By Liam Gill
The past view weeks, the Panama Papers have been slowly claiming victims across the globe. From the Pakistani Prime Minster Nawaz Sharif to the Chinese President Xi Jinping, Russian President Vladimir Putin and British Prime Minister David Cameron numerous world leaders have had to defend their personal investment decisions. To be clear, for those following the debate in the media, while some individuals have been accused of tax evasion, Prime Minster David Cameron is simply being accused of tax avoidance. To draw the distinction, tax evasion is the failure to pay your taxes, which is illegal; tax avoidance on the contrary is conducting legal business in manner, which minimizes the taxes paid by individuals or corporations.
Last week, John McTernan wrote an interesting article in the Daily Telegraph on the morality of tax avoidance. To summarize, his argument was that nobody rich or poor enjoys paying tax. He uses examples of numerous governments being voted out after increasing taxes or losing elections following a promise of tax increases. His stance is that tax avoidance is not immoral instead it is an expression of our freedoms as British citizens. Joseph Costello, who by his own admission lacks the intellectual capacity to comprehend how tax avoidance can be an expression of British freedoms, savagely attacked this philosophical argument in Palatinate on Tuesday. Unfortunately, I have exams to study for and a few hundred words would be insufficient to supplement a couple years of education but I will do my best to explain how tax avoidance is an expression of British freedoms.
Fundamentally, Britain is a libertarian state. While it may not appear to be the case; this nation has been founded upon libertarian principles. This is why unlike other European countries; you cannot be prosecuted for an omission in the criminal law. If a homeless man was to ask me for food and I refused, I won’t be liable for homicide when he dies from starvation 3 hours later. One should only be liable for actions, which have been criminalized by Parliament or the courts. Tax avoidance follows the same principle, just because someone on unemployment could use my money doesn’t mean I should simply give it away. If I am not legally required to pay additional taxes there is no moral wrong in avoiding such taxes.
Economically, we are a capitalist society this means that everyone in the country does (or at least should) strive to collect as much capital as they wish. Costello argues that the problem with tax avoidance is that it’s an expression of self-interest. While to the uneducated that may seem horrific, anyone who has studied economics, philosophy, sociology, psychology, law or any social science for half a day can explain that self-interest in the basis of a capitalist society. Adam Smith the father of modern economics stated “It is not from benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their own regard to their own interest.” Famed Economist Alan Greenspan also stated that, “Capitalism is based on self-interest and self-esteem”. In fact I haven’t heard an economic argument condemning individuals acting in their self-interest since 2013 when I was reading The Communist Manifesto.
Overall, the argument that tax avoidance is an expression of British freedoms is convincing. Just as millions of people put their money in Individual Savings Accounts each year to avoid paying Capital Gains or Income tax. Others decide to invest their funds legally in other nations such as Ireland to minimize the burden of taxes on their families.
Thus far unlike Costello’s inappropriate childish attacks on McTernan, I’ve convincingly and competently explained how economic and philosophical theory support McTernan’s article. However just in case this article is beyond Costello’s ridiculously low intellectual capacity (you really shouldn’t have proclaimed your stupidity), I would like to conclude by stating that your argument is moronic. Simply saying that this country needs money does not present a valid counter argument to the morality of tax avoidance. I need money, does that mean it’s morally wrong for you not to give me some? You don’t legally have to but according to your article it’s incomprehensible why you shouldn’t money to someone in need. Tax avoidance is an expression of British freedoms; it is an example of our nations libertarian foundations and its capitalist economy. Without the basic freedom to make my own financial decisions, I might as well move to North Korea and allow the government to organize my money as it wishes.
I hope that this article can be used to explain how tax avoidance is an expression of British freedoms. The same freedoms that were used to build this nation can be used to justify tax avoidance. While you may not morally agree with tax avoidance one must recognize that this is not a nation, which was built with the intention of assuring everyone got participation medals. Capitalism is survival of the fittest; individuals do whatever they can within the law to succeed. The same companies you criticize for tax avoidance would need to raise prices to accommodate for extra taxes. Its time that Costello and others stop trying to attack the morality of the world. We live in a fucked up place. We all know it. Instead of whining, complaining and criticizing those who succeed, try using the same rules, laws, rights and freedoms that they did and find yourself some success.
Photograph by Dennis Tang via Flickr