A week or so ago, I commented on AccManPro that I disagreed with pretty much everything that appears on the taxresearch.org.uk blog. One of the commenters there asked me to expand on this and to explain why I thought the ideas being discussed were wrong. I sense that I was being baited but what the heck....
I was going to write a long piece on the ideas behind "tax justice" and the silliness intrinsic in it. However, I found it getting unnecessarily wordy so I thought I'd highlight examples instead:
1) The primary fallacy seems to be the tendency to start from the perspective that your money is the state's - and that you should be allowed to keep what is left after the state has taken what it wants. This perspective is then used to argue that arranging one's affairs to reduce tax liabilities is somehow "taking" money from others. To see why they can think this, you must put yourself in their heads. They start with the assumption that the £100 you just earned is the state's. If you pay 41% tax on it, you're allowed to keep £59 of it - they'll give you the £59, in other words. However, if you find a way to make the tax liability 40%, say, then the state would have to give you £60 back. You've just been given an extra £1. And here's where it gets screwy... they seem to be claiming that this £1 has been funded by somebody else. Yes. That truly does seem to be the thought process. The idea that the original £100 was yours to start with seems completely to escape them. Bizarre.
2) The headline on this piece on a different website related to tax justice shows the "interesting" level of economic literacy prevalent in this field. There seems to be a belief that poverty is "caused" and that, naturally, it is somebody's fault. Sorry, folks. Poverty is not "caused". It is the natural state of humanity. The story of the last five hundred years has been our discovery of how to escape it by creating wealth for ourselves and for others. It is clearly true that many, many people are doing a lot less well than we would like. However, any analysis that starts with the assertion that this is somebody else's fault is not going to lead to anything sensible.
3) Anybody who disagrees with the tax justice crowd is "greedy". See this comment to somebody upset by the impact of inheritance tax. One can argue about the merits of inheritance tax or explain why one believes a tax paid only by the stupid and the unlucky is morally justifiable but note that this isn't what happens. Instead, the ad hominem is deployed. Lovely.
I should point out that I am sure the tax justice crowd are well-meaning, pleasant people. Indeed, I am sure I could spend an enjoyable evening in the company of such people (and I am sufficiently polite in person that I'm sure they could tolerate me!). However, I don't think they would manage to persuade me that this movement is one to which I should subscribe.
I notice that Tim Worstall also sometimes links to taxresearch to take issue with them. Well worth reading.
[EDIT 2007-09-02 19:08 Corrected typo and added link to Tim Worstall]
[UPDATE 2007-09-03 17:23 Richard Murphy has responded. http://www.taxresearch.org.uk/Blog/2007/09/03/tax-justice-2/ ]
4 comments:
I actually do believe that money is a function of group effort, and that individual wealth has no meaning except as part of a whole. Without the context provide you by the laws and support of those around you, you couldn't own anything (unless you also happened to be the strongest). By this view, there is a sense that "your" money is granted to you by society.
The other aspect is that if you benefit willing from the context a society grants you, you are under a moral obligation to contribute back to it. It's like not killing your host, or not biting the hand that feeds you. It's like giving a tip, or paying your bus fares in a country that uses an honour system (notably not the UK, which compared to most European countries uses the honour system for very few things).
This is the very same principle that Socrates was prepared to drink hemlock for. Even though the state had made a stupid decision, he had benefitted so long, so thoroughly and so willingly from its laws, he was not prepared to flee into exile and say that the laws applied to him only when he felt like it.
To live in this country, deliberately avoid tax and be morally consistent you should not accept any help the state offers you at any time - pay for your own education, transport, insurance, health care, donate a quantity to your representative (whether you agree with him or not) sufficient that it should pay his wage if others did the same, donate to the police service and army.
If you can't bring yourself to do this, then by all means lobby your representatives to reduce tax and state spending, but don't deny that there is an obligation to pay what the state demands of you fairly.
kyb, thanks for the comment.
I think you're conflating a few concepts.
I guess we can break them down into several broad areas:
* "Money" is merely a useful invention. What we're really saying is that if somebody values something that I have (or can do) more than I value that thing (or my time), wealth is created if we make an exchange. The only thing a "state" is required for here is enforcement of property rights and ancillary stuff (extending, ultimately, to defence I guess). To the extent that a "referee" is required, I don't think many people would disagree with the need for *some* taxation and *some* state. From this perspective, there is no need to invoke this vague notion of being "granted" what one has by "society". (And let's remember that "society" is not the same as the "state").
* On your point about not taking any of the state's services, I think you're being a little circular. If an organisation, which is backed by threat of violence, tells me that they will start providing a service (of typically appalling quality) at a price they choose, which I have no choice but to pay for and which is given a monopoly, I don't think it is unreasonable of me to object. As you say, I am compelled to pay whatever price is asked but it doesn't mean I have to like it, it doesn't mean I have to support it and it certainly doesn't mean I have a duty to ignore legal options to limit my exposure to such extortion. It is regrettable, however, that I have, to date, made no efforts to plan for tax or to take up opportunities to minimise my exposure. I suppose I should put my money where my mouth is and start doing so (e.g. by claiming deductions I'm entitled too, etc).
I'll ignore your first point because you're right, I wasn't being very specific - I was claiming that without a society context there is no wealth, so society has some claim on your wealth. You're quite right to say that the society context is not the same as the government.
You agree that there needs to be some referee charging some tax. First of all, there are bound to be disagreements about the extent of that referees function, and to be effective it needs to be able to enforce the rules even on those who disagree with them. The only way I can see round this otherwise impossible problem is if we all agree to accept the governments function based on the wishes of the majority.
Assuming a decent level of freedom of movement, we can expect the market place to cope with many different referees and select the most efficient one, because the referee people would prefer to live under will have a large number of people move there.
Minimising your exposure to tax under the rules the government lay down has no moral problems. What I consider morally problematic is avoiding taxation (e.g. through moving money but not yourself offshore) while still using the services.
I genuinely think that if you strongly disbelieve in a government service, you should do your best not to use it, and when you do, make a donation. There are actually very few governmental services that have a monopoly these days, and certainly the only way to build up an alternative to the level where it becomes obvious we don't need the government service is to use the nongovernment one whenever you can.
"Minimising your exposure to tax under the rules the government lay down has no moral problems. What I consider morally problematic is avoiding taxation (e.g. through moving money but not yourself offshore) while still using the services."
I thought you were still liable in that situation? i.e. when you bring the money back, any gain is taxed?
"I genuinely think that if you strongly disbelieve in a government service, you should do your best not to use it, and when you do, make a donation. There are actually very few governmental services that have a monopoly these days, and certainly the only way to build up an alternative to the level where it becomes obvious we don't need the government service is to use the nongovernment one whenever you can."
I think you're missing the fundamental illiberalism inherent in such a position. One is forced to pay for (subsidies to) the Post Office, for the state education system and for the NHS whether you use it or not. As you correctly say, we are free to use alternate provision if we choose but, if we do, we are still forced to pay for the inferior, substandard state-provided alternative.
A win-win situation would be for state services that are not natural monopolies to have to *compete* for funding. If a parent could take the notional primary-school funding amount and use it to purchase education elsewhere, two things would happen: poor children (whose parents cannot afford to pay twice) would get a far better education and any substandard state schools would improve rapidly.
I'm not sure your "put your money where your mouth is" argument (i.e. if you don't like it don't use it) really works: not using a service you've already paid for is often difficult.
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