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Tax Avoidance: Is It Always Morally Wrong?

Tax Avoidance: Is It Always Morally Wrong?

“Frankly and morally wrong.”

David Cameron’s thoughts on Jimmy Carr’s tax arrangements were clear. The ethics of tax avoidance crop up from time to time. On January 19th, the World Economics Forum heard from Oxfam about a failure to tackle global corporate tax avoidance. Earlier in the year, HMRC boasted an £886m windfall from anti-tax avoidance measures.

For the record, I’ve always paid my taxes. However, I don’t do so out of moral compunction. Taxes are paid because it is the law and there are punishments for not doing so. That is the only reason.

The problem with taxation is that we have little input as to how the money is spent. I am perfectly happy to help fund the National Health Service, contribute towards urban regeneration projects, support science and innovation, etc. However, not all of our taxes go towards something I consider noble or worthwhile. In fact, the UK government spends money on things that I think are morally wrong. That whole Snooper’s Charter thing will cost money. I don’t feel comfortable contributing to it. I’m also not fond of even the slightest of my contributions going towards the carpet-bombing of a Middle Eastern country without a fucking good reason.

There Are Bigger Tax Dodgers

There are lots of these little things that are funded by our taxes that I disagree with. Some, I even find morally contemptible. Now, yes, I know that the reason the wealthy avoid tax is not to make a statement about government ethics. No, they do so because they want to keep more of their money and that isn’t something that garners support. Furthermore, when it’s multi-national corporations that are avoiding billions in tax, it is objectionable.

The laws that permit the extremely wealthy and major corporations to limit their tax exposure exist because of the government. People in positions of power have allowed these loopholes to continue. They know damn well these legal holes exist. All they do is pay public lip service to the problem, and then go on allowing them.

Indeed, the UK is threatening to become an offshore tax haven for big business. Corporations already have far more power than individuals and small businesses to negotiate favourable tax breaks with governments. At times the UK has “celebrated” victories in convincing multinationals to cough up a small slither of what they reasonably owe. How can this be considered moral? Surely if us lowly plebs are forced to contribute to unethical government schemes, big business should be required to pay a fair share?

Naughty Plumbers

Meanwhile, the government complain about tradespeople receiving cash-in-hand payments and avoiding some tax. Sometimes they complain about hobby or micro-businesses and the unknowingly self-employed. Or they take a pop at certain celebrities, like Jimmy Carr, while playing the moralistic card.

All the while, the politicians claim ludicrous levels of expenses and continue to permit, or even encourage, the corporate tax dodging that does more harm to their coffers. And rarely do they consult with the public on how funds should be spent. I’m not anti-Trident, but I’m willing to wager if you had a public referendum over reducing our expenditure on Trident to increase spending on the NHS, the latter would win in a landslide. That said, many of us are tired of referendums now.

If the UK does become a tax haven, how can they argue the moral high ground on going after Pete the Plumber over a few cash-in-hand payments while letting Omni Consumer Products off? Put simply; they cannot. Us small fish will be left picking up the tab for big business. We will be the ones funding the unethical behaviour of our government.

Taxation With Shoddy Representation

I understand, we elect our governments and manifestos are supposed to give an indication of spending policy. Firstly, though, we elect a local MP to represent our constituency. Secondly, manifestos are not legally binding. Thirdly, many of us live in safe seats where our vote doesn’t really count. First-past-the-post does not adequately provide for the representation of vast swathes of the electorate. If we’re forced to live under these rules, then we should have more say on how our taxes are spent. That we lack input means that our money can be spent on things that we find morally reprehensible.

Until we have greater transparency, public input and the closure of loopholes to benefit massive corporations, I’m not buying the morally wrong argument. I’ll still pay bloody tax because I don’t want to go to prison. But doesn’t that say something in itself? If somebody objects to the way their contributions are spent, they risk imprisonment for taking a stand. I suppose, though, nobody would believe them. The government would argue they only avoided tax to keep more of their money. It would probably be accurate in some cases. However, for now, I will sit in quiet resentment at the fact that it is supposedly morally wrong not to contribute to a government that behaves unethically.

2 Comments

  1. Phil

    I get what you are saying but I think it is wrong to avoid tax. Part of living in any country is contributing to that country and we might not always agree with how our taxes are spent. I get there are bankers and corporations that avoid billions and do agree more should be done but we have to be careful that we don’t adopt a mindset where tax could be optional. I get you’re pro-NHS spending but there are some who aren’t just as you appear to be anti-military spending when others would say we don’t spend enough.

    The big problem is that there’s never enough money to satisfy everyone. If more people avoided tax there would be even less.

    Reply
    • C. John Archer

      Absolutely fair points.

      Yes, in principle I agree that we all have to contribute to the running of the country. And I know that, in reality, if we could choose exactly how our personal taxes were spent we’d end up seeing massive amounts towards education or health, and next to nothing towards vital things such as infrastructure.

      The above was mostly a moan that, when we talk about the morals of tax avoidance, there is too much of a focus on the small businesses, the cash-in-hand payments or the somewhat rich, while the corporations and ultra-rich are ignored.

      Just to clarify, I’m not anti-military spending. I’m against spending extra on avoidable military aggression.

      Reply

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