The Times leader today has a lesson for those of us interested in the ethical status of tax avoidance: "Tax avoidance is not justified solely by the plea that it is within the law. Tax avoidance is a way of playing the system to gain reward that has not genuinely been earned. It is, indeed, a form of cheating."
Not so, O mighty Some-guy-behind-an-editor's-desk. If a game has rules and you play within the rules, then you are not cheating. There is no "spirit of the rules" to a game: Fool's Check is not a friendly thing to do to someone, but it is an exploitation of a position on which the rules of Chess pass no comment. In Chess, if you're stupid enough to walk into Fool's Check, tough luck.
While tax avoidance does, therefore, seem to have some sort of ethical character, it is precisely not cheating. (Which is just as well, because I'm not sure that cheating is immoral either, in and of itself.)
You might counter: this is not a game, it is people's lives & livelihoods. And you'd be right. But for someone to be cheating on the tax non-game, you'd need to show that there are two parties to the relationship, and most of us do not sign up to be taxed.
In the extreme, it's like saying that you would be cheating not to mention the fiver you have in your back pocket in the course of being mugged. Tax money is not a voluntary payment and most of us have it subtracted by our employer before we ever get our hands on a wage.
Before you tell me that there's an implicit Social Contract ... who told you that? Was it the guy who has your wallet, by any chance, and is haring down the nearest ally to blow your money on foreign wars and bail-outs for bankers? Did he mention that he was only going spend your money on the National Health Service and the Police Services before or after he relieved you of your watch & wedding ring?
Moreover, HMRC does not play within the rules of a game: it makes the rules. But the most ghastly rules ever made with regard to taxation is this: you are now regarded as morally culpable if you do something deemed intended to avoid tax.
Imagine that you are driving your car at 49 mph in a 50 mph speed limit, when you are pulled over by the police. It seems that driving at 49 mph is now deemed as penalty avoidance and the police rely on those penalties to support policing in the area. You have a car more than capable of 130 mph, you wealthy bastard. Stop grinding the faces of people who can only afford a bicycle.
Then when you get home there's a letter from HMRC condemning you for attempting to avoid VAT by saving your money rather than spending it: they have ordered a new television for you and charged your credit card accordingly. Oh, and they find that you could afford the mortgage on a house in a higher Council Tax band, so the furniture van will be calling next Thursday, some time between midnight and midnight.
Oh, and if it's against the law to enter into a scheme to avoid paying tax, there will be a lot of people after the next election looking very shame-faced ... because avoiding tax has always been the strongest reason for voting Conservative.
Showing posts with label Ethics. Show all posts
Showing posts with label Ethics. Show all posts
Thursday, June 21, 2012
Thursday, March 29, 2012
Dining With The Tax-Collectors
One of the things that her Majesty's Government has recently been banging on about is what a terrible thing it is to avoid tax "aggressively".
(I'm not sure how much aggression goes into that, to be honest: most individuals with high net worth would delegate the job of cutting tax payments to their accountants, who are not typically of the attack-dog demeanour. Perhaps Mr. Osborne should be more worried about people avoiding tax ploddingly.)
Be that as it may, the cry of the Coalition has gone out that evading tax is morally wrong.
But are they right?
The usual citation from Revealed Theology on this one is Christ's admonition - when asked if the Jews should continue to pay tax to their Roman occupiers - to "render unto Caesar what is Caesar's". The point of this story is that His political adversaries were trying to whip up some trouble and had set this question as a trap, which He nimbly sidestepped. The answer, then, was really a nice piece of verbal sleight-of-hand.
In any case, very few people today look to revelation for their moral attitudes (what with all the stoning and eye-putting-out 'n' all) so the more usual question is whether there is a rational reason for thinking that evading tax is ethically a bad thing.
If one considers tax to be a form of charity or wealth distribution (a way to fund healthcare and social security for those less fortunate than those with taxable income) then I suppose one can argue that taxation serves a socially benign purpose. There is no logical reason, however, why someone who dodges taxation may not contribute to charity at least as much money as they withhold through avoiding tax. Charity may have a definite moral character that paying tax does not, since it is voluntary.
Moreover, not all taxation has a socially beneficial function. There is theOffence Defence Budget for a start. And before you complain that were everyone to withhold tax revenue then we could not nationally benefit all citizens such as the military, police and fire services: the responsibility for funding these services has an equal benefit to all, yet all citizens capable of paying for them do not contribute equally. The redistributive function of taxation and the social contract element should not be confused.
People who avoid taxation tend to top-slice their payments: they still pay at least as much as is required for essential services and often tens of thousands of pounds more.
Tax avoidance is generally intended to mitigate disadvantageously high tax regimes, and the people best placed to use it are the ones who have such wealth that they can pretty much afford to switch tax regime at will. Try sheltering your assets when you have no assets to shelter. The ultimate sanction of those wishing to avoid tax is therefore to emigrate, at which point we lose not only income tax, but also the many other sources of taxation to which the rich, and the rest of us, are usually subject. Such as V.A.T. on purchases.
The wealthy live under no moral or ethical obligation to pay tax. The politicians and media who - with increasing frequency - treat as wrongdoers those who take practical steps to husband their resources are, on the other hand, venturing onto very perilous moral & practical grounds.
(I'm not sure how much aggression goes into that, to be honest: most individuals with high net worth would delegate the job of cutting tax payments to their accountants, who are not typically of the attack-dog demeanour. Perhaps Mr. Osborne should be more worried about people avoiding tax ploddingly.)
Be that as it may, the cry of the Coalition has gone out that evading tax is morally wrong.
But are they right?
The usual citation from Revealed Theology on this one is Christ's admonition - when asked if the Jews should continue to pay tax to their Roman occupiers - to "render unto Caesar what is Caesar's". The point of this story is that His political adversaries were trying to whip up some trouble and had set this question as a trap, which He nimbly sidestepped. The answer, then, was really a nice piece of verbal sleight-of-hand.
In any case, very few people today look to revelation for their moral attitudes (what with all the stoning and eye-putting-out 'n' all) so the more usual question is whether there is a rational reason for thinking that evading tax is ethically a bad thing.
If one considers tax to be a form of charity or wealth distribution (a way to fund healthcare and social security for those less fortunate than those with taxable income) then I suppose one can argue that taxation serves a socially benign purpose. There is no logical reason, however, why someone who dodges taxation may not contribute to charity at least as much money as they withhold through avoiding tax. Charity may have a definite moral character that paying tax does not, since it is voluntary.
Moreover, not all taxation has a socially beneficial function. There is the
People who avoid taxation tend to top-slice their payments: they still pay at least as much as is required for essential services and often tens of thousands of pounds more.
Tax avoidance is generally intended to mitigate disadvantageously high tax regimes, and the people best placed to use it are the ones who have such wealth that they can pretty much afford to switch tax regime at will. Try sheltering your assets when you have no assets to shelter. The ultimate sanction of those wishing to avoid tax is therefore to emigrate, at which point we lose not only income tax, but also the many other sources of taxation to which the rich, and the rest of us, are usually subject. Such as V.A.T. on purchases.
The wealthy live under no moral or ethical obligation to pay tax. The politicians and media who - with increasing frequency - treat as wrongdoers those who take practical steps to husband their resources are, on the other hand, venturing onto very perilous moral & practical grounds.
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