Thursday, 21 June 2012

Birth, death and taxes

The chapter on tax rebellion in my forthcoming Resistance and Rebellion in the British Empire, 1600-1980,  begins in the following way:

‘In late 1789, Benjamin Franklin wrote:

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes. [1]

….From when taxes were first levied, people have found ways to evade paying for reasons that have been honourable, ideological, greedy and selfish. People have evaded taxes illegally, some have resisted paying taxes and others have simply refused. Taxation is almost by definition unfair. It is imposed on people by government generally without consultation and is frequently used to pay for things of which people do not approve or do not need. Getting the level of taxation in society right, or at least politically acceptable, has always been a problem for government. If the level of taxation is set too low then it may have insufficient funds to rule effectively with the likelihood of the same consequences as setting taxes too high; anger, discontent and even resistance. ‘

How many of us if asked whether we would like to pay less tax would say no!  How many of us if asked whether we would like to pay less tax in a scheme recognised by HMRC would say no!  Most of us of course have no option but to pay our taxes since we cannot afford the fees paid by tax revenue experts who know the vagaries of taxation law to do this.  But given the option, most of us would and it’s hypocritical to say we wouldn’t.  Let us be clear, the amount of tax we pay is a legal question and if we use taxation law to avoid paying taxation that is legally acceptable.  But is it morally acceptable or more accurately should taxation be subject to moral as well as legal rules?  The past few years have seen the growth of moral pressure on individuals and institutions to ensure that they do not have unacceptably high levels of income or pay their ‘right’ level of taxation.  Should we, as a society, ensure that people do not have unacceptably high incomes or avoid paying tax?  Certainly.  If so, how should we do this?  Well not by moral pressure since it ensure that individuals and institutions are effectively shamed into earning less or paying more taxes.  Moral pressure is arbitrary, generally ill-defined if defined at all and resembled the charivaris of the past, its scapegoats individuals and institutions.   It makes good headlines in the media but does not address the real issue: if the law allows me to avoid paying tax or to earn exorbitant sums of money why should I not do so?  If you don’t like taxation law as it stands, change the taxation law and stop whingeing when individuals and institutions act within the rules to pay less tax.  We’d all do it given the opportunity. 


[1] Franklin to Jean-Baptiste Leroy, 13 November 1789, Sparks, Jared, The Works of Benjamin Franklin, with Notes and a Life of the Author, 10 Vols. (Hilliard, Gray and Company), 1836-1840, Vol. 10, pp. 409-410. Daniel Defoe was the first author to use words to this effect in The Political History of the Devil, (T. Warner), 1726, p. 246, ‘Things as certain as death and taxes, can be more firmly believed.’


lalaslist said...

Good morning Richard.

I can see that you are hot to trot this morning about the Jimmy Carr tax story. I am not sure that I fully agree that people wouldn't be prepared to pay more tax if asked. I believe they would if they were able to see how their money is used, can opt out of expenditure they do not wish to support, and how effectively tax money is spent. There have been moves by the Coalition government with Open Data sharing to provide us with more of this information, a policy that was begun under Labour and which to some extent the technology itself is accelerating. The truth is, most people are not that interested; they say they are but when it comes to drilling down into the data most people can't be bothered. Certainly in the Scandinavian countries, and in Germany, taxation is higher but their emphasis is on how we should all see ourselves as playing a part in the society that we wish to have and maintain: good, fair, socially mobile. Which I suppose is where the 'Big Society' idea comes from albeit in a bifurcated mode. I know people who have trust funds in tax havens. Personally, I don't approve and I find it hard to share the same room when we occasionally do. It's shameless greed. I approve of what Bill and Melinda Gates, for instance, are doing with their staggeringly large wealth. This is capitalism when it can work for the greater good. Titus Salt and many of the Quaker family fortunes were used in a similar way. Getting to the top doesn't necessarily mean keeping others down. These schemes are designed right from the outset to do that. So, I have little sympathy for Mr Carr, whose comedic talents are pretty awful anyway as he has built his career by smirking at others and being 'ironic' (usually an excuse for cruel jibes), and is now trying to salvage his reputation by feigning ignorance of what such schemes are designed to do. he may have given to charitible causes as some of his comedy pals are now saying. He would do better to payb his tax bill and still give to charity, like many of us do.

Richard Brown said...

It was Eistein who once wrote that you don't need to be a mathematician to fill in a tax form but a philosopher. Now he may well be right but there are major problems with giving taxation a moral slant. Let's say, for instance, that I have a moral objection to Britain having nuclear weapons and refuse to pay that part of my tax bill allocated to funding them. I would have no defence in law for this refusal even if I strenously argued the moral case against nuclear weapons. A court would find that in refusing to pay part of my tax bill I was breaking the tax rules and would rule accordingly. The moral argument would carry no sway. But for politicians it appears to be, you pay your taxes and I'll rouse moral indignation if you don't or at leat don't pay what the politician thinks you ought to pay.