Example:
Food, power, water.
Visual idea: Bread + power + medicine icons.

A tax on specific goods — often ones that cause harm or are luxuries.
Example:
Excise taxes on tobacco help to discourage their use, and may help cover the cost of the harms caused by smoking.
Visual idea: A product with a tax sticker.

A tax levied on a person leaving the country, to to discourage tax avoidance by moving wealth offshore.
Visual idea: Airport departure gate with a tax sign.

Goods and services that we sell overseas/ to overseas buyers.

Side effects of an economic activity that affect other people and / or the environment, either positively or (more often) negatively. Unregulated markets often ignore externalities.
Example
A company that causes pollution (a negative externality) makes a profit, while the rest of us pay the environmental cost.
Tax can help make sure those costs don’t get dumped on the public for free.

A form of wealth tax used in Aotearoa to tax foreign shares, assuming they earn a set return (5%).
Example:
Instead of tracking every gain, IRD says: “Let’s just treat it as 5% income.”
Visual idea: A simple “assumed return” stamp on shares.

A fair tax system is one that is just and works for everyone, not only people with accountants, trusts, and five rental properties.

A fair tax system means that:

• ordinary workers aren’t overburdened
• wealth and capital are taxed properly
• big corporations pay their share
• public services are funded adequately

When more of the money in the economy is based on buying and selling things like shares or houses, to make a profit rather than use them, in a way that has little to do with actually making life better for most of us.
Investment goes into chasing capital gains, rather than new innovation.

Official documents showing what an organisation earns, owns, and owes.
Visual idea: Spreadsheet with cartoon eyes.

A small tax on buying and selling financial assets or on financial transactions such as transferring money from one bank to another. Aotearoa does not have such a tax.
Example:
A tiny levy on currency trading could raise significant revenue from the large sums traded.
Visual idea: A stock trade with a small coin shaved off.

The financial year runs from the 1st of April until the 31st of March, across two calendar years. Taxes are calculated over a financial year, rather than a calendar year, and this concept is used for a lot of economic statistics.

A fancy word for ‘government money stuff’.

Fiscal policy includes how the government:

• raises revenue (tax)
• spends money (healthcare, schools, infrastructure)
• manages debt

If someone says “fiscal responsibility,” they usually mean “let’s talk about budgets” — sometimes sincerely, sometimes ominously.

‘Fiscal responsibility’ is not a get-out-of-jail free card to act without empathy—it is often economically sensible to continue funding social services, or to use debt to enable us to build the hospitals and schools that we need.

Visual idea: A government budget spreadsheet turning into hospitals and schools.

See: Bracket Creep

A quantity measured over a period of time, rather than at a fixed point.
Example:
The income you earn in a year is a flow variable. Your savings account balance on a given day is a stock variable.
For governments, GDP is their income, but they also have ‘savings’ in the form of assets. In June 2025, the NZ government’s net worth was $465 billion.
See also: Stock

Overseas investment that involves real control, not just passive shares or debt.
Example:
A foreign company owning a subsidiary in Aotearoa.
Visual idea: A flag planting into a business icon.

Tax on the value of non-cash ‘perks’ given by employers to employees..
Example:
If executives get to use a fancy company car untaxed, FBT says: “Nice try”.
Visual idea: A gift box with a tax tag.

The tax system’s ultimate “don’t be cute” rule.
GAAR allows IRD to address arrangements that follow the technical wording of the law, but violate its underlying intent or spirit.
Example:
Accountants inventing a loophole? GAAR: “Absolutely not.”
Visual idea: A referee blowing a whistle.

Money or assets given without payment.
Gifts can be genuine kindness… or a sneaky way to transfer wealth without paying tax.
Many countries tax extra large monetary gifts that exceed a threshold.

Work based on short-term contracts instead of stable jobs. Gig workers have less security, no guaranteed income, and limited rights.
Tax and welfare systems need to support precarious workers in the gig economy.
Example:
Uber drivers have no sick days, no annual leave, and few protections.
Visual idea: A patchwork quilt of jobs.

An internationally agreed tax rate (led by the OECD) of 15% for the largest multinational companies. It aims to stop the "’race to the bottom’ in which countries compete for foreign investment by slashing corporate tax rates.
Visual idea: Floor line under corporate tax rates.

Regions of the world, such as much of Asia and Africa, where incomes are low. Many of these countries share histories of being colonised or exploited.
The Global South does not include Australia, or Aotearoa, due to our high incomes.

A tax of 15% added to most things you buy.
Example
A billionaire and a minimum-wage worker both pay GST on bread. One of them definitely notices it more.

A promise from the government to repay investors, with interest, who lend them money.
Bonds are often used to fund big long-term projects — like infrastructure, hospitals, or climate-resilient upgrades.
They are useful for investing in the future, but also give tax-payer money to private investors. These investors often could have just been taxed up front.

The big headline number: how much stuff the economy produces in a year.

The GDP of a country is a measure of the total value of goods and services that are produced within that country during a specified time period, such as a year.

It does not include:

• Whether or not people are thriving
• The value of voluntary work
• The care of children, people with disabilities, and the elderly
• Harms to the environment

GDP also gives no idea of the distribution of income and wealth.

Example:
A country can have rising GDP while kids go hungry and rivers get polluted. GDP goes up… wellbeing goes down.

Visual idea: A bar chart labelled GDP beside a wellbeing meter showing they’re not the same thing.

The idea that people with similar incomes/assets should pay the same tax.
Example:
If one person makes money from buying and selling shares, and the other person makes the same amount from teaching, they should both pay the same tax.
Visual idea: Two people on a level balance, coins falling evenly from both sides.

People’s skills, knowledge, and good health that give them the ability to participate fully in society.
Example:
Investing in education and healthcare builds human capital—and a flourishing economy.
Visual idea: A brain + heart + book icon cluster.

When a tax is ring-fenced for a specific purpose.
Instead of going into the general pot, the money is dedicated to something particular.
Example
A climate levy that directly funds public transport or clean energy projects would be hypothecated.
It’s basically: “this tax pays for that thing.”

The International Monetary Fund.
A global organisation that lends money to countries and gives economic advice.
The IMF has often pushed austerity and required austerity policies for the countries it lends to—but lately even they’ve started admitting that inequality is bad for economies. Character development!
Visual idea: IMF logo

A system that stops company profits being taxed twice. It does not apply to foreign investors.
Companies pay tax on profits, and local shareholders get credits for that tax when they receive dividends. They can claim that credit when they pay personal tax on their dividends.
Imputation is meant to be fair, but it created a big increase in income inequality when it was introduced in 1988, because it mainly benefits the rich.
Visual idea: A stamp saying “tax already paid” on a dividend cheque.

The benefit you get from doing something for yourself instead of paying someone else.
Example:
Owning your home provides “imputed rent” — shelter you don’t pay a landlord for. Getting fruit and veges from your own garden, cooking your own meals and looking after your kids all also create “imputed income”.
Visual idea: A house generating invisible income waves.

Who actually bears the cost of a tax. Sometimes it’s not who writes the cheque.
Example:
GST is paid by the shop you buy stuff from, but because they pass the cost straight on to you, you bear the incidence of GST.
Visual idea: A tax weight shifting between groups.

Growth that actually reaches all communities, not just millionaires and property moguls.

Money you receive.
Income can come from:
* wages and salaries
* business profits
* rent
* dividends
* selling assets
Anything that makes you more wealthy at the end of the year than at the beginning is thought of as income. For example, if you own a house that goes up in value during the year (makes a capital gain) that is income, even if you don’t actually get it in your hand until you sell the house.
Income that is yours but isn’t available until you sell up is ‘economic income’ and is untaxed. When you sell up, the income is ‘realised’.
A big issue in Aotearoa is that income from wealth is often taxed differently (and more lightly) than income from work.

A way of dividing households into ten groups from lowest to highest income.
Decile 1 = lowest incomes, Decile 10 = highest.
Example:
Policy impacts often look very different across deciles.
Visual idea: Ten stacked blocks from small to tall.

Adjusting tax thresholds with inflation so average tax rates don’t creep up over time.
Example:
Without indexation, bracket creep slowly taxes workers harder.
Visual idea: A tax bracket ladder rising alongside inflation.

When income, resources, wealth, or opportunities are unevenly distributed.
High inequality harms wellbeing, trust, and social cohesion.
Visual idea: Two ladders: one tall, one broken.

When prices rise over time.
Inflation means your money buys less than it used to.
Example
If groceries cost $200 a week instead of $150, that’s inflation, and it hits low-income households hardest.
Visual idea: A grocery basket with prices floating upward like balloons.

The systems that make society function: roads, pipes, schools, hospitals, transport.
Corporations benefit from infrastructure, so fair taxation means they help maintain it.
Visual idea: A city grid of roads + hospitals + schools.

Wealth received when someone dies. Inheritance can include property, money, shares, or trusts.
Inheritance is one of the main ways wealth inequality is passed down through generations.

See also: Wealth Transfer Tax
A tax on large inheritances.
Many countries use inheritance taxes to reduce inequality and fund public services.
Aotearoa doesn’t currently have one, meaning massive fortunes can be received tax-free.
Example
If someone inherits $10 million, that’s not “hard work paying off.” That’s the tax system making choices.
Visual idea: A relay baton labelled “wealth” being passed down generations.

Businesses can claim back the GST they paid on business purchases.
Example:
A café buys coffee beans wholesale and claims back the GST.
Visual idea: A GST receipt with an arrow returning money.

Things like software, trademarks, patents — valuable assets made of ideas you can’t physically hold, but can make billions from.
Visual idea: Lightbulb with a padlock.

Letting businesses subtract mortgage interest from taxable income.
It is controversial for landlords, especially given that they don’t pay tax on significant parts of their income (capital gains).
Visual idea: Landlord getting a discount coupon labelled “tax break.”

Ensuring each generation has a fair chance at life, no matter who their parents are.

An annual charge on wealth held in trusts to put a brake on the development of perpetual untaxed wealth dynasties.
Visual idea: Generational staircase with a small toll gate.

Countries working together so corporations can’t just hop jurisdictions to avoid tax.
Visual idea: Hands holding a globe.

Putting money into an asset, business, or project, with the aim of getting a return (income) in the future.

A property owned mainly to generate rent or capital gains, rather than as a home.
Visual idea: Multiple houses stacked like assets.

Someone who owns capital that they can put into owning assets or shares with the goal of making income.
It’s a common myth that investors create jobs—in reality investors rely on consumers having enough money to buy new products, otherwise jobs quickly turn into job losses. That’s one reason wealth concentration is so bad for the economy.

A government payment made to low-income families who earn their income through work.
Controversial, because families who can’t work, such as those with health conditions, can’t get the payment.

Inland Revenue. NZ’s tax department.
IRD collects tax, administers social policy payments, and basically keeps the system running.
They’re the referees of the tax system… though some players have been getting away with a lot.
Visual idea: A referee whistle with a tax logo.

The idea that society should be fair, not just on paper, but in real life—in people’s actual wellbeing, opportunities, dignity, and outcomes.
Justice is what happens when the rules of the game aren’t rigged for the wealthy, and when the benefits of our collective resources — schools, healthcare, housing, clean environments — are shared in a way that supports everyone’s flourishing.

In tax terms? Justice means:

• Those with the broadest shoulders carry more of the load
• Wealth and power don’t get to hide in loopholes
• The system funds what matters: whānau wellbeing, public services, climate resilience, and a future that isn’t just for the rich

Example:
A justice-based tax system doesn’t let billionaires pay 9% while workers pay 20%. Justice says that if you’ve benefited the most from society, you contribute the most back into it.

Stewardship and guardianship, often of the environment.
Example:
A tax system that supports kaitiakitanga funds clean rivers, biodiversity, and climate resilience.
Visual idea: Hands holding a forest.

A guiding purpose or collective vision.
Kaupapa is about the ‘why’ — the values and direction behind what we do.
Example:
The kaupapa of Better Taxes for a Better Future is about fairness, wellbeing, and building an economy where everyone can thrive.
Visual idea: A compass pointing toward “fairness + flourishing.”

Kotahitanga reminds us that we solve big challenges together— inequality, climate resilience, public services.
Better taxes are about acting collectively, not leaving people behind.
Visual idea: Many strands woven into one rope.

Income from work—wages and salaries, plus some of the income of the self-employed.
Example:
Labour income is taxed on every dollar, while wealth often slips through gaps.
Visual idea: A payslip vs an untaxed asset pile.

Buying land just to sit on it and wait for prices to rise. Fuels housing shortages and property speculation.
Visual idea: A person sleeping on a plot of land with a money clock.

A tax on the undeveloped value of land.
Better Taxes policy considers that a land tax targets just one form of wealth, and so a general wealth tax would be more fair.
Example:
Land taxes discourage speculation and encourage productive use.
Visual idea: A map plot with a tax tag.

A tax or charge raised for a specific purpose.
Levies are often used for things like:* ACC
* environmental clean-ups
* industry-specific funding
* Fuel taxes and RUCs
Basically: “everyone chips in for this particular thing.” It’s a type of hypothecation.

A debt you owe of money, services, or goods.
Example:
Under the Paris Agreement, Aotearoa has committed to buy carbon credits for the portion of our emissions that we can’t reduce by the deadline. The cost of those credits makes every carbon ounce we emit a liability.

Payments made to use something legally—like a resource, brand, or service.
Sometimes corporations use “license fees” to move profits offshore by paying fees to a related company in a tax haven. Very sketchy.

See also: Wealth transfer tax
A tax on wealth transferred over someone’s lifetime—through gifts or inheritance.
The idea is to stop people avoiding inheritance tax by giving everything away early.

How easily an asset can be turned into cash.
Cash is very liquid. A house is not (unless you’re casually selling one of your six rentals).
Liquidity matters when designing wealth taxes—because not all wealth is sitting in a bank account.
Visual idea: Cash flowing like water vs a house stuck like a rock.

A framework for developing government economic policy that considers the holistic impacts a policy can have for Aotearoa.
Created by Aotearoa’s Treasury, the LSF is based on things that add to or take away from our wellbeing, the institutions and governance of our society, and four ‘capitals’: human, social, natural, and financial/physical.
Example:
A tax system should grow wellbeing across generations, not just GDP.
Diagram of The Treasury’s Living Standard’s Framework:

A small company where the owners are taxed on the company’s income as though it flows straight through to them.
Large companies have a few more steps involved in determining who gets taxed on the profit made.
Example:
A family-run business earns $100k profit — that money goes straight to the owners’ tax returns. Transparent, but not a loophole paradise.
Visual idea: A company icon dissolving into individual tax slips.

Rules or gaps in the tax system that allow people or corporations to reduce the tax they pay, often in ways that weren’t intended.
Why it matters: Loopholes undermine fairness and the funding we need for our public services.
Visual idea: A tax net with holes letting money slip through.

Rules that stop companies from carrying forward losses if too many of the people who own the company change.
Example:
Buy a failing company just to slash your tax bill? NZ says: “Nice try, not happening.”
Visual idea: A tax roadblock stopping a “loss train.”

Certain losses can only offset the same type of income.
Example:
Rental property losses can only reduce rental income, not your salary. Keeps tax fair.
Visual idea: A fenced area labelled “rental losses.”

Small assets under $500 can be written off (removed from your taxable income) immediately, instead of depreciating over years.
Example:
Buy a new blender for your café—instant deduction. Buy a $50k espresso machine? Sorry, you wait.
Visual idea: A tiny asset icon with a green “instant deduction” stamp.

Dignity, authority, and standing.
Poverty undermines mana. Extreme inequality undermines mana.
A wellbeing economy protects everyone’s mana by ensuring people can live with security and respect.
Visual idea: A person standing tall with a community behind them.

Care, generosity, and uplifting others.
Manaakitanga is about ensuring people are supported and treated with dignity.
A fair tax system is an expression of manaakitanga. We all contribute so everyone can access healthcare, education, and a decent life.
Visual idea: Hands offering food, shelter, or support.

The tax rate paid on the next dollar you earn, in contrast to your average tax rate. Tax goes up in steps, or brackets, with the marginal tax rate only applying to income you earn within that bracket.
Aotearoa has progressive tax brackets, so higher income is taxed at higher marginal rates.
Example
If your marginal rate is 33%, that doesn’t mean all your income is taxed at 33% — only the portion above the bracket threshold for that rate.
Visual idea: A staircase showing higher rates only on higher steps.

The idea that an extra dollar matters more to someone on a low income than someone already rich.
For a struggling family, $100 might mean groceries. For a billionaire, it’s… genuinely nothing.
This is one reason progressive taxation improves overall wellbeing in society. Money goes where it can produce more wellbeing.
Visual idea: $100 filling a nearly-empty cup vs barely changing an overflowing cup.

When companies can raise prices or sell shoddy products because consumers have few alternatives.

The median income is Aotearoa’s “middle” income. In June 2025 it was $959.00 per week before tax.
If you line everyone up from lowest income to highest income, the median is the person right in the centre.
Median income is used (instead of average) because very high incomes at the top can distort the average.
Visual idea: A line of stick figures with one highlighted in the middle.

People who earn around the median income.
Middle-income households often pay a higher effective tax rate than the wealthiest, because most of their income comes from wages (which are fully taxed).
They’re the backbone of the economy—their consumption creates jobs—and they shouldn’t be the ones carrying the heaviest load.

When one (or a few) firms dominate a market— think supermarkets, banking, and power suppliers.

A company that operates in many countries.
Multinationals can move profits across borders in ways local businesses can’t.
Visual idea: A globe with a corporate logo stamped across countries.

Mother Nature’s piggy bank — the ecosystems, land, water, plants, animals, and even the “rules” that let ecosystems run smoothly.
Invest in natural capital and it gives us clean air, fertile soil, freshwater, pollination, and climate stability.
Abuse it, and suddenly we’re paying for floods, droughts, and bee shortages.

A collection of ideas based on the view that letting private businesses run the economy will lead to the best outcomes for all. In Aotearoa, this approach has only increased rates of poverty, so it might be time for a rethink.
Visual idea: GDP measurement meter filled up with cigarettes and plastic waste.

What you own minus what you owe.
Net wealth = assets − debts.
Wealth taxes are usually based on net wealth, not gross assets.
In Aotearoa the richest 10% have net wealth over $2 million. That means $2 million left after the mortgage and student loan are fully paid!
Example
If someone owns a $1 million house but has a $700,000 mortgage, their net wealth is $300,000.
Visual idea: Assets box minus debts box = what’s left.

The Organisation for Economic Co-operation and Development.
A club of mostly high-income countries based in Paris that compares policies, publishes reports, and makes recommendations which are very influential.
While a cheerleader for neoliberal policies for a long time, more recently the OECD has grown concerned about poverty and inequality. It has been puzzled that even though Aotearoa followed model neoliberal policies for many years, the benefits that were supposed to flow have not appeared.
The OECD has pointed out that Aotearoa relies heavily on GST and income tax, while undertaxing wealth.

Outside Aotearoa, often referring to money or profits shifted overseas.
Visual idea: Money floating away on a boat

Māori concept of prosperity. Not just money, but wellbeing for people, culture, and land.
Example:
Tax policies that fund education, climate action, and cultural programs grow ōhanga.
Visual idea: A flourishing tree rooted in people and land.

Income from owning assets rather than working. Sometimes also called non-exertion income (in contrast to labour income which is exertion income).
Example:
Rent, dividends, interest — often taxed more lightly than wages.
Visual idea: A hammock with money falling into it.

Pay As You Earn—tax deducted from regular income automatically. Mainly from wages and salaries.
Example:
Workers can’t avoid paying their tax. The self-employed, and companies, find many ways to avoid paying
Visual idea: A payslip with tax already removed.

Tax paid by employers based on the size of the payroll (total wages paid by the company). If employees are in a weak bargaining position this tax may be passed on to them in the form of reduced pay.
Example:
Employers pay a levy on their payroll to fund ACC.
Visual idea: A stack of employee icons with coins flowing upward.

A physical presence of a foreign company in Aotearoa that triggers tax obligations.
Example:
If Amazon sets up a warehouse in Aotearoa, it can’t dodge NZ corporate tax.
Visual idea: A warehouse stamped “PE = taxable.”

People with very low income or wealth, often struggling to meet basic needs.
Poverty isn’t a personal failure or a character trait— it’s a policy outcome.
A fair tax system is one of the most powerful tools to reduce poverty and improve living standards.

A type of investment fund, like a KiwiSaver fund, whose tax rates depend on the income of individual investors. .

PIE tax rates depend on the income of individual investors but have a maximum tax rate of 28%, which is less than the top income tax rate.
Visual idea: Multiple investors pouring coins into a single fund.

Poverty in Aotearoa is not just about survival—it’s about whether people have enough resources to live with dignity and participate in society.
Aotearoa often measures poverty as a proportion of the median household income.
A common threshold is 60% of the median income (after housing costs).
This approach recognises something crucial: the goalposts shift. What it costs to participate in society changes over time — housing, transport, internet, school costs.
Poverty is relational: it’s about exclusion from normal life, not just empty cupboards.
Visual idea: A moving line labelled “median income” with the poverty threshold moving alongside it.

Output per unit of input such as how many flat whites a barista can serve in an hour of work.
Sometimes a rise in productivity can mean some workers lose their jobs, but historically new jobs have eventually been created so there was no net job loss. The transition to the new jobs can mean hard times for those workers though, and they need government support to help them through those times.
Visual idea: A factory icon with a speedometer.

Money a business makes after wages and other costs are paid.
Profit is not inherently bad—we want businesses to thrive.
The problem is when excessive profits are extracted while workers struggle and public services are underfunded.
Visual idea: Revenue minus costs = profit (simple equation graphic).

When companies move their profits to another related company, perhaps in another country, to dodge tax.
Example:
Companies channel goods through a subsidiary of the company in a low tax country to sell at a high price to another subsidiary in a higher tax country, making high profits in the low tax country and not many in the high tax country.
Visual idea: A suitcase labelled “profits” being rolled onto a plane.

When companies raise prices in order to earn higher profits, not because costs increased, but because they can.
This can worsen inflation. It is especially a risk in sectors like supermarkets or energy where there is little competition. It is also a risk at times like after the pandemic when some goods are scarce.
Sometimes inflation isn’t just “the economy.” Sometimes it’s corporate behaviour.

A tax system where higher earners pay a higher rate.
Progressive taxes help fund public services and reduce inequality.
Most people support progressive taxation because it’s just common sense: those with more should contribute more.
Visual idea: A gently rising slope: higher incomes → higher rates.

Buying property not to live in, but as a bet on prices rising so that the property can be sold for capital gains.
Basically profiting from homes getting less affordable for everyday people.
Visual idea: Houses treated like poker chips.

Income tax instalments paid during the year by companies and the self-employed.
PAYE tax payers like wage and salary earners don’t have to pay provisional tax because their tax is deducted at every pay.
Example:
Prepay your tax so you’re not hit with a giant bill at year-end.
Visual idea: A calendar with coins on each month.

See Country by Country Reporting
Public Country-by-Country Reporting, such as Australia’s government requires, means that information about how much tax multinationals pay in each country is published for everyone to see.

A Public Good is one that no-one can be excluded from using, and one person using it doesn’t stop others using it.
Public goods are under-provided by unregulated markets. That’s because public goods can’t be gatekept. Think clean air, street lamps. Some, like broadcast TV and radio, are provided by the market, paid for by advertising. But they are comparatively rare.
We wouldn’t pay an entry fee to enjoy clean air, because it’s all around us. But we do still want clean air! And we don’t want to have to buy a ticket. Hello dystopia.
So the government has to provide public goods that don’t occur naturally, like public parks and street lighting.
Our taxes pay for public goods so we can all reap the benefits.
Visual idea: Playground + hospital + bus icons.

A deal where private companies help fund or run public infrastructure projects.
PPPs are often sold as “efficient,” but they can end up costing the public more in the long run—while profits flow to private investors.
Public services should serve the public, not shareholders.
Visual idea: A road with a toll booth: “public pays, private profits?”

People who work hard in public services to make Aotearoa better for everyone.
Example:
Teachers, nurses, firefighters.
Visual idea: Teachers, nurses, firefighters

Services provided by the government for everyone’s wellbeing, like healthcare and education.
Visual idea: Icons of a hospital, school, bus.

The goods and services that your income can actually buy.
Example:
Inflation reduces purchasing power, hurting low-income households most.
Visual idea: A shrinking shopping basket.

A refund or discount on tax that you get back from the government. Rebates are relatively rare in Aotearoa but are used more frequently in other countries.
Working for Families can be thought of as a tax rebate because it is described as a “tax credit” rather than a welfare payment. Tax rebates are available if you donate to a charity.
Because high income people pay more tax, rebates can be of greater advantage to them.
Example
If the government offers a GST rebate for low-income households, that’s a way of reducing financial stress and improving living standards.
Visual idea: A simple graphic of a receipt with a little arrow looping back: “Money back.”

All private income and wealth is created using social resources. For example, every company employs workers educated at NZ schools, who get to work on public roads, and are looked after by public health care.
Without tax, the market does not distribute income and wealth in ways that reflect this public investment. The market also fails to allow everyone to live a dignified life, and it is unable to address many collective problems that we all face.
Redistribution is about addressing failures of the market. Tax is used to redistribute wealth and income, to achieve greater social or economic equality, and to invest back into the social resources that make wealth creation possible in the first place.

A tax where a person or household with less income pays a higher proportion of their income towards that tax.
Regressive taxes can worsen inequality and reduce wellbeing, because they take more from people who already have less.
Example
In Aotearoa, low income households spend most of their income on items that are taxed under GST. They pay more GST for each dollar of their income than higher income households.
Visual idea: Two buckets: one small bucket labelled “low income” losing more water proportionally than a huge bucket labelled “high income.”

The idea that equality is not just about money, but about relationships and social standing.
A relationally equal society is one where:
* no one is dominated by extreme wealth
* everyone can participate as an equal citizen
* mana is protected
* power is not hoarded at the top
This links directly to tax: extreme inequality creates social hierarchy, while fair taxation supports shared wellbeing and democratic belonging.
Relational egalitarianism says: It’s not only about having enough — it’s about living in a society of equals.
Visual idea: A circle of people standing at the same level, rather than a pyramid.

A tax designed to correct or “remedy” an economic, social or environmental problem.
Remedial taxes can improve wellbeing by discouraging harmful activities and funding public services, or subsidising goods or services that reduce the problem.
Example
A pollution tax can reduce environmental damage and help fund climate-resilient infrastructure.
Visual idea: A smokestack with a price tag, turning into a tree or clean transport.

When people and companies make use of their possession of a scarce resource or skill to bump up the prices they charge in order to make profits at above the normally accepted rate. It could be a temporary scarcity such as when a war cuts off supplies of some goods, or a permanent one such as being a monopoly or oligopoly.
Example:
When supermarkets raise their prices because they don’t have many effective competitors.

The money the government collects, mostly through tax.
Revenue and borrowing are how we fund the things that make life work: hospitals, schools, public transport, climate adaptation, and income support. If we borrow, such as to build a hospital, or help the country through a downturn, we need revenue to pay interest on the loan.
A wellbeing economy needs strong revenue—because wellbeing isn’t free, it’s built.
Visual idea: A “community pot” filling up, labelled health + education + environment.

People with very high income or wealth. In Aotearoa the richest 10% of individuals receive much more than $120 thousand annually, with some receiving well over $1 million a year.
In tax debates, “rich” often refers not just to high salaries, but to people who receive large amounts of income through assets like property and shares.
A fair system asks those with the most ability to pay to contribute more, because that strengthens society for everyone.
Visual idea: A ladder showing income from wages vs income from wealth.

A proposed tax on automation replacing human workers. It could be used against automation that just increases the profits of the owners without much benefit to society, and could help pay for financial, training and other assistance to workers who lose their jobs or find it hard to get work because of automation.
Example:
If robots replace jobs, society still needs revenue for wellbeing and retraining.
Visual idea: A robot holding a payslip.

Delays taxation when a capital gain is realised, usually when the owner had little choice (such as a building being destroyed in an earthquake and replaced on insurance) or there is a social reason the concession is seen to be fair.
Example:
If a building is destroyed in an earthquake, insurance pays more for its replacement than it was originally purchased for, and a new building built—there’s no immediate tax, but the rise in value is considered for calculating the tax when the property is eventually sold.
Visual idea: Coins rolling over a calendar.

Payments made for the right to use something like natural resources, music, patents, or mining rights.
Royalties are one way the public can benefit when private companies profit from shared resources.
Example
If a company extracts minerals, royalties ensure the public gets a return—not just the shareholders.
Visual idea: A mountain with a coin flowing back into a school/hospital icon.

Payments multinationals claim they’re making to a related company in another country for “services,” but are really just a sneaky way to move profit offshore.
Visual idea: Invoice labelled “totally legit service fee”.

The mastermind who creates a trust and puts assets in it. Sometimes for good reason, sometimes to avoid tax.
Example:
Grandpa puts his forest land into a trust to preserve native birds — he’s the settlor, the eco-hero who kicks it all off.

Someone who owns shares in a company and benefits from its profits.
Visual idea: A person holding a tiny slice of a company pie.

Units of ownership in a company.
Shares are a major form of wealth, and they often generate income through dividends or capital gains.
Shares are disproportionately owned by the wealthiest households.
Visual idea: A pie chart where one slice is huge: “top 10% ownership.”

Local businesses that aren’t huge corporations. There’s no fixed definition and it varies from country to country, but a common definition in Aotearoa is a firm with fewer than 20 employees.
Visual idea: A small shop next to a corporate skyscraper.

All the invisible glue that makes society work—networks, trust, norms, and relationships.
Think of it like your community Wi-Fi: strong connections mean everyone gets more signal.
When social capital is healthy, neighbours help each other, communities organise, and cooperation replaces chaos.
Low social capital? You get isolation, distrust, and someone stealing the last bag of toilet paper during a crisis.
Example:
Investing in social capital can include funding local youth clubs, community gardens, or mentorship programs — everyone gets richer in trust, skills, and connection.

The idea that we all contribute so we can all benefit. Both the government and people can expect to receive something from the other, but also commit to carrying out their responsibilities as part of society.
Example:
The government ensures our health system has the resources necessary to meet our needs, and we pay the taxes necessary to provide the resources. The tax we pay is often less than the cost if we all purchased the service individually.
Visual idea: A handshake between people and government.

Social return on investment—not all benefits from investment are monetary profits.
Example:
Investing in libraries helps connect communities—that’s a social benefit.

Stocks can be a collection of shares, but they also refer to a fixed amount of some resource. For example, income is a flow variable, but the amount of savings that you have on Tuesday is a stock variable.

A company owned by another “parent” company—often used in complex tax structures.
Visual idea: Corporate family tree.

Profits far above what’s normal. Often earned during crises or when competition is weak.
Visual idea: A profit bar shooting way above the others.

An extra tax added on top of an existing one, usually for high earners or special cases.
Surcharges are often used to increase fairness without changing the whole system.
Example
A surcharge on banks could recognise that banks are making very high rates of profit by raising costs for everyone.
Visual idea: A tax meter with a “bonus band” at the top.

Different people use this term differently.
It can sometimes mean an economy that can continue to operate long term the way that it does now.
It can also mean a circular, regenerative, ecological economy that protects the planet and future generations.
Example:
Tax policies can incentivize renewable energy, recycling, and ethical business practices, making the economy sustainable by both of the definitions included above.
Visual idea: A green loop with factories, trees, and people.

Using legal loopholes to reduce tax payments.
Also called ‘tax planning’ by tax consultants.
Tax avoidance might be technically legal, but it undermines fairness and weakens the resources we need for collective wellbeing. The term is often used in contrast to ‘tax evasion’ - which is downright illegal. A helpful term for both together, and which avoids the idea that if it is technically legal it must be ok, is ‘tax abuse’.
Example
Using trusts or offshore structures to make income “disappear” for tax purposes.
Visual idea: A maze labelled “loopholes” with money slipping out.

The total amount of income, wealth, or spending that a tax system covers.
A broad tax base means fewer loopholes and less opportunity for avoidance.
Aotearoa has a broad base for income and consumer spending (personal and company income tax and GST) except that it largely misses income from capital gains—but a narrow base for wealth, which is why the system is unbalanced.
Visual idea: A net catching fish: wide net vs full of holes.

A special exemption, discount, or deduction that reduces tax owed.
Untargeted tax breaks often benefit the richest most.
Visual idea: A broken tax bill with a “discount” sticker.

Reductions in tax owed, often designed to support households or incentivise good outcomes, but they can also be poorly designed and benefit mostly the rich.
Well designed tax credits can improve wellbeing by reducing poverty and supporting families.
Example
Working for Families is a tax credit system.
Visual idea: A tax bill with a sticker: “credit applied.”

The sweet spot where tax system design both raises revenue and supports positive economic outcomes.
Some people frame tax as an “efficiency vs equity” trade-off — but actually equity itself is efficient, because societies with less inequality have better health, productivity, trust, and stability.
A tax system that supports wellbeing is both fair and smart.
Visual idea: Two gears labelled “equity” and “efficiency” turning together.

Illegally hiding income or wealth to avoid paying into our collective pool A general term which links tax evasion and tax avoidance is ‘tax abuse’.
Visual idea: A masked money bag sneaking past IRD.

A chunk of income you don’t pay tax on, aimed to help people on the lowest incomes. Because it is at the bottom of the scale, everyone gets it, making it a very expensive policy.
Example:
Australians don’t pay income tax on the first A$18,200 of their income.
Visual idea: Income ladder with first rung labelled “free.”

A low-tax country or area used to hide profits or wealth.
Visual idea: Tropical island

A Māori worldview: holistic, relational, and spiritual.
Example:
Policies consider land, whānau, community, culture, and wellbeing.
Visual idea: A circle showing land, people, culture, and environment.

When multinational companies load their NZ branch with debt (often owed to themselves overseas) so they can claim large interest deductions and reduce taxable profit here.
It’s a classic profit-shifting strategy.
Visual idea: A company tree with profits being siphoned through a straw offshore.

A cutoff point — like ‘this rule applies only if profits exceed $100m’.
Visual idea: A line you have to jump over.

Customs, rules, and lore in Māori society.
Example:
Respecting local tikanga in land management or resource allocation ensures social cohesion.
Visual idea: A pattern or koru design overlaying community icons.

Companies so huge that if they collapse, the whole economy suffers — so the public has to rescue them. See also: Bail Out
Visual idea: Giant domino labelled “bank.”

When another country threatens economic punishment such as stopping your country’s exports to them or putting a tax (a tariff) on the exports, because they don’t like something you have done, such as your tax rules.
Visual idea: Two flags in a tug-of-war over a dollar sign.

Movements of money from the government, such as to households or businesses.
Transfers to households are usually to support wellbeing. They help ensure everyone can participate in society, not just survive.
In Aotearoa the largest form of transfer payments is for New Zealand Superannuation.
Visual idea: Hands passing a support package.

Making financial information, such as profits and taxes paid, public so companies can’t hide what they’re doing.
Visual idea: Spotlight on a corporate balance sheet.

The lucky person (or people) who get to enjoy the trust’s assets or income.
Example:
A trust pays for your school fees—you’re the beneficiary, living the good life thanks to someone else’s foresight.
Visual idea: A person catching coins and plants raining down from a treasure chest.

The person (or people) legally responsible for managing the trust and keeping everything legit.
Example:
Trustee ensures funds for a community renewable energy project are spent wisely — they pay the tax, manage the money, and keep the mission on track.
Visual idea: A vigilant person guarding a chest labelled “Trust Funds,” with a checklist in hand.

Income of the trust that hasn’t been allocated to beneficiaries yet. The trust pays the tax on the income.
Example:
Trust rents out a property, money sits there — trustees are responsible for ensuring the trust pays the tax on it until beneficiaries get it.
Visual idea: Coins sitting in a vault with trustee emoji icons on guard.

The tax rate applied to trustee income.
Example:
Trustee income = taxed at 39% in NZ.
Visual idea: A tax meter on a vault of coins.

A public record of trusts so wealth can’t hide in the shadows. Aotearoa does not have a Trust Register, but we should.
Visual idea: Filing cabinet opened with sunlight.

Legal structures where assets are held by trustees for beneficiaries.
Trusts can be useful, but they’re also commonly used to reduce tax and hide wealth.
That undermines equity—because it creates one set of rules for insiders, and another for everyone else.
Visual idea: A locked box labelled “trust” with a question mark.

A proposed global framework where countries cooperate on fairer tax rules—especially for the Global South. This framework is now being negotiated but we don’t know when it will be in place.
Visual idea: UN building with a giant calculator.

The United Nations Tax Committee.
A global body working on international tax cooperation, especially to support fairer rules for developing countries.
Tax justice is global justice, because profit shifting hurts poorer countries the most.
Visual idea: A globe with arrows showing money flows.

Cost, price, wage, fee, payment, salary.
Also balance, reciprocity, and restoring fairness.
Utu is often misunderstood as revenge, but at its heart, it’s about restoring equilibrium.
Tax is a form of utu in society: those with more benefit most from the system contribute back to maintain balance.
Visual idea: Balanced scales with community wellbeing on both sides.

Economists use value in a lot of different ways! Monetary value is like the price tag. It’s what gets used to calculate GDP. But there are many, many, types of value.
It’s worth paying attention to what someone really means when they use this term. They might not value the same things as you.

The stock of what someone owns.
Wealth includes property, shares, savings, businesses, and physical assets.
Wealth matters for wellbeing because it provides security, power, and opportunity. In Aotearoa, wealth is very unevenly distributed.
It can also become more unequally distributed with time, because wealth can be passed on through inheritance, creating dynasties of wealthy families.
Visual idea: A house + shares + piggy bank bundle.

When a large share of wealth is held by a small group at the top.
Wealth concentration undermines trust and our social connections to each other. It can mean some New Zealander’s live in a completely different world to the rest of us.
Visual idea: A pyramid of coins heavily weighted at the top.

A tax on net wealth. It is usually at a low rate and on wealth above a high threshold.
Wealth taxes are designed to reduce inequality, raise revenue, and support public wellbeing.
Example
A 1–2% tax on fortunes over $5 million could fund healthcare, climate resilience, or poverty reduction.
Visual idea: A very tall stack of coins with only the top taxed.

See: Inheritance Tax
A tax on large transfers of wealth, such as inheritances, or gifts given during the giver’s lifetime. Aotearoa does not currently have a wealth transfer tax.
Wealth transfer taxes are an important tool for making sure hard work can still get you ahead. Without one, some of the richest New Zealanders are living off their Grandma’s hard work, not their own.
Example
Grandma Burns transfers $2 million to her favourite nephew when he turns 30. A Wealth Transfer Tax says ‘that’s income’.
Visual idea: A relay baton labelled “wealth” being passed down generations.

People with high net wealth, often earning large amounts through assets rather than wages.
The wealthiest can pay surprisingly low effective tax rates because capital gains and wealth itself are untaxed, and because the wealthy can pay for advice on how to minimise the tax they pay.
Visual idea: Two income streams: wages taxed heavily, wealth taxed lightly.

Wellbeing is about living a good life, not just surviving.
In Aotearoa, wellbeing includes things like:

• good health
• safe housing
• meaningful work
• strong communities
• a healthy environment
• cultural belonging
• dignity and security

A wellbeing economy asks: Does our system help people and nature flourish?
Tax is one of the most powerful wellbeing tools we have, because it funds the public services and infrastructure that make life liveable.
Te Whare Tapa Wha diagram from: https://thelevel.org.nz/support-and-advice/reflecting/questions-to-ask-yourself/te-whare-tapa-wha

Challenge. In Te Ao Māori wero forms part of the greeting ceremony, testing the fortitude of visitors.
Our wero is overcoming the wall of opposition to fair tax from vested interests seeking to protect their privileged position.

To uplift and empower people. A fair tax system does this.

Connection and belonging. Strong societies are built on relationships, not just markets.
Tax supports whanaungatanga by funding the shared foundations that keep communities connected.
Visual idea: A network of people linked in a circle.

A large, unexpected gain or profit by people or firms, due to events outside their control such as luck, a change in government policy, or market conditions, not their own productive efforts.
Windfall profits can occur when companies raise prices during crises.
Windfall taxes are sometimes used to redirect excess gains into public benefit.
Visual idea: A money tree in a storm.

Tax deducted at the source before income is paid out.
Example
Interest income or dividends often have withholding tax deducted automatically before the income gets to you.
Visual idea : A tap dripping money, with a small portion diverted to IRD.

A collection of different payments that families in Aotearoa can receive based on their number of children, income, and other circumstances.