So there is much talk these days of the ‘morality’ of tax avoidance – or rather, the supposed lack of morals on the part of those exercising their right not to pay more than they are being asked for.
To suggest that tax avoidance is immoral would logically require two assertions to be true; that:
(a) tax is moral
As well as the implication that avoiding tax is harmful, in the long term, for ‘society’.
Let’s deal with each of these in turn.
Tax is, essentially, demanding money with menaces. The State, of course, is in a fairly unique position in being able to do this without being dealt with in the same fashion as the Krays.
Yet just because you’ve been mugged, by an assailant who then donates the contents of your wallet to charity, the worthiness of the ultimate recipient of your stolen property doesn’t mitigate the immorality of the crime.
However, most people accept tax – to a degree – as a necessary evil and the most practical method of funding at least those services the benefit of which is indivisible – typically defence or policing. Other services are also funded in this way because tax acts as a convenient proxy for, say, state medical insurance premiums or state old age pension contributions (we’ll leave aside the debate about whether this is actually the best method – it’s simply the ‘easiest’ one).
Thus to suggest that tax is positively moral is highly questionable, A gun is neither moral nor immoral – it is merely a tool and such judgements only apply to the use to which it is put. So we might just charitably say that tax is morally neutral – the ends justifying the means. Clearly, we can already see that any debate about tax should be a no-go area for any mention of morals (or indeed, fairness, but that’s for another article, some day).
So given that tax is not moral, avoiding it cannot be immoral. However, what of the motives of those practicing tax avoidance?
The Left – and indeed faux ‘non-ideologues’ like the authoritarian Keynesian Theresa May – play to the stereotype of the ‘tax dodger’ (a term usefully conflating avoidance and evasion) as a selfish brute who would rather see the sick die in the streets and the children of the poor sent back up chimneys just so they might keep a few extra quid from the taxman.
Yet far from wanting to keep money in their pockets to spend on buying puppies to drown, most people who avoid tax – from the likes of your average BBC presenter to the one-man band tradesman splitting his income with his wife – will simply explain that ‘the government’s already had enough from me’*. That is not the language of one who rejects any need to fund the police or the repair of the roads. After all, it is nigh on impossible to pay no tax whatsoever with VAT, for example, levied on many everyday purchases.
The truth is that people generally do not object to paying for ‘essential public services’. What many aren’t happy about is funding (i) the non-essential public services, (ii) the waste even in those ‘essential’ services and/or (iii) the sort of social engineering for which the tax system is so often a tool.
These are largely subjective positions, but one could make a fairly safe bet that among the self-righteous mob now castigating tax avoidance, are a few who object to their taxes going towards Trident or, previously, the Iraq War. No doubt some of them would consider, if they weren’t on PAYE or the dole, withholding some of their taxes on these grounds – how many of today’s tax crusaders were among those refusing to pay their poll tax in the ‘90s?
Let’s go further though: could tax avoidance even be positively moral? If the essential public services – state health cover, policing, etc. – really do help to keep a civilised society on an even keel, then a state that only spends what it absolutely needs to, and takes only what it must as a last resort – thus keeping the support of the population which it should be serving – must be a key ingredient for maintaining such a society. If tax avoidance is a part of achieving that goal, either through individuals minimising the negative impact of taxation or by forcing government to constantly review the real burden of tax – then is that not moral also?
* Actually, that’s not entirely accurate – the BBC presenter would just keep his or her head down and mumble some platitude about everything being perfectly legal – that old neo-liberal loophole!