Ship of Fools: Tax Avoidance is a Sin

Thread: Tax Avoidance is a Sin Board: Oblivion / Ship of Fools.

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Posted by Crœsos (# 238) on :

. . . according to Archbishop of York John Sentamu.

quote:
Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

Those not paying their full tax liabilities were "not only robbing the poor of what they could be getting, they are actually robbing God, because God says 'bring into my store house all the tithes'".

"So if God has told us to be just, to walk humbly and to be merciful and then we behave in a very strange way - God is being robbed, the world is being robbed, your neighbour is being robbed."

Note that Archbishop Sentamu is talking about tax avoidance, which is structuring your assets and expenses in perfectly legal ways to minimize your tax burden, not tax evasion, which is not paying taxes you legitimately owe. In some of the more extreme cases tax avoidance can take the form of lobbying the state to change the tax code in ways advantageous to your particular financial situation.

So, if taking advantage of tax law to minimize your taxes owed is immoral and sinful (though legal), isn't Sentamu essentially arguing against all the tax breaks that are traditionally given to churches? The Church of England, for instance, has an operating budget of £1 billion, another £4.4 billion in investment assets (as of 2008), and a huge real estate portfolio, all of which receives tax breaks unimaginable to Google, Amazon, or any of the other corporate entities being criticized by the Archbishop. Doesn't consistency require the Church of England to forgo these tax avoidance schemes if it's going to decry their use by others?

Posted by Gwai (# 11076) on :

See, that makes absolutely no sense to me. Christ never said we had to donate money to the government, and it seems to me that choosing not to avoid paying extra money is another way of saying choosing to pay more than you have to.

Posted by South Coast Kevin (# 16130) on :

I think you're right, Crœsos. I said so on Facebook the other day and am now in the middle of a lengthy exchange with a Christian friend who agrees with the Bishop!

Corporations should follow the law but otherwise seek to maximise their profits IMO. That's simply the role of corporations. There are other structure of organisation (in the UK, for example, you have charitable company, industrial and provident society, charitable incorporated organisation etc.) for those wish to set up an organisation that's not primarily about making money.

Posted by Jade Constable (# 17175) on :

Of course tax avoidance is a sin - it is a way of loving money above loving God and one's neighbour that ensures that the rich get richer, and the poor get poorer. And if the CoE is participating in this, then yes, that is committing sin. ++Sentamu might be hypocritical in saying this, but plenty of other people say it too (SCM for instance and the organisations we work with such as Church Action on Poverty) and are not hypocritical in saying so. Perhaps the bishop's stance might lead him to change things for the better within the CoE!

Posted by Emily Windsor-Cragg (# 17687) on :

THE SIN is being UNAWARE of the difference between Holy Law (Mosaic Law, 1689 Bill of Rights, English Common Law) VERSUS Corporate Statutes, ROMAN LAW (favoring Elites) and the Uniform commercial Code that derives from Laws of the Sea and Admiralty.

If you don't get THAT, you don't understand the predicament we the English-speaking peoples subject to Commercial Laws MUST ENDURE under the present Not-See Fascist regime.

In the United States of America CORPORATION, in the Uniform Commercial Code or Corporate Statutes--there IS NO LAW that mandates individual income tax liability. Period. It is absolutely voluntary.

IRS taxes only apply to citizens working outside the US or for foreign companies within the US.

Anybody stupid enough to file ... well, they get what their ignorance purchases.

EEWC

quote:
Originally posted by Crœsos:
[qb] . . . according to Archbishop of York John Sentamu.

[QUOTE]Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

Those not paying their full tax liabilities were "not only robbing the poor of what they could be getting, they are actually robbing God, because God says 'bring into my store house all the tithes'".

"So if God has told us to be just, to walk humbly and to be merciful and then we behave in a very strange way - God is being robbed, the world is being robbed, your neighbour is being robbed."

Note that Archbishop Sentamu is talking about tax avoidance, which is structuring your

[ 20. June 2013, 22:33: Message edited by: Emily Windsor-Cragg ]

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Gwai:
See, that makes absolutely no sense to me. Christ never said we had to donate money to the government, and it seems to me that choosing not to avoid paying extra money is another way of saying choosing to pay more than you have to.

I think, morally, one can differentiate between taking straightforward advantage of a tax exemption and constructing some artificial structure to sneak through a loophole.

In the case of charities, for example, governments have decided that people should be able to donate to charity from gross income. (Gift aid in the UK, deductions in the US, ...) Taking advantage of that is morally straight. Similarly, there is no moral issue with taking advantage of the significant tax incentives that governments offer in order to attract movie production, for example.

Setting up a holding company in, say, a Caribbean tax haven, which "owns" your company's intellectual property, and licenses it to individual per-country sub-companies at an essentially arbitrary rate in order to migrate profits out of a high-tax jurisdiction in to a low tax jurisdiction, is not exactly playing with a straight bat.

Posted by South Coast Kevin (# 16130) on :

quote:
Originally posted by Leorning Cniht:
Setting up a holding company in, say, a Caribbean tax haven, which "owns" your company's intellectual property, and licenses it to individual per-country sub-companies at an essentially arbitrary rate in order to migrate profits out of a high-tax jurisdiction in to a low tax jurisdiction, is not exactly playing with a straight bat.

I understand what you're saying, but if schemes like this are available and clearly legal, then why ought not a company set up its affairs to take advantage of such schemes? If any particular government decides it doesn't intend the tax system to operate like this, then make it illegal or (if that's not possible) give tax breaks to companies not using such schemes. Even in today's global economies, can individual governments really not take action against such tax-avoiding schemes?

Also, individuals are perfectly within their rights to decide whether they want to shop, invest or otherwise interact with organisations avoiding tax in these 'not exactly playing with a straight bat' ways. I've got no problem at all with consumer or investor boycotts; just with accusations of corporate immorality and the like, when companies are simply following the law.

Posted by angelfish (# 8884) on :

As an ex tax lawyer I have both helped clients take advantage of the tax breaks that are anticipated by and built into the legislation, and created elaborate structures that exploit loopholes and result in less tax being paid than otherwise would have been the case.

The problem legislators face is defining the point at which one becomes the other. On the coal face, it is perfectly clear in each case which is morally legit and which isn't but it is so hard to come up with generalisations. I took no pleasure, other than intellectual stimulation, in devising the complex schemes that saved millions in taxes. But "does angelfish feel comfortable with this?" has not yet been adopted by HMRC as a test for whether a scheme is moral or not.

I agree with Sentamu, but I think that there is a more important question underlying all of this, which is about our relationship with our money, other people's money and so on. I don't think "render unto Caesar" was intended by Jesus to be a moral imperative. Wasn't he just saying that money isn't important and we shouldn't waste time and energy worrying about it? If the government wants it, let them have it, your Father in heaven knows your needs so you don't have to cling to wealth.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by South Coast Kevin:
just with accusations of corporate immorality and the like, when companies are simply following the law.

Do you not see a difference between what is moral and what is legal? ++John isn't accusing these companies of acting illegally - he is accusing them of acting immorally.

Angelfish describes some of the practical difficulties with constructing a watertight tax code. In particular, addressing the issues involved with "creative accounting" by large multinationals probably requires re-negotiating tax treaties, rather than having one individual government make unilateral changes.

[ 20. June 2013, 23:07: Message edited by: Leorning Cniht ]

Posted by Emily Windsor-Cragg (# 17687) on :

quote:
Originally posted by Leorning Cniht:
Do you not see a difference between what is moral and what is legal? ++John isn't accusing these companies of acting illegally - he is accusing them of acting immorally.

Angelfish describes some of the practical difficulties with constructing a watertight tax code. In particular, addressing the issues involved with "creative accounting" by large multinationals probably requires re-negotiating tax treaties, rather than having one individual government make unilateral changes. [/QB]

Bingo! This is the difference between English Common Law which legislates against harm, deceit, cost & waste versus Roman Law, which favorites Elites over the working classes.

Anyone not aware of the fact that corporations operate their [Roman-Admiralty Law] scams WITH IMPUNITY under the "United Kingdom Corporation" rubric these days is not looking at the world through clear eye-sights.

EEWC

Posted by Karl: Liberal Backslider (# 76) on :

I thought so - you do subscribe to that 'Freeman on the Land' mumbo-jumbo, don't you?

Posted by Emily Windsor-Cragg (# 17687) on :

You betcher BIPPY, I do! ... up to a point.

When people start FOULING THEIR OWN NEST,

it's time to throw them out.

And Common Laws against harm, deceit, cost and waste ... are the way to throw them out.

It seems to me, it's WAY PAST TIME to throw the Rothschilds out of British banking due to their policy and practices of USURY, HARM AND WASTE ... to the British public.

Would you agree?

EEWC

[ 20. June 2013, 23:37: Message edited by: Emily Windsor-Cragg ]

Posted by Karl: Liberal Backslider (# 76) on :

Well you're not going to throw out bugger all with pseudo-legal gobbledegook that's been laughed out of court on any number of occasions.

Posted by Emily Windsor-Cragg (# 17687) on :

So, let's throw out the Courts too. They're knee deep in nepotism, aren't they? Influence-peddling?

I should have said, Usury, Harm and DECEIT! That's what the banking system is into!

Never mind--PERSON-TO-PERSON trade, barter or sharing. It's all just a GAME to those predators!

EEWC

[ 20. June 2013, 23:41: Message edited by: Emily Windsor-Cragg ]

Posted by Demas (# 24) on :

Caesar doesn't own all my money, only that amount which by law I am required to hand over. Which I do.

If, by only paying to Caesar what I am legally obliged to pay and no more, I am robbing the poor of what they would be getting then I am also robbing soldiers of guns and nuclear weapons, robbing bankers of bailouts and spies of surveillance equipment.

Posted by Sober Preacher's Kid (# 12699) on :

Emily Windsor Cragg:

Aside from the Freeman on the Land bit, I have applied for a job in Montreal, Quebec, Canada. If I am successful (from this keyboard to God's monitor!) I would move to Montreal. Quebec uses its own Civil Code, derived from the Custom of Paris and Roman Law. It is NOT English Common Law.

The British authorities re-established French law in Quebec in 1774, in fact it was the very common French folk who wanted it rather than the English elites.

Please recognize that you're very near to being ignorant and insulting, dear.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Jade Constable:
Of course tax avoidance is a sin - it is a way of loving money above loving God and one's neighbour that ensures that the rich get richer, and the poor get poorer. And if the CoE is participating in this, then yes, that is committing sin.

spot on. Government revenues are, in fact, a zero sum game. If you "avoid" taxes, either someone else must pay more (potentially someone poorer than you) or some government services must be cut (again, most likely services that benefit the poor).

Here in the US, American evangelicals seem to have it quite the reverse-- it's as if we had an ethical responsibility to find every loophole to pay as little taxes as possible, and to advocate politically for the lowest taxes possible-- not for the poor, but for everyone-- particularly the rich. That inevitably leaves the poor much, much worse off. And yet I find myself more often than not playing the game-- it seems somehow to be burnt into our DNA. Perhaps something to do with that long-ago tea party.

[ 21. June 2013, 01:20: Message edited by: cliffdweller ]

Posted by mousethief (# 953) on :

quote:
Originally posted by cliffdweller:
Perhaps something to do with that long-ago tea party.

Or the even-longer-ago apple cider party.

Posted by no prophet (# 15560) on :

Probly to understand what is right and wrong about taxes and paying/not paying/avoiding would require a Talmud of explication?

If you straightforwardly don't declare income so that the gov't cannot tax it is the easy one. It gets complicated like these examples.

1. In Canada, you have the ability to decide how much to pay yourself as salary as a self employed person, and how much to keep within one or more or your companies. You can also decide to pay some funds to yourself as dividends and can also split income as salary or faux-company office fees to family members (or anyone else). Tax avoidance possibly? But it is playing by Caesar's rules. I do this.

2. If you board member of a major corporation, you
talk to your political friends, give money to their campaigns, talk to them about what board and management committees they might be appointed to once they leave office. You then "encourage" the politicians to pass laws to:

(a) give generally lower corporate tax rates to all major corps (we might reasonably ask if lowering the 75%+ corp tax rates to rates of abut 15% between the 1970s and today is a sin.)

(b) allow you to declare losses from one part of your operation or a subsidiary company against the profits in another

(c) give tax breaks to your industry, perhaps in the form of input tax credits

(d) forgiveness of taxes if you "create" jobs (always check the duration the jobs have to exist)

(e) laws that allow you to transfer your profits to a shell company, in say Ireland (you can turn up the company's name if you didn't hear about that).

(f) deduct the costs from income of sponsoring things like names of sports arenas, hospital wings, charities and charitable events in general. (This last one lets the companies dictate social policy because they decide what the public will get, in our case currently, an unneeded hospital instead of program funding for community health. And it becomes difficult to have an opinion other than positive, say uranium mining, fracking and oil from tar sands, if the school gym and band program are sponsored by them.)

Bottom line:
I guess I would say that tax avoidance is maybe only a sin for the individual tax payer in the view of the bishop. God obviously understands business and lets God-fearing and atheistic business types work with politicians to pass laws that allow them to decide what Caesar is due, which makes it all just great.

[ 21. June 2013, 01:56: Message edited by: no prophet ]

Posted by Emily Windsor-Cragg (# 17687) on :

If you wish to live by Roman Law, go for it.

I'll pass, and I'm not intending to be insulting at all.

Each of us chooses our poison.

EEWC

quote:
Originally posted by Sober Preacher's Kid:
Emily Windsor Cragg:

Aside from the Freeman on the Land bit, I have applied for a job in Montreal, Quebec, Canada. If I am successful (from this keyboard to God's monitor!) I would move to Montreal. Quebec uses its own Civil Code, derived from the Custom of Paris and Roman Law. It is NOT English Common Law.

The British authorities re-established French law in Quebec in 1774, in fact it was the very common French folk who wanted it rather than the English elites.

Please recognize that you're very near to being ignorant and insulting, dear.

Posted by Gwai (# 11076) on :

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by Gwai:
See, that makes absolutely no sense to me. Christ never said we had to donate money to the government, and it seems to me that choosing not to avoid paying extra money is another way of saying choosing to pay more than you have to.
I think, morally, one can differentiate between taking straightforward advantage of a tax exemption and constructing some artificial structure to sneak through a loophole.

Fair enough. I accept that I'm probably overthinking it. It seems probable that generally people know when they are using the laws to avoid taxes in ways that the lawmakers did not intend.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by no prophet:
I guess I would say that tax avoidance is maybe only a sin for the individual tax payer in the view of the bishop.

Which doesn't match the article in the OP

quote:
the Archbishop of York, told the BBC that individuals and companies needed to be held accountable for their actions when it came to tax.

quote:
Tax avoidance was hindering efforts to tackle hunger and malnutrition in developing countries, he suggested.

And, the is entirely consistent with recent campaigns by Christian Aid and other organisations. Where the main concern was multinational corporations with interests in developing nations who make vast profits, yet pay virtually no tax in the poor countries which are the foundation for many of those profits. Examples could be mineral exploitation companies that run mines in developing countries (often with very minimal controls to ensure the safety and health of their workers and the environment) paying those mines a pittance for their raw materials so they run at very small profits (hence pay a pittance in local taxes) while making their profits in a low-tax country where they simply trade those resources - often countries where the taxes pay for the services provided for the managing directors of these companies. It would be morally a far better situation if the tax paid was paid in the countries where the resources were mined, even if the total tax burden wasn't increased.

If the CofE is making a profit, then certainly it should be paying tax in the UK. Clergy (and other staff of churches) pay income tax on their stipend, the same as any other employee. I don't think the CofE is any different from any other organisation that makes no profit, since corporation taxes only get paid on profit.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Demas:
If, by only paying to Caesar what I am legally obliged to pay and no more, I am robbing the poor of what they would be getting then I am also robbing soldiers of guns and nuclear weapons, robbing bankers of bailouts and spies of surveillance equipment.

Certainly the UK has provided a system that allows you to take the decision of who to support out of their hands. In the UK, we can make direct payments to charities of our choice, and the charities get the tax we paid on that income. I can, if I wanted, pay enough to charities of my choice that the government gets zero tax. That would, of course, leave me not very much to live on ... but, would guarantee that my tax pounds were not being spent on guns and bombs.

Posted by the giant cheeseburger (# 10942) on :

quote:
Originally posted by Alan Cresswell:
If the CofE is making a profit, then certainly it should be paying tax in the UK. Clergy (and other staff of churches) pay income tax on their stipend, the same as any other employee. I don't think the CofE is any different from any other organisation that makes no profit, since corporation taxes only get paid on profit.

Do clergy pay tax on their income in the CofE? I thought that retaining the legal fiction of it being a stipend paid to enable them to not have some other job was exclusively for the purpose of getting around taxation law.

And then there's the question of the church and annual taxes on property value, which typically pay for local services such as maintaining roads and providing subsidised public housing for the lower class. My guess is that the CofE has a very substantial advantage in this respect compared to "any other organisation," and this is to the detriment of the local communities which the churches are supposed to serve - you can't use the "I don't want to pay for Trident" excuse with local government taxes. Do they pay their property taxes or are they squatting in the local communities?

Posted by ExclamationMark (# 14715) on :

quote:
Originally posted by the giant cheeseburger:
[QUOTE]Do clergy pay tax on their income in the CofE? I thought that retaining the legal fiction of it being a stipend paid to enable them to not have some other job was exclusively for the purpose of getting around taxation law.

And then there's the question of the church and annual taxes on property value, which typically pay for local services such as maintaining roads and providing subsidised public housing for the lower class. My guess is that the CofE has a very substantial advantage in this respect compared to "any other organisation," and this is to the detriment of the local communities which the churches are supposed to serve - you can't use the "I don't want to pay for Trident" excuse with local government taxes. Do they pay their property taxes or are they squatting in the local communities?

All clergy in the uk pay tax on their income unless that income is less than the personal allowance (currently £9440 for 2013/14).

Churches don't pay business rates or council tax on their church premises. They do pay utility bills for water, gas, power etc.

Churches do pay the local taxes on any houses provided for clergy.

The reason for the "stipend" is that in the uk clergy are technically office holders (Trustees) and not employees (they are classed as employed by God). The idea of a stipend is that it was designed to give clergy sufficient money (a basic minimal amount) to live on, to enable them to focus on ministry without having to work in another way to get money to live on.

There are, admittedly, som tax breaks in being a clergyperson. Some expenses can be offset against income; you get your milegae and expenses paid when on church business; in a lot of cases you get a house where you only pay fpor light and heat. (The latter point is arguable for soem who find that living in soemone else's house - the church's- isn't an easy task).

The down side is that in the UK clergy are, to all intents and purposes, excluded from employment law. Terms and conditions CAN be bad and sometimes intolerable. Hours of "work" are some of the longest in any sphere (who else has just one day poff a week these days?) and clergy are excluded from the European working hours directive. Bullying and misuse of power goes on at levels which would lead to instant legal action in any other place of work and in soem denominations you can be dismissed from post pretty instantly without any redress whatsoever.

Posted by South Coast Kevin (# 16130) on :

quote:
Originally posted by ExclamationMark:
The down side is that in the UK clergy are, to all intents and purposes, excluded from employment law. Terms and conditions CAN be bad and sometimes intolerable. Hours of "work" are some of the longest in any sphere (who else has just one day poff a week these days?) and clergy are excluded from the European working hours directive. Bullying and misuse of power goes on at levels which would lead to instant legal action in any other place of work and in soem denominations you can be dismissed from post pretty instantly without any redress whatsoever.

Presumably the C of E (and any other faith groups that do the same thing) feel this approach to be within the intentions of the law. Despite the fact that, as ExclamationMark says, it enables them to avoid much of the law around employment.

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by South Coast Kevin:
just with accusations of corporate immorality and the like, when companies are simply following the law.
Do you not see a difference between what is moral and what is legal? ++John isn't accusing these companies of acting illegally - he is accusing them of acting immorally.

I do realise a lot of the work to close tax loopholes cannot be done by single governments acting on their own. It's a complex area. But still, describing companies that use clearly legal measures to reduce tax as 'immoral' doesn't feel right to me.

If a company wants to make a play for the moral high ground and takes an approach of keeping its affairs simple, so as not to avoid tax that other companies might avoid, then great, let them. And let customers do business with them in preference to other, tax-avoiding, companies. But I wouldn't describe the former company as more moral than the latter.

Posted by Enoch (# 14322) on :

quote:
Originally posted by the giant cheeseburger:
Do clergy pay tax on their income in the CofE?

Yes. Of course they do. Isn't that the case everywhere?

quote:
I thought that retaining the legal fiction of it being a stipend paid to enable them to not have some other job was exclusively for the purpose of getting around taxation law.

No. It has nothing to do with taxation. It does though convey the notion that they are not paid by the hour to do a particular job, which is worth that amount. The theory is that it is called a stipend rather than a wage because it is funding them not to have to earn a living the normal way. So, they can do God's work in stead.

quote:
And then there's the question of the church and annual taxes on property value, which typically pay for local services such as maintaining roads and providing subsidised public housing for the lower class. My guess is that the CofE has a very substantial advantage in this respect compared to "any other organisation," and this is to the detriment of the local communities which the churches are supposed to serve - you can't use the "I don't want to pay for Trident" excuse with local government taxes. Do they pay their property taxes or are they squatting in the local communities?

On rates etc on its plant the CofE is in the same position as any other charity whether religious or secular.

Opinions differ as to whether government, central or local, is a better organisation to decide what your donation money should be spent on than you are. But the logic of what you've just said is that those who are too poor to pay their local taxes should not be allowed to use the roads.

Giant Cheeseburger, you may not appreciate the background to this thread. There's been a great flurry of interest by high-minded worthies recently, in multinationals which choose which jurisdiction to put their European subsidiaries in, wholly or partly for tax reasons. A lot of Anglophone multinationals run their European operations from Dublin because Ireland speaks English and is in the Eurozone. The Irish government has a tax regime designed to welcome them.

If multinational G, say, sells something to a consumer in the UK, it has some leeway as to whether the profit from that sale is in the UK or Ireland. High-minded worthies, including one in particular who chairs a Parliamentary Committee and likes the limelight, think it is a moral issue, that in those circumstances G should pay tax in the UK rather than Ireland. It isn't totally clear whether this is because she thinks it is obviously more virtuous,

- to pay tax to her government rather than the Irish one, because she knows better how to spend the money than the Irish do, or

- to pay tax, plain and simple, because paying taxes is inherently good. The government is more virtuous than you are and always knows best.

She doesn't seem to have noticed the corollary. That is that where UK taxes are lower than foreign ones, a UK company selling stuff in another country should prefer to pay its taxes to the foreign country rather than to her.

When it comes to trading in Third World countries, nobody at the moment, which is surprising, seems to be saying that it is more virtuous to pay taxes in a country where an elite in dark glasses can snaffle the public exchequer. But it is difficult not to conclude that some of them think that.

Posted by Jay-Emm (# 11411) on :

I'm not entirely convinced by the idea that once you get into a company you have to put profits first. For a start consider Schindler, the vile man deliberately hired weak people harming the profits of his company, and gave them far more benefits than he was legally obliged too. In fact driving his company bankrupt*. If on the other hand what he did was remotely justifiable then the argument defending tax avoidance has to be invalid (although it might come up with the right answer).

It also strikes me as although the line may be unclear, there is a clear distinction between taking advantage of tax breaks and mislabelling to take advantage. The problem is proving the distinction enough to prosecute.
The classic offshore routine being a clear case where you can see the value isn't being added where they are declaring it,
But at the same time a company genuinely operating there does deserve the break as it's not getting the benefit of tax paid roads/etc...
Likewise tax breaks for loans makes sense, but making a loan to yourself...requires stretching the word.

*which saves me from one line of argument. I'm not sure if he was sole owner, which does leave another argument exposed.

Posted by IngoB (# 8700) on :

quote:
Originally posted by Crœsos:
So, if taking advantage of tax law to minimize your taxes owed is immoral and sinful (though legal), isn't Sentamu essentially arguing against all the tax breaks that are traditionally given to churches? The Church of England, for instance, has an operating budget of £1 billion, another £4.4 billion in investment assets (as of 2008), and a huge real estate portfolio, all of which receives tax breaks unimaginable to Google, Amazon, or any of the other corporate entities being criticized by the Archbishop. Doesn't consistency require the Church of England to forgo these tax avoidance schemes if it's going to decry their use by others?

AFAIK, the CofE is not a commercial enterprise, it is a registered charity. (Well, I think actually every Parochial Church Council is its own legal entity. But they are all governed by charity laws, so for the sake of simplicity...) You may not care for what that charity does, you may find its wealth unseemly and you may protest the perks it gets from the government. But they are simply playing a different ballgame to Google and other businesses.

Simply put, the aim of the CofE is not to make a (pecuniary) profit for her owners. The aim of Google, amazon, etc. very much is to make as much profit as possible for their owners. So if these businesses use all kinds of trickery to avoid paying taxes, they are de facto taking away from the common good and giving to their owners. Whereas if the CofE is getting tax breaks etc., then this means that a part of the common good (namely that potential tax money) is invested in a different part of the common good (namely the charitable services that the CofE provides to the community). Again, you may wish that less or even no funds would flow from the common good into providing the kind of community services that the CofE offers. Whether this is rational or simply a case of envying others over services that you do not want is a different question. But it simply is not comparable to companies that avoid making a fair contribution to the common good in order to profit a select few owners individually.

(In addition, the comparison fails on the international vs. national perspective. These corporations are in effect pitting different national common goods against each other, in order to maximise their international profits. They are cleverly abusing the lack of a fully formed supra-national common good. The CofE, or indeed the Anglican communion, cannot be accused of such behaviour.)

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Crœsos:
. . . according to Archbishop of York John Sentamu.

quote:
Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

The thing is, Caesar (i.e. government) has chosen to define what belongs to him by means of tax law. Therefore, income that is not taxable for whatever reason is not Caesar's - meaning that even according to Jesus' words there is no moral obligation to pay it to him.

quote:
Those not paying their full tax liabilities were "not only robbing the poor of what they could be getting, they are actually robbing God, because God says 'bring into my store house all the tithes'".

So is the Archbishop saying that taxes are the same as tithing? If so, given that taxes represent far more than 10% of my gross income, am I safe to assume that my obligation to tithe is already taken care of and there is no moral requirement for me to give any more of my income to charity/the church?

Posted by Alan Cresswell (# 31) on :

The tithe was a legal minimum set to support the corporate worship of the nation of Israel. When the Law was given there was no nation state with all the expenses entailed (supporting a judicial system, military etc), and there were other provisions in the Law for support of widows, aliens and others in need.

Jesus had some strong words to say to the Pharisees and others who claimed "I've done what the Law requires of me, I'm OK". He was quite strongly in favour of doing much more than the legal minimum for the sake of others; going an extra mile, giving the shirt off your back when asked for a coat, helping a despised foreigner mugged by the road side ...

Posted by Plique-à-jour (# 17717) on :

quote:
Originally written by the Archbishop of York:

With that in mind, live in hope, free from fear. Embrace every day that God puts before you with confidence.

And if you can buy the Sun seven days a week, even better!

Finding out that former Sun on Sunday columnist John Sentamu disapproves of tax avoidance makes me wish I approved of it.

Posted by South Coast Kevin (# 16130) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Crœsos:
. . . according to Archbishop of York John Sentamu:

Those not paying their full tax liabilities were "not only robbing the poor of what they could be getting, they are actually robbing God, because God says 'bring into my store house all the tithes'".

So is the Archbishop saying that taxes are the same as tithing? If so, given that taxes represent far more than 10% of my gross income, am I safe to assume that my obligation to tithe is already taken care of and there is no moral requirement for me to give any more of my income to charity/the church?

That's a very good question. If Sentamu teaches that Christians should nevertheless tithe, then he's complete trying to have his cake and eat it.

Posted by Crœsos (# 238) on :

quote:
Originally posted by IngoB:
AFAIK, the CofE is not a commercial enterprise, it is a registered charity. (Well, I think actually every Parochial Church Council is its own legal entity. But they are all governed by charity laws, so for the sake of simplicity...) You may not care for what that charity does, you may find its wealth unseemly and you may protest the perks it gets from the government. But they are simply playing a different ballgame to Google and other businesses.

But they're not playing the same ballgame as other charities, either. How many other charities' employees get a tax break on their personal expenses, or can provide housing to employees without it being treated as an in-kind payment? (I actually don't know the answer to this last one. Anyone?) If the CofE is going to complain about those taking advantage of special provisions in the tax code to lower their tax burden, perhaps they should consider removing the beam from their own eye before going after anyone else's mote.

Posted by Plique-à-jour (# 17717) on :

Ah, but don't forget, the CofE doesn't have employees, it has people who do things for it, who it then pays.

Yes.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Alan Cresswell:
Jesus had some strong words to say to the Pharisees and others who claimed "I've done what the Law requires of me, I'm OK". He was quite strongly in favour of doing much more than the legal minimum for the sake of others; going an extra mile, giving the shirt off your back when asked for a coat, helping a despised foreigner mugged by the road side ...

If we follow Jesus' words, then the absolute minimum that any of should be giving is 100%. As not one of us actually gives that amount (and presuming we're not all Hellbound), there must be some amount that's enough to be counted righteous while still having a reasonable amount to spend on ourselves. I assumed that was what the 10% tithe was supposed to define, but maybe not.

Posted by Crœsos (# 238) on :

quote:
Originally posted by Plique-à-jour:
Ah, but don't forget, the CofE doesn't have employees, it has people who do things for it, who it then pays.

Yes.

I believe that was the theory also advanced by American creationist Kent Hovind. All of his supposed "employees" were really volunteers, who were occasionally helped out with gifts or charitable giving that just happened to look like salaries. That didn't go particularly well for him in court.

Posted by Gildas (# 525) on :

quote:
Originally posted by Crœsos:

quote:
Originally posted by IngoB:
AFAIK, the CofE is not a commercial enterprise, it is a registered charity. (Well, I think actually every Parochial Church Council is its own legal entity. But they are all governed by charity laws, so for the sake of simplicity...) You may not care for what that charity does, you may find its wealth unseemly and you may protest the perks it gets from the government. But they are simply playing a different ballgame to Google and other businesses.
But they're not playing the same ballgame as other charities, either. How many other charities' employees get a tax break on their personal expenses, or can provide housing to employees without it being treated as an in-kind payment? (I actually don't know the answer to this last one. Anyone?) If the CofE is going to complain about those taking advantage of special provisions in the tax code to lower their tax burden, perhaps they should consider removing the beam from their own eye before going after anyone else's mote.

If you are self employed you can claim working expenses against tax and if you are obliged to live in a house paid for by your employer as a condition of the job (as the warden of sheltered housing, say) that isn't treated as a taxable benefit. I think the main asset clergy have is that either, we can claim stuff against tax or claim it on expenses and make a prudential decision as to which we think is best, where as self-employed people have to claim it against tax and employed people, if they can't claim it as expenses, have to pony up. But I think that in the great scheme of things that's fairly minor and certainly hardly analogous to companies making a shed load of money in profit and not paying any taxes at all.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Alan Cresswell:
Jesus had some strong words to say to the Pharisees and others who claimed "I've done what the Law requires of me, I'm OK". He was quite strongly in favour of doing much more than the legal minimum for the sake of others; going an extra mile, giving the shirt off your back when asked for a coat, helping a despised foreigner mugged by the road side ...
If we follow Jesus' words, then the absolute minimum that any of should be giving is 100%. As not one of us actually gives that amount (and presuming we're not all Hellbound), there must be some amount that's enough to be counted righteous while still having a reasonable amount to spend on ourselves. I assumed that was what the 10% tithe was supposed to define, but maybe not.

Well, there is a big question as to whether anything is enough for us to be counted righteous.

So, you are right. We cannot give enough to be counted righteous. Whether that giving is in our contributions to the common good administered on our behalf by government, or directly to the poor and needy.

But, we need to examine ourselves. We can easily claim that we're so at fault that we can't possibly address the faults of others. A logical position, and one many have taken. But, that means we stand by and do nothing about injustice perpetrated by others. We don't campaign against racism, because deep down we all know we have a little bigotry. We don't call the police when we see someone being robbed, because we've all taken a pen home from work now and then.

Sometimes it is necessary to take the moral high ground and make a stand against something that is wrong. Albeit, with humility and in full awareness of our imperfections.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Alan Cresswell:
Sometimes it is necessary to take the moral high ground and make a stand against something that is wrong. Albeit, with humility and in full awareness of our imperfections.

I'm not bothered about the Archbishop taking a stand. I'm trying to work out what his words mean in terms of the level of tithing my church demands of me, especially in terms of whether I've been giving more than I have to for the last decade or so.

Posted by angelfish (# 8884) on :

Marvin, if your church is demanding anything of you, it's time to find a different church.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Crœsos:
[qb] . . . according to Archbishop of York John Sentamu.

quote:
Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."
The thing is, Caesar (i.e. government) has chosen to define what belongs to him by means of tax law. Therefore, income that is not taxable for whatever reason is not Caesar's - meaning that even according to Jesus' words there is no moral obligation to pay it to him.

Again, you are missing the distinction between a moral and a legal obligation. You have no legal obligation to pay more than what the government requires.

There also is a distinction between the Roman government and US or UK government. Jesus was answering a trick question about the obligations of an occupied people toward their oppressors, essentially, do you have a moral obligation to fulfill the legal requirements established by an immoral oppressive power? A thorny conundrum, which is why the Pharisees raised it.

But, despite all the tea party rhetoric, neither the US nor the UK are oppressive regimes holding their citizens hostage. They are democracies. Unlike the relationship of Rome to Israel, in this case "the government" is not "them" but is in fact us. So the question is entirely different. Rather than talking about our obligation to "them" it is a question about our obligations to
one another. I would suggest therefore that Jesus' teachings about how we care for "the least of these" would be far more relevant to our particular situation.

Posted by Enoch (# 14322) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Alan Cresswell:
Jesus had some strong words to say to the Pharisees and others who claimed "I've done what the Law requires of me, I'm OK". He was quite strongly in favour of doing much more than the legal minimum for the sake of others; going an extra mile, giving the shirt off your back when asked for a coat, helping a despised foreigner mugged by the road side ...
If we follow Jesus' words, then the absolute minimum that any of should be giving is 100%. As not one of us actually gives that amount (and presuming we're not all Hellbound), there must be some amount that's enough to be counted righteous while still having a reasonable amount to spend on ourselves. I assumed that was what the 10% tithe was supposed to define, but maybe not.

Both these arguments are seriously flawed. The state is not a poor and needy person who has no shirt to keep out the cold or is lying beaten up in a ditch. It's well able to look after itself.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Enoch:

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Alan Cresswell:
Jesus had some strong words to say to the Pharisees and others who claimed "I've done what the Law requires of me, I'm OK". He was quite strongly in favour of doing much more than the legal minimum for the sake of others; going an extra mile, giving the shirt off your back when asked for a coat, helping a despised foreigner mugged by the road side ...
If we follow Jesus' words, then the absolute minimum that any of should be giving is 100%. As not one of us actually gives that amount (and presuming we're not all Hellbound), there must be some amount that's enough to be counted righteous while still having a reasonable amount to spend on ourselves. I assumed that was what the 10% tithe was supposed to define, but maybe not.
Both these arguments are seriously flawed. The state is not a poor and needy person who has no shirt to keep out the cold or is lying beaten up in a ditch. It's well able to look after itself.

When it comes to the state's ability to pay for another big-a** high-powered military toy, your description is spot on. When it comes to the state's ability to pay for assistance for the poor and ill among us. the description of a shirtless beggar beaten up in a ditch is very nearly literal.

Posted by Crœsos (# 238) on :

quote:
Originally posted by cliffdweller:
Again, you are missing the distinction between a moral and a legal obligation. You have no legal obligation to pay more than what the government requires.

I'm not sure there's a distinction between the two when it comes to corporate entities. Corporations are legal persons in some respects, but don't usually have any inherent moral code, in part because the corporation endures regardless of any change in personnel. As such, many corporations use the law as a proxy for a moral code.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Enoch:
The state is not a poor and needy person who has no shirt to keep out the cold or is lying beaten up in a ditch. It's well able to look after itself.

There are a vast number of needy people without a shirt or lying beaten in a ditch. Billions of them. As long as there is someone in that situation then there is a need for contributions towards the common good. When the actions of multinationals deprive those most able to assist the poor of the funds they need then that's action contrary to the common good. Calling that immoral sounds about right.

Posted by angelfish (# 8884) on :

quote:
Originally posted by Crœsos:

quote:
Originally posted by cliffdweller:
Again, you are missing the distinction between a moral and a legal obligation. You have no legal obligation to pay more than what the government requires.
I'm not sure there's a distinction between the two when it comes to corporate entities. Corporations are legal persons in some respects, but don't usually have any inherent moral code, in part because the corporation endures regardless of any change in personnel. As such, many corporations use the law as a proxy for a moral code.

A corporation can be held legally liable, as a legal person, for its actions. However, I don't presume God will be holding Amazon.eu to account for its actions come the Day of Judgement. He will, however, I am sure, have something to say to the individuals (direcors and shareholders) who set the policy for that company, and used their considerable influence to enrich only themselves.

Posted by tclune (# 7959) on :

quote:
Originally posted by angelfish:
He will, however, I am sure, have something to say to the individuals (direcors and shareholders) who set the policy for that company, and used their considerable influence to enrich only themselves.

"Well done, good and faithful servant?"

--Tom Clune

Posted by Alan Cresswell (# 31) on :

“You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?”

Guess what the Gospel is the first Sunday in Aug, when I'm next down to preach?

Posted by moonlitdoor (# 11707) on :

quote:

originally posted by Cliffdweller

Government revenues are, in fact, a zero sum game. If you "avoid" taxes, either someone else must pay more (potentially someone poorer than you) or some government services must be cut (again, most likely services that benefit the poor).

This seems a bit of an over simplification to me. I agree that we have a moral responsibility which goes beyond our legal responsibility, but it's a bit more complicated than avoiding courses of action which result in paying less tax. I generally cycle to work for example. If I drove to work, I would pay a lot more in tax as petrol is quite heavily taxed here. According to the zero sum game argument someone else has to pay the tax I'm not paying. But few people would describe my action of cycling as tax avoidance or particularly sinful.

It seems to me that is partly because there are other social goods than those paid for by the government and I might be contributing to some of them. Also I think it is partly because my choices are within the spirit as well as the letter of the taxation system we have. I am not trying to circumvent the intention of any rules.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by moonlitdoor:

quote:

originally posted by Cliffdweller

Government revenues are, in fact, a zero sum game. If you "avoid" taxes, either someone else must pay more (potentially someone poorer than you) or some government services must be cut (again, most likely services that benefit the poor).

This seems a bit of an over simplification to me. I agree that we have a moral responsibility which goes beyond our legal responsibility, but it's a bit more complicated than avoiding courses of action which result in paying less tax. I generally cycle to work for example. If I drove to work, I would pay a lot more in tax as petrol is quite heavily taxed here. According to the zero sum game argument someone else has to pay the tax I'm not paying. But few people would describe my action of cycling as tax avoidance or particularly sinful.

It seems to me that is partly because there are other social goods than those paid for by the government and I might be contributing to some of them. Also I think it is partly because my choices are within the spirit as well as the letter of the taxation system we have. I am not trying to circumvent the intention of any rules.

Yes, I would agree that it is complex, for precisely the reasons you cite, as well as those noted by others. Ethical and moral decision making usually is. It's also prone to hypocrasy and legalism, again, as with most moral and ethical decision making.

But at the same time, I would stand by my general point, even if the actual nuts-and-bolts implementation will undoubtedly be messy and complicated. And I should add that I'm preaching to myself mostly here, as usually I follow the American tradition of leveraging every deduction available to me.

Posted by Demas (# 24) on :

I suppose I could give the State more money then I am legally obliged to do. Some of it would be spent on killing people and blowing things up of course.

And it might reduce the amount of money I have available to give to the Salvos.

Would that be a moral tradeoff?

What I am asking, is does the State have an inherently greater moral claim to my money than any other organisation or person?

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Demas:
I suppose I could give the State more money then I am legally obliged to do. Some of it would be spent on killing people and blowing things up of course.

Well, yes, there is that. Again, complicated.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Demas:
I suppose I could give the State more money then I am legally obliged to do. Some of it would be spent on killing people and blowing things up of course.

And it might reduce the amount of money I have available to give to the Salvos.

Would that be a moral tradeoff?

What I am asking, is does the State have an inherently greater moral claim to my money than any other organisation or person?

I wouldn't say that the State, or any other organisation, has a moral claim to your money. But, neither do you have any moral claim to your money. "Your money" is a gift from God, and he has the moral claim on that.

I would say that giving to the Salvos, or other cause that supports others, is morally equivalent to giving to the State. Which is also recognised by the State, hence the options for Gift Aid (and, equivalent tax reduction/redirection schemes outwith the UK).

Could you give extra to the government? I'm sure no one would complain! Would you have control over how it was spent? No idea. You could always try a letter.

"Dear Mr Osborne,

I am strongly in favour of universal, quality health care available free at the point of need. I can afford to take out private medical insurance, but rather than boost the profits of BUPA I enclose a cheque payable to the Treasury, and request that you use it to increase the budget for the NHS.

Yours etc ..."

Posted by Alan Cresswell (# 31) on :

Part of the complexity is that taxation is not just about revenue raising. Taxation is also used to deter some activities (eg: duties on alcohol or cigarettes to discourage alcoholism and smoking) or encourage other activities (eg: Gift Aid to encourage philanthropic giving).

Fuel duty, in part, exists to make driving more expensive and encourage the use of public transport and other means of getting around. If you choose to cycle then that tax is partially working.

Posted by Enoch (# 14322) on :

quote:
Originally posted by cliffdweller:

quote:
Originally posted by Enoch:

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Alan Cresswell:
Jesus had some strong words to say to the Pharisees and others who claimed "I've done what the Law requires of me, I'm OK". He was quite strongly in favour of doing much more than the legal minimum for the sake of others; going an extra mile, giving the shirt off your back when asked for a coat, helping a despised foreigner mugged by the road side ...
If we follow Jesus' words, then the absolute minimum that any of should be giving is 100%. As not one of us actually gives that amount (and presuming we're not all Hellbound), there must be some amount that's enough to be counted righteous while still having a reasonable amount to spend on ourselves. I assumed that was what the 10% tithe was supposed to define, but maybe not.
Both these arguments are seriously flawed. The state is not a poor and needy person who has no shirt to keep out the cold or is lying beaten up in a ditch. It's well able to look after itself.
When it comes to the state's ability to pay for another big-a** high-powered military toy, your description is spot on. When it comes to the state's ability to pay for assistance for the poor and ill among us. the description of a shirtless beggar beaten up in a ditch is very nearly literal.

Still flawed. The state's ability to pay either for "another big-a** high-powered military toy" or the "assistance for the poor and ill among us" is identical. It has the choice.

You may disagree. You may simply say that it is the power that is, and so is ordained of God come what may. Nevertheless, how it exercises that choice does affect the degree of commitment most people give to it, and the extent to which they self-identify with its interests.

When it comes to helping the shirtless beggar, if we took this seriously, we would help him or her direct rather than excuse ourselves by saying that a smidgeon of our taxes goes towards that.

quote:
Originally posted by Alan Cresswell:
Part of the complexity is that taxation is not just about revenue raising. Taxation is also used to deter some activities (eg: duties on alcohol or cigarettes to discourage alcoholism and smoking) or encourage other activities (eg: Gift Aid to encourage philanthropic giving).

Yebbut do we agree with that? The primary purpose of taxation is to fund the government in doing what it has to do. Wouldn't it be more wholesome if the Chancellor started and stopped there?

Taxing tobacco is a good way of raising revenue. As soon as you add the notion that it should discourage smoking at the same time, it introduces a conflict of interest. Logic, common sense etc would say that if tobacco carries a tax, the more people buy, the more the government raises.

As I don't smoke, I'm happy for smokers to bear an extra proportion of the cost of paying for government. That's hardly an ethical view that would impress the high minded.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Jade Constable:
Of course tax avoidance is a sin - it is a way of loving money above loving God and one's neighbour that ensures that the rich get richer, and the poor get poorer. And if the CoE is participating in this, then yes, that is committing sin. ++Sentamu might be hypocritical in saying this, but plenty of other people say it too (SCM for instance and the organisations we work with such as Church Action on Poverty) and are not hypocritical in saying so. Perhaps the bishop's stance might lead him to change things for the better within the CoE!

Jade,

I think you may not have understood what Croesus was saying in the OP. There’s a real distinction between tax evasion and tax avoidance, and I don’t know that you have picked up on that. It does not look as if the good Archbishop has either.

Tax evasion is an offence and a person who engages in it almost certainly goes to gaol, apart from financial penalties. I would be an evader if I took cash in hand for work I did and did not declare that to the tax office. Indeed, a former colleague did a more sophisticated version of that. He received cheques for fees and endorsed them straight over to pay his sons’ school fees, his Amex bill and the like.

Tax avoidance is not a criminal matter. I gather that you are a student receiving financial benefits. You are therefore a tax avoider; instead of studying you could be out in a job, earning money and paying the appropriate tax. You have very understandably chosen to study instead and thereby avoid tax. You don’t go to gaol for that avoidance.

Like many people around where we live, Madame and I are tax avoiders. There is no capital gains tax here on your principal place of residence, generally speaking. We have over the years put after-tax income into improving our house and increasing its value as well as making it more comfortable for living in the manner we like. None of that increased value is taxable. On the other hand, we could have used that money to buy some shares. Not only would we have paid tax on the income from those shares, when we sold them we would have paid tax on any increase in value over the prescribed rate. We have quite legally avoided tax, just as you are.

[ 22. June 2013, 08:36: Message edited by: Gee D ]

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by cliffdweller:
Unlike the relationship of Rome to Israel, in this case "the government" is not "them" but is in fact us.

I love it when people actually believe that.

No, we're not in an oppressive dictatorship. But that doesn't mean the government is "us". Do not fool yourself into thinking that any of those corrupt bastards in government has even a single fuck to give about the cares of ordinary folk like you or I. Regardless of who gets elected they will fuck us over every chance they get, and don't you forget it.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Demas:
I suppose I could give the State more money then I am legally obliged to do. Some of it would be spent on killing people and blowing things up of course.

Yes. Yes it would. And when Jesus said "Give Caesar what is Caesar's," almost all of it was spent on killing people (blowing up would come later). That's why Emperors raised taxes back then: to wage war. You don't think they used taxes to provide schools, hospitals, and retirement homes, do you?

So in effect Jesus is saying, "Yes. Give Caesar the money he needs to keep oppressing you. And if you're lucky, he might build you a road as a consolation prize."

Posted by Chapelhead (# 21) on :

So many misconceptions, so little time... [Roll Eyes]

Let's start with the ABY

quote:
Originally posted by Crœsos:
. . . according to Archbishop of York John Sentamu.

quote:
Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."
Note that Archbishop Sentamu is talking about tax avoidance, which is structuring your assets and expenses in perfectly legal ways to minimize your tax burden, not tax evasion, which is not paying taxes you legitimately owe.

So ++Sentamu thinks that tax avoidance - and he is clearly talking about tax avoidance, not tax evasion - is sinful. So having ISAs is sinful; having a pension plan (rather than just stuffing money away for later) is sinful; those gift-aid envelopes the churches are so keen that people use are sinful. It's difficult to come to any conclusion other than that he is being an idiot (by talking about something he knows nothing about), hypocritical (because he is criticising actions from those 'nasty big companies' that he is happy to encourage in his flock) or mendacious (because he knows he is talking bunkum and is just doing it because it is popular).

Posted by Angloid (# 159) on :

quote:
Originally posted by Enoch:

When it comes to helping the shirtless beggar, if we took this seriously, we would help him or her direct rather than excuse ourselves by saying that a smidgeon of our taxes goes towards that.

I think many of us, if we encountered a shirtless beggar in a ditch outside our house, might actually give him/her some direct help. Or at least feel very guilty about not doing. But that would not solve the problem of other shirtless beggars in other ditches.

The tax we pay at least partly (even under this government which lacks any social conscience) helps to keep people from falling into ditches (real or metaphorical). We can and should do more, but not just by offering individual gestures of 'charity', rather by campaigning to make our society more compassionate and more equal.

As the blessed Helder Camara said, "When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist."

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Chapelhead:
So ++Sentamu thinks that tax avoidance - and he is clearly talking about tax avoidance, not tax evasion - is sinful. So having ISAs is sinful; having a pension plan (rather than just stuffing money away for later) is sinful; those gift-aid envelopes the churches are so keen that people use are sinful. It's difficult to come to any conclusion other than that he is being an idiot (by talking about something he knows nothing about), hypocritical (because he is criticising actions from those 'nasty big companies' that he is happy to encourage in his flock) or mendacious (because he knows he is talking bunkum and is just doing it because it is popular).

I think we all know what ++John means, and I think we all know (at least in the UK, where it has become News) that "tax avoidance" has recently taken on a new meaning. It doesn't mean using up-front, large-print means to minimise tax, such as voluntarily earning less, or using ISAs.

What it means is to keep the letter of the law while going against its spirit; to search the small print for loopholes; to mislead without actually lying; to "tithe dill, and mint, and cumin, while ignoring the weightier matters of the law".

That's what he's talking about. It's legal. It's also sinful.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Enoch:
]Still flawed. The state's ability to pay either for "another big-a** high-powered military toy" or the "assistance for the poor and ill among us" is identical. It has the choice.

You may disagree. You may simply say that it is the power that is, and so is ordained of God come what may. Nevertheless, how it exercises that choice does affect the degree of commitment most people give to it, and the extent to which they self-identify with its interests.

But this discussion isn't about "feelings" or what we "want" to do. I assume pretty much all of us don't "feel" like paying taxes. This discussion is about what we should do. And the specific tangent in question is about how that particular moral decision is complicated by the fact that our taxes go toward both weapons of war and weapons of life.

quote:
Originally posted by Enoch:

When it comes to helping the shirtless beggar, if we took this seriously, we would help him or her direct rather than excuse ourselves by saying that a smidgeon of our taxes goes towards that.

Nonsense. In my experience (not you particularly-- I don't know you) arguments for direct aid are the ones that tend to be more about "excusing" than the reverse.

Yes, if we care about the poor, we will get personally involved and do what we can for the people in our direct sphere of influence. But not everyone is in our sphere of influence. Many of the poor live in isolated rural communities, or are shut-ins isolated by lack of mobility. Suggesting that all aid should be direct aid generally means we will give only to the visible poor-- and, generally, the poor who gain our sympathy by looking "worthy" as opposed to the mentally ill street person who is verbally abusive and smells.

The causes of poverty are complex and systemic. If we're going to go beyond "should we give to the poor?" to "why are they poor?" we're going to have to get to the root causes of poverty-- something which, God help us, can be addressed best on the political level where economic and political and social policy is made. Addressing poverty will require systemic solutions.

All of which goes to the complexity of the question of taxation, given that the government, in both its policies and spending, is often both cause and cure.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Gee D:

quote:
Originally posted by Jade Constable:
Of course tax avoidance is a sin - it is a way of loving money above loving God and one's neighbour that ensures that the rich get richer, and the poor get poorer. And if the CoE is participating in this, then yes, that is committing sin. ++Sentamu might be hypocritical in saying this, but plenty of other people say it too (SCM for instance and the organisations we work with such as Church Action on Poverty) and are not hypocritical in saying so. Perhaps the bishop's stance might lead him to change things for the better within the CoE!
Jade,

I think you may not have understood what Croesus was saying in the OP. There’s a real distinction between tax evasion and tax avoidance, and I don’t know that you have picked up on that. It does not look as if the good Archbishop has either.

Tax evasion is an offence and a person who engages in it almost certainly goes to gaol, apart from financial penalties. I would be an evader if I took cash in hand for work I did and did not declare that to the tax office. Indeed, a former colleague did a more sophisticated version of that. He received cheques for fees and endorsed them straight over to pay his sons’ school fees, his Amex bill and the like.

Tax avoidance is not a criminal matter. I gather that you are a student receiving financial benefits. You are therefore a tax avoider; instead of studying you could be out in a job, earning money and paying the appropriate tax. You have very understandably chosen to study instead and thereby avoid tax. You don’t go to gaol for that avoidance.

I think you are misreading Jade and this discussion. We are well aware, as I'm sure, is" the good Archbishop", that there is a difference between tax evasion and tax avoidance, and that tax avoidance is perfectly legal. Hence this discussion. If the question was simply "should we break the law to avoid taxes?" it would be a rather short discussion. The question here, again, is about morality, not legality. The fact that most all of us are "tax avoiders" in one way or another simply illustrates the complexity of the question, which is what makes for a good discussion.

Posted by Ethne Alba (# 5804) on :

Tax Evasion is sin. We're all agreed on that?

But Tax Avoidance? At what point does avoidance become a sin?

And is it facetious to suggest that tax avoidance is usually only considered a sin if it is Just past what we ourselves do?

( ie..... what They...and Other People... do)

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Ethne Alba:
Tax Evasion is sin. We're all agreed on that?

Tax evasion is a crime. Is something illegal necessarily a sin? If a tax is immoral, is it more sinful to pay it or evade it?

Posted by Gee D (# 13815) on :

quote:
Originally posted by cliffdweller:
We are well aware, as I'm sure, is" the good Archbishop", that there is a difference between tax evasion and tax avoidance, and that tax avoidance is perfectly legal. Hence this discussion. If the question was simply "should we break the law to avoid taxes?" it would be a rather short discussion. The question here, again, is about morality, not legality. The fact that most all of us are "tax avoiders" in one way or another simply illustrates the complexity of the question, which is what makes for a good discussion.

The trouble is that I'm nowhere near as certain as you that either ++ John or Jade Constable is aware of the difference, nor are some other posters. Some seem to think of a spectrum - "at what point does avoidance become evasion" sort of thing. It isn't. Avoidance is perfectly legal behaviour, whether at the small scale which is Jade's position, or the larger scale of profit transfers and such like of larger companies.. Evasion is a criminal offence and is behaviour totally different in kind rather than scale.

As your last sentence suggests, the real question is what avoidance behaviours should proscribed and become evasion. What many posters suggest is that there should be some sort of speed limit. Travelling at up to 50 kph is legal, and above that illegal unless signposted otherwise. The great problem is converting that into the myriad behaviours which are avoidance. How would you deal with behaviour such as Jade's or mine?

Posted by Jade Constable (# 17175) on :

quote:
Originally posted by Gee D:

quote:
Originally posted by cliffdweller:
We are well aware, as I'm sure, is" the good Archbishop", that there is a difference between tax evasion and tax avoidance, and that tax avoidance is perfectly legal. Hence this discussion. If the question was simply "should we break the law to avoid taxes?" it would be a rather short discussion. The question here, again, is about morality, not legality. The fact that most all of us are "tax avoiders" in one way or another simply illustrates the complexity of the question, which is what makes for a good discussion.
The trouble is that I'm nowhere near as certain as you that either ++ John or Jade Constable is aware of the difference, nor are some other posters. Some seem to think of a spectrum - "at what point does avoidance become evasion" sort of thing. It isn't. Avoidance is perfectly legal behaviour, whether at the small scale which is Jade's position, or the larger scale of profit transfers and such like of larger companies.. Evasion is a criminal offence and is behaviour totally different in kind rather than scale.

As your last sentence suggests, the real question is what avoidance behaviours should proscribed and become evasion. What many posters suggest is that there should be some sort of speed limit. Travelling at up to 50 kph is legal, and above that illegal unless signposted otherwise. The great problem is converting that into the myriad behaviours which are avoidance. How would you deal with behaviour such as Jade's or mine?

I am completely aware of the difference between evasion and avoidance. Re my income as a student, I automatically do not pay tax on my income since it is below the annual allowance set by the government that you can earn and not pay tax on - this applies to all low earners, not just students (the allowance is around £10k a year). There is a difference between a government setting a minimum income for individuals paying tax (and therefore not penalising those on low incomes) and an extremely rich company using loopholes to avoid paying taxes they can easily afford. I am not doing anything to avoid paying income tax - I would be perfectly happy to pay it! Google etc actively avoid paying taxes, and that is sinful. It's just the government subsidising greed.

Posted by Anglican't (# 15292) on :

Out of interest, Jade (and others), do you believe that anyone with an ISA is a sinner?

Posted by Gee D (# 13815) on :

Jade Constable said:

I am completely aware of the difference between evasion and avoidance. Re my income as a student, I automatically do not pay tax on my income since it is below the annual allowance set by the government that you can earn and not pay tax on - this applies to all low earners, not just students (the allowance is around £10k a year). There is a difference between a government setting a minimum income for individuals paying tax (and therefore not penalising those on low incomes) and an extremely rich company using loopholes to avoid paying taxes they can easily afford. I am not doing anything to avoid paying income tax - I would be perfectly happy to pay it! Google etc actively avoid paying taxes, and that is sinful. It's just the government subsidising greed.

At no stage did I even vaguely suggest that you should be paying tax on your student benefit. You should not. But I did say that by being a student, not working and therefore not earning a sufficient income, you were avoiding paying tax. In making your choice to be a student etc you almost certainly did not have that as your intention, but that is certainly the effect.

I set out examples of how I have deliberately taken steps to avoid paying tax. In emotive language, I could be said to have taken advantage of a loophole. In more neutral terms, I have placed some money in a manner which the government has chosen not to tax. The same with the steps taken by "extremely rich companies", to use your words. Those companies have chosen to arrange their funds in a way which the government has decided should not be taxed.

In neither case could it be said that what has been done was some error of draftsmanship, which has caught the taxation authorities by surprise. Do you agree?

Posted by Adeodatus (# 4992) on :

Gee D, you've made the point that you are quite sure about the difference between evasion and avoidance.

Are you also aware of the difference between legality and morality?

For example, when Jesus denounces the Pharisees for keeping the letter of the law while flouting its spirit, whose side are you on? Are you on the side of the Pharisees, who are merely arranging their financial affairs in a perfectly legal way, or are you on the side of Jesus, who seems to care more about fairness and justice than about the weaknesses, loopholes and illogicalities of the law?

Posted by Gee D (# 13815) on :

Yes, I think I have a fairly good grasp of the difference, and I think I have a fairly good grasp of the context in which Jesus spoke of the Pharisees.

As has been pointed out above, Jesus also said to render to Caesar that which is Caesar's, and to God that which is God's. That ties in very well with the passage to which you refer. The Pharisees were applying the letter of the law rather than its spirit in religious practice. Here, we are talking of Caesar's taxation laws, which have been crafted to render various classes of economic activity taxable. As no doubt you do, I pay the relevant taxes in those classes which apply to me. I've set out some classes of activity in which Jade for her part and I for mine have taken and which reduce our taxation liabilities.

What comments do you have on those various classes?

Posted by moonlitdoor (# 11707) on :

I shall be sorry if the church decides to change its role from criticising other people's sex lives to criticising other people's financial lives. That seems to me to be repeating the same mistake. We don't really need episcopal encouragement to say that the sins are all someone else's, as we are generally quite ready to do that without any encouragement.

For that reason I like what cliffdweller said about preaching to herself.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Gee D:
The Pharisees were applying the letter of the law rather than its spirit in religious practice. Here, we are talking of Caesar's taxation laws, which have been crafted to render various classes of economic activity taxable.

A Pharisaical distinction.

Posted by marsupial. (# 12458) on :

The other thing here is that there is tax avoidance, and fhen there is tax avoidance. I assume what the bishop particularly has in mind arre transactions with no legitimate business purpose, which are done only for the purpose of avoiding tax, and which are contary to the policy of the Income Tax Act.

A number of countries have provisions in their tax codes called a General Anti-avoidance Rule specifically to capture such transactions. See e.g. Section 245 of the Canadian Income Tax Act, explained (sort of) here.

(Sorry bad ipad typing.)

[ 23. June 2013, 13:54: Message edited by: marsupial. ]

Posted by leo (# 1458) on :

quote:
Originally posted by moonlitdoor:
I shall be sorry if the church decides to change its role from criticising other people's sex lives to criticising other people's financial lives. That seems to me to be repeating the same mistake. We don't really need episcopal encouragement to say that the sins are all someone else's, as we are generally quite ready to do that without any encouragement.

For that reason I like what cliffdweller said about preaching to herself.

Whereas sex affects very few - unless you pass on a disease, tax evasion kills people - large companies in 3rd world companies dispossess small landowners and small businesses who lose all they have and eventually starve to death.

So the commandment being broken here is not merely theft, it is (indirect) murder.

[ 23. June 2013, 16:46: Message edited by: leo ]

Posted by Enoch (# 14322) on :

As an English person, not an Irish one, I can see why both Margaret Hodge and I may prefer it. But I still cannot see why it is somehow more virtuous for a multinational to pay its taxes in England rather than Ireland, or to arrange its affairs so that the waBenzi in places like Syria or Brazil can have more money to misappropriate.

Cosying up to the local waBenzi so that they will slew the legal system and let you evict subsistence farmers from land you want to burn off and pollute the atmosphere for several months on the opposite side of the South China Sea, is an abuse, and wickedness. However, that is not tax evasion. Also, it isn't necessarily multinationals that are doing it. Most countries have waBenzi who are quite capable of doing that sort of thing for themselves.

Posted by Gee D (# 13815) on :

quote:
Originally posted by marsupial.:
The other thing here is that there is tax avoidance, and fhen there is tax avoidance. I assume what the bishop particularly has in mind arre transactions with no legitimate business purpose, which are done only for the purpose of avoiding tax, and which are contary to the policy of the Income Tax Act.

A number of countries have provisions in their tax codes called a General Anti-avoidance Rule specifically to capture such transactions. See e.g. Section 245 of the Canadian Income Tax Act, explained (sort of) here.

(Sorry bad ipad typing.)

Similar provision here, but you would be surprised at the sorts of schemes whichhave been held not to be caught by the provision.

Picking up your first sentence, I don't think that anyone would say that Jade Constable's tax avoidance was immoral. What about my actions, at least partially directed to minimising my capital gains tax liability?

Or another example. A few years ago, my floor decided to carry out some substantial renovations, many of them being of an income rather than a capital nature. I could reasonably foresee that my taxation liability in the coming year would be greater because my income would be higher. Like my colleagues, I would be levied for the renovations, and a proportion of the levy would be tax deductible. I joined in the vote to postpone the levy date to the next taxation year. I thereby minimised my taxation liability and avoided paying some tax.

Was that immoral? If not, why is paying tax in Vanuatu* rather than the Australia immoral? I suspect that the only real difference which many would perceive between my activities and those of rich companies is one of scale. If so, where is tthe line drawn?

*and by the way, Vanuatu receives substantial aid from Australia.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Adeodatus:
A Pharisaical distinction.

I don't agree with that and I suspect that we can never agree on it. IAE, one of my aims in my posts has been to get some rational discussion on what has so far been expressed more often than not in emotional terms. I still seek your comments whether you agree that the various steps Jade Constable and I have taken which have had the effect of avoiding tax are immoral or not.

Posted by malik3000 (# 11437) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by Enoch:
The state is not a poor and needy person who has no shirt to keep out the cold or is lying beaten up in a ditch. It's well able to look after itself.
There are a vast number of needy people without a shirt or lying beaten in a ditch. Billions of them. As long as there is someone in that situation then there is a need for contributions towards the common good. When the actions of multinationals deprive those most able to assist the poor of the funds they need then that's action contrary to the common good. Calling that immoral sounds about right.

Bingo!

Posted by malik3000 (# 11437) on :

quote:
Originally posted by Emily Windsor-Cragg:
IRS taxes only apply to citizens working outside the US or for foreign companies within the US.

Anybody stupid enough to file ... well, they get what their ignorance purchases.

Anyone stupid enough not to file on the grounds of an argument that has been decisively discredited many times is likely to get what Wesley Snipes got -- prison time.

Posted by Demas (# 24) on :

In Australia, if you make a feature film you can get a tax offset of around 35% of the film's budget. That is, if you owe $10,000,000 in tax, and make a $10,000,000 film then you can avoid paying $3,500,000 in tax.

Since the intent of parliament was to encourage making films by allowing people to avoid this tax, I don't see how this tax avoidance could be a sin.

So how to we draw the distinction between sinful tax avoidance and tax avoidance which isn't sinful?

Posted by marsupial. (# 12458) on :

quote:
Originally posted by Gee D:
Similar provision here, but you would be surprised at the sorts of schemes whichhave been held not to be caught by the provision.

Picking up your first sentence, I don't think that anyone would say that Jade Constable's tax avoidance was immoral. What about my actions, at least partially directed to minimising my capital gains tax liability?

IANATL, but as I understand matters the same is true of the Canadian GAAR -- i.e., that a number of schemes that don't quite pass the smell test have been held not to be captured by it. The point is that not every kind of tax avoidance is on all fours with every other kind of tax avoidance. And if there's actually a workable legal standard for "pure" tax avoidance out there (which in the nature of things is going to favour the taxpayer in the grey areas), surely it's not impossible to make distinctions, or at least set up a continuum, for the purpose of assessing the moral acceptability of various ways somebody might (legally) try to minimize their taxes.

Re. putting money into your principal residence instead of other things because capital gains are not taxable. First thing is that surely this part of the policy of the Act -- the idea being that your principal residence is not mainly an investment; it's where you live, and everyone has to live somewhere. And investment in your principal residence up to a point is investment in basic quality of life. OTOH if you decide to turn your principal residence into Versailles purely in order to avoid paying taxes then someone might question both your common sense and your commitment to the common good supported by the payment of income taxes. It's a judgement call, not a bright line.

Likewise I find it hard to criticize somebody who, given the choice between two taxation years, decides to declare an expense in a taxation year where there's going to be more income to offset it against. But again there's a continuum.

Then we have the added complication that corporations, whose tax avoidance strategies probably collectively have a much more significant effect on the public purse than those of individuals, are only tenuously moral agents. Part of the problem with saying that corporate tax minimization strategies are sin is understanding how corporations can be said to sin in the first place.

Posted by Enoch (# 14322) on :

quote:
Originally posted by marsupial.:
... Then we have the added complication that corporations, whose tax avoidance strategies probably collectively have a much more significant effect on the public purse than those of individuals, are only tenuously moral agents. Part of the problem with saying that corporate tax minimization strategies are sin is understanding how corporations can be said to sin in the first place.

No, that is not an added complication.

A corporation has no immortal soul. So it cannot sin. However, the MD and the individual members of its board do have immortal souls and are individually answerable for their roles in the decisions the corporation makes.

The same, incidentally, applies to government and 'the church'.

On the great and terrible day, the argument 'it was the company what did it, not me' will be about as persuasive as 'the woman gave it to me and I did eat'.

[ 24. June 2013, 07:29: Message edited by: Enoch ]

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Gee D:

quote:
Originally posted by Adeodatus:
A Pharisaical distinction.
I don't agree with that and I suspect that we can never agree on it. IAE, one of my aims in my posts has been to get some rational discussion on what has so far been expressed more often than not in emotional terms. I still seek your comments whether you agree that the various steps Jade Constable and I have taken which have had the effect of avoiding tax are immoral or not.

I'll give you an analogy. Yesterday I was in a charity shop, and the two students who were staffing it were spending a few quiet minutes trying to work out how to solve the Rubik's cube. One of them spoke of algorithms and suchlike. There was a long silence. And then the other said, "Or you could take the little squares off and stick them back on the right way." Pause. "That would be cheating," said the other.

Now, the tax laws are written with a certain intent as to how they should be worked. Some things are both illegal and unfair - that's not what we're talking about here. Some things are legal and fair - that's like solving the Rubik's cube with algorithms and suchlike. But while some things are possible under the law - and therefore legal - they may be unfair and immoral. That would be like taking the squares off the cube and sticking them back on. It's perfectly possible, and wasn't Mr Rubik silly for constructing his cube so carelessly, but it's cheating.

Now, different governments structure their tax laws differently, and I'm not going to get into discussing tax laws in non-UK jurisdictions because I don't know how they're intended to work. But, to take some UK examples -

Is it fair to straightforwardly earn less than the tax threshold, for instance by having a part-time job on minimum wage? Yes. I wouldn't even call that tax avoidance. That's more like "Please pay me more, even if it means paying tax on it."

Is it fair to use individual savings accounts? Yes. It's an up-front method, advertised by the government, to extend the idea of a tax threshold to savings as well as earnings. It's part of how the tax laws are intended to be used.

Is it fair to set up a charity called the Gee D Benevolent Fund, pay nearly all of your income into it, and then get the charity to loan you the money back (a loan which, of course, will never be called in, even though it theoretically could be), resulting in you not paying tax on your charitable donation, and then not paying tax on the loan either? No, it isn't - I think it's perfectly obvious the tax laws were not intended to work like that.

Is it fair to set up a company in the UK, and another elsewhere, allow the UK company to make £1million profit, and then have the other company charge it £990,000 just to use its logo, reducing the UK company's profits to a mere £10,000 and avoiding corporation tax? No, it isn't. Again, it's perfectly obvious that the tax laws were not intended to be used like that, and anyway who the hell ever heard of being charged nearly a million quid just to use a logo?

But I'll tell you what, here's a rule of thumb. If you spend more time and energy minimising your tax than it takes to say a quick* Te Deum every day for a year, then I'd say you should be redirecting your attention. Fair?

(* And for the tax accountants out there, "quick" doesn't mean taking a bloody hour and a half over it!)

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Enoch:
On the great and terrible day, the argument 'it was the company what did it, not me' will be about as persuasive as 'the woman gave it to me and I did eat'.

Posted by South Coast Kevin (# 16130) on :

quote:
Originally posted by Enoch:
On the great and terrible day, the argument 'it was the company what did it, not me' will be about as persuasive as 'the woman gave it to me and I did eat'.

I don't agree at all. I think it all depends on what an individual did with whatever amount of power and influence they have in any particular company or situation. Granted, simply quitting is an option, but there may be strong reasons for staying* despite there being certain matters of corporate conduct that one doesn't approve of. After all, perfect companies don't exist in the real world, do they?

*I'm thinking mainly in terms of positive things the company does, but there could well be other reasons like needing to provide for your family or feeling that you're a valuable Kingdom presence in the midst of much darkness and evil.

Posted by Mark Betts (# 17074) on :

Turning a blind eye, and passing and maintaining laws which allow tax avoidance is the bigger sin. It's no use politicians pointing fingers at celebrities when it is they themselves who created the problem in the first place and won't do anything to change it.

Posted by Enoch (# 14322) on :

quote:
Originally posted by South Coast Kevin:
... I think it all depends on what an individual did with whatever amount of power and influence they have in any particular company or situation. ...

I had thought that was what I was saying.

I don't think one's answerable for the things one didn't vote for or failed to persuade people to do.

Posted by Enoch (# 14322) on :

quote:
Originally posted by Mark Betts:
Turning a blind eye, and passing and maintaining laws which allow tax avoidance is the bigger sin. It's no use politicians pointing fingers at celebrities when it is they themselves who created the problem in the first place and won't do anything to change it.

That's a very strange way of looking at it, if you don't mind me saying. A better parallel is the long struggle though evolution (if we're allowed to mention that here) as predator and prey adjust themselves to each other, the predator trying to find new ways of catching the prey, and the prey finding new ways of not getting caught.

What's odd is that you seem to be blaming the predator for not developing its new strategies fast enough.

Posted by Mark Betts (# 17074) on :

quote:
Originally posted by Enoch:
That's a very strange way of looking at it, if you don't mind me saying.

No, I don't mind, but surely I'm not the first person to think it am I?

quote:
A better parallel is the long struggle though evolution (if we're allowed to mention that here)...

Of course you are - it's creationism which gets you blacklisted on here.

quote:
...as predator and prey adjust themselves to each other, the predator trying to find new ways of catching the prey, and the prey finding new ways of not getting caught.

What's odd is that you seem to be blaming the predator for not developing its new strategies fast enough.

I'm not really understanding this, but I can think of one comparison between evolution and parliamentary democracy - both are slow to change. I think the latter is even slower than the former.

It doesn't help that politicians are using these loopholes to line their own pockets while they're about it.

Posted by Demas (# 24) on :

There's a halfway decent economic argument for eliminating corporate income tax entirely, which would have the useful side effect of reducing the amount of potentially immoral tax planning those corporations are doing down to zero.

Posted by Jade Constable (# 17175) on :

quote:
Originally posted by Anglican't:
Out of interest, Jade (and others), do you believe that anyone with an ISA is a sinner?

I believe that everyone is a sinner - do you not??

I don't know the ins and outs of ISAs but I think a case could be made that ISAs are sinful. I am more inclined to think that they are sinful.

Posted by Demas (# 24) on :

Surely by setting up and using an ISA you are doing exactly what the government wanted you to do when it passed the legislation allowing for ISAs?

Posted by South Coast Kevin (# 16130) on :

quote:
Originally posted by Demas:
There's a halfway decent economic argument for eliminating corporate income tax entirely, which would have the useful side effect of reducing the amount of potentially immoral tax planning those corporations are doing down to zero.

Except it would make it massively tempting and worthwhile for individuals to do all they can to turn their income into corporate income. So either governments would have to invest massively in tax legislation / inspection / investigation to stop this happening, or the income tax take would drop (perhaps severely) as those with the means to do so swiftly rearrange their financial affairs.

Posted by Gee D (# 13815) on :

I rather like the Charpentier Te Deum, which takes around 25 minutes – not sure how that fits into your test.

I do not know what individual savings accounts are, but from what you say they are a form of investment into which governments would like you to put your money. That being so, it’s more likely that money is not placed there with any immoral intent. Here, governments of both camps place a high faith in superannuation as a means of enforced saving. In effect, the community at large ha decided that placing money into such a fund is not immoral.

I’m not sure how the avoidance of tax is immoral if the government has deliberately decided that a benevolent fund scheme can be set up to do what you set out*. What there may be is far too generous a test of what is benevolent. I don’t see it as a loophole though. To me, a loophole has connotations of an unforeseen use of legislation.

OTOH, the decisions in some of the cases on our equivalent of the provision Marsupial refers to are hard to understand. Schemes have been established which bear no resemblance to normal commercial operations. In particular, the Curran scheme (named after the person for whom the original such scheme was created) looks to most people as a totally uncommercial; the then High Court decided otherwise. Such schemes can well be immoral.

That leaves the cases which transfer costs to another country. I don’t see those as immoral per se. If a government disagrees with them, what is needed is a series of double-taxation treaties, or else some decently worded legislation.

Dee Towers are a far cry from Versailles. For a start, we don’t have a bevy of milkmaids wandering decoratively around. And apart from anything else, the sort of renovation works we have carried out give a longer term stability to a building industry that is otherwise very subject to cyclical pressures. IOW, we and others have given employment to a range of trades with consequent flow-on effects. I would not call those immoral.

* I do not practise revenue law, and can’t, without a huge amount of work, say if such a procedure is permitted here. I’d be surprised if it did.

Posted by Jade Constable (# 17175) on :

quote:
Originally posted by Gee D:
Jade Constable said:

I am completely aware of the difference between evasion and avoidance. Re my income as a student, I automatically do not pay tax on my income since it is below the annual allowance set by the government that you can earn and not pay tax on - this applies to all low earners, not just students (the allowance is around £10k a year). There is a difference between a government setting a minimum income for individuals paying tax (and therefore not penalising those on low incomes) and an extremely rich company using loopholes to avoid paying taxes they can easily afford. I am not doing anything to avoid paying income tax - I would be perfectly happy to pay it! Google etc actively avoid paying taxes, and that is sinful. It's just the government subsidising greed.

At no stage did I even vaguely suggest that you should be paying tax on your student benefit. You should not. But I did say that by being a student, not working and therefore not earning a sufficient income, you were avoiding paying tax. In making your choice to be a student etc you almost certainly did not have that as your intention, but that is certainly the effect.

I set out examples of how I have deliberately taken steps to avoid paying tax. In emotive language, I could be said to have taken advantage of a loophole. In more neutral terms, I have placed some money in a manner which the government has chosen not to tax. The same with the steps taken by "extremely rich companies", to use your words. Those companies have chosen to arrange their funds in a way which the government has decided should not be taxed.

In neither case could it be said that what has been done was some error of draftsmanship, which has caught the taxation authorities by surprise. Do you agree?

You seem to have missed the part where I mentioned that I don't pay income tax because of my low income, so here it is again - I don't pay income tax because I earn under the yearly allowance threshold. If I earned over it, I would pay income tax, even while being a student. If I were to stop being a student and get a job that paid under the allowance, I would also pay no income tax.

Posted by Gee D (# 13815) on :

Jade Constable, I know all that. I repeat - you avoid paying tax because you have chosen to be a full-time student and thereby do not have an income over the tax threshold. A very simple point. As I said many posts ago, I very much doubt that your intention in being a full-time student was to avoid paying tax, but that is a natural consequence of your decision, none the less.

Posted by Jade Constable (# 17175) on :

quote:
Originally posted by Gee D:
Jade Constable, I know all that. I repeat - you avoid paying tax because you have chosen to be a full-time student and thereby do not have an income over the tax threshold. A very simple point. As I said many posts ago, I very much doubt that your intention in being a full-time student was to avoid paying tax, but that is a natural consequence of your decision, none the less.

I do NOT avoid paying income tax because I am a full-time student. I only avoid paying income tax by having an income under the yearly allowance (and people hardly choose to have a low income on purpose). If I earnt over that yearly allowance, I would pay income tax whether I was a student or not. And yes, there are full-time students who have an income over the yearly allowance (via part-time jobs), I'm just not one of them.

[ 24. June 2013, 12:15: Message edited by: Jade Constable ]

Posted by Baptist Trainfan (# 15128) on :

quote:
Originally posted by Jade Constable:

quote:
Originally posted by Anglican't:
Out of interest, Jade (and others), do you believe that anyone with an ISA is a sinner?
I believe that everyone is a sinner - do you not??

I don't know the ins and outs of ISAs but I think a case could be made that ISAs are sinful. I am more inclined to think that they are sinful.

They were surely brought in by the Government as an inducement to save, because Government thought that saving is a Good Thing. So they are not sinful - "sin" comes in when people actively seek to avoid paying tax by looking for unintentional loopholes or through "creative accounting".

Posted by Jade Constable (# 17175) on :

quote:
Originally posted by Baptist Trainfan:

quote:
Originally posted by Jade Constable:

quote:
Originally posted by Anglican't:
Out of interest, Jade (and others), do you believe that anyone with an ISA is a sinner?
I believe that everyone is a sinner - do you not??

I don't know the ins and outs of ISAs but I think a case could be made that ISAs are sinful. I am more inclined to think that they are sinful.
They were surely brought in by the Government as an inducement to save, because Government thought that saving is a Good Thing. So they are not sinful - "sin" comes in when people actively seek to avoid paying tax by looking for unintentional loopholes or through "creative accounting".

But aren't ISAs used by people actively seeking to not pay taxes on their savings? Saving is a good thing of course, but so is paying tax....

Posted by marsupial. (# 12458) on :

quote:
Originally posted by Enoch:

quote:
Originally posted by marsupial.:
... Then we have the added complication that corporations, whose tax avoidance strategies probably collectively have a much more significant effect on the public purse than those of individuals, are only tenuously moral agents. Part of the problem with saying that corporate tax minimization strategies are sin is understanding how corporations can be said to sin in the first place.
No, that is not an added complication.

A corporation has no immortal soul. So it cannot sin. However, the MD and the individual members of its board do have immortal souls and are individually answerable for their roles in the decisions the corporation makes.

Well the directors and officers also have a well-estabished fiduciary duty to act in the best interests of the corporation.

Not necessarily the end of the story but, as I said, an added complication.

Posted by Chapelhead (# 21) on :

quote:
Originally posted by Demas:
So how to we draw the distinction between sinful tax avoidance and tax avoidance which isn't sinful?

Many people find this very easy. The tax avoidance they do is fair and reasonable and not at all sinful, while the tax avoidance other people do is wicked and wrong and sinful. 'Tax avoidance' is an irregular verb...

I wisely and careful use my resources and will be rewarded by my Father in heaven with "well done, thou good and faithful servant".

You are a tax avoider.

They cause the deaths of starving children and the suffering of the ill and infirm and make the baby Jesus cry; they will be condemned to the depths of hell.

Going back to the OP, and the ABY's daft comments (assuming he has been reported accurately). Adeodatus has provided at least some defence of them by suggesting that the ABY didn't really mean all tax avoidance when he said 'tax avoidance'. Unfortunately the ABY chose to say what he did, that tax avoidance (without qualification as to type) is sinful. Of course, to some degree this isn't a stupid a comment as it might at first appear - it achieved the objective of providing the 'oxygen of publicity' which the ABY seems keen on. But as a comment on tax avoidance from one of the most senior people in an organisation that does so much to benefit from tax avoidance it really doesn't make much sense.

Perhaps we could look at one of the pantomime villains of this story - Amazon (a company mentioned by a number of people upthread). I'm no expert at reading US company accounts (Amazon's are freely available on the net), but it seems to me that the reason why Amazon pays a relatively small amount of tax compared with its turnover is simple - because it doesn't make much profit. Amazon is currently trying to grow market share rather than make profit, so for 2012 Amazon.com Inc's consolidated turnover of USD 61b produced income before taxes of USD 544m. The provision for tax on this was USD 428m. So for all their supposed satanically clever tax arrangements they end up paying tax at 78%. Anyone here who pays a higher rate of tax than that, please feel free to have a pop at Amazon. Others could perhaps advise Amazon on how to pay less in tax.

Looking at actual tax paid is even more striking, Amazon.com Inc paid USD 693m in tax in 2012 - more than its profit.

But don't they have some fiendishly sophisticated corporate set-up in obscure tax havens outside the jurisdiction of proper authorities? Well, the main 'low tax' country from which they operate seems to be Luxembourg, not some tiny, regulation-free island with minimal legal framework. Luxembourg is a member of the EU, with all the regulatory, financial and reporting requirements that go with that.

Yes, Amazon has chosen Luxembourg as a European base for its European operations. But being able to move around Europe for work and residence is largely what the EU was intended for, back in the days when we were told it was to be a 'common market' (even though it never has been). Being able to choose where in Europe you choose to live and work is a basic principle of the EU. It is what allows Polish plumbers and farm labourers to work in the UK, British IT specialists to work in Italy, German engineers to work in France and so on. You might think it a stupid arrangement, but to allow it for some but not all would clearly be inequitable. And if you don't like it then the two options would seem to be:

Campaign for full fiscal, monetary and political union for EU countries - it won't stop people moving about, but may give less incentive to do so.
Campaign for the UK to leave the EU, so things sold by a Luxembourg-based company ail be imports to the UK and can be taxed accordingly.

Following this logic through, why does Amazon not pay more tax - because it doesn't make much profit. Why doesn't it make more profit - because it sells things more cheaply than others. So how do we make sure a greater level of tax gets paid - by not buying cheap stuff from Amazon and instead paying more elsewhere. This doesn't guarantee that more tax will be paid (the other firms may be less efficient, or based in some obscure offshore tax haven), but it gives a chance.

The treatment of Amazon (boo hiss) reminds me of the issue of Proctor and Gamble being "in league with Satan" [Roll Eyes]

from a few decades back.

[ 24. June 2013, 13:19: Message edited by: Chapelhead ]

Posted by Enoch (# 14322) on :

quote:
Originally posted by Jade Constable:
... But aren't ISAs used by people actively seeking to not pay taxes on their savings? Saving is a good thing of course, but so is paying tax....

Jade, the logic of your position, would be that although you earn below the tax threshold, you should voluntarily give the government that percentage of your income below the threshold which corresponds to the basic tax rate.

You don't, and you shouldn't. That would be your conscience screwing more out of the poor than the government does.

Posted by deano (# 12063) on :

quote:
Originally posted by Jade Constable:
Of course tax avoidance is a sin - it is a way of loving money above loving God and one's neighbour that ensures that the rich get richer, and the poor get poorer. And if the CoE is participating in this, then yes, that is committing sin. ++Sentamu might be hypocritical in saying this, but plenty of other people say it too (SCM for instance and the organisations we work with such as Church Action on Poverty) and are not hypocritical in saying so. Perhaps the bishop's stance might lead him to change things for the better within the CoE!

Meh... not so much. No.

I mean, you are saying "not breaking the law is a sin".

But tax avoidance is only seen as wrong by those who believe that spending by government is right.

I don't. I don't believe the government is actually very good a spending money. I think it is very poor at it in fact, and doesn't get very good value for its money.

It's much better to leave moeney in the hands of the individuals because they spend it better.

Posted by Penny S (# 14768) on :

So each individual should be responsible for the cleaning of the sewage from their home? Each responsible for the appropriate disposal of waste material they generate? As a couple of examples of things that are better done in groups. And research into what happens with waste disposal when the group concerned is not a government but the Mafia should be enlightening. If not, any layby in the country is an indication of how well individuals do things.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by deano:
But tax avoidance is only seen as wrong by those who believe that spending by government is right.

I don't. I don't believe the government is actually very good a spending money. I think it is very poor at it in fact, and doesn't get very good value for its money.

Irrelevant. When Paul (Romans 13.5) and Peter (1Peter 2.13-17) tell us to obey the civil authorities, there's no "unless you think they're spending your money badly." And when Jesus said to give Caesar what is Caesar's he didn't add, "Cos, you know, I've heard he's got this really good national health idea. Really. It'll be fabulous, trust me."

Posted by Penny S (# 14768) on :

I don't think recourse to rendering unto Caesar is always helpful, since it is not entirely clear that Jesus meant what he appeared to be saying, in answer to an attempt to catch him out. He was in the Temple, where there should have been no image of the guy, and where people might be expected to have the idea that all things come from God and are due to Him, not an earthly power.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Jade Constable:
[QUOTE]

I do NOT avoid paying income tax because I am a full-time student. I only avoid paying income tax by having an income under the yearly allowance (and people hardly choose to have a low income on purpose). If I earnt over that yearly allowance, I would pay income tax whether I was a student or not. And yes, there are full-time students who have an income over the yearly allowance (via part-time jobs), I'm just not one of them.

I give up, I surrender, I can't put it any more simply than I did.

Posted by Demas (# 24) on :

quote:
Originally posted by Adeodatus:

quote:
Originally posted by deano:
But tax avoidance is only seen as wrong by those who believe that spending by government is right.

I don't. I don't believe the government is actually very good a spending money. I think it is very poor at it in fact, and doesn't get very good value for its money.
Irrelevant. When Paul (Romans 13.5) and Peter (1Peter 2.13-17) tell us to obey the civil authorities, there's no "unless you think they're spending your money badly." And when Jesus said to give Caesar what is Caesar's he didn't add, "Cos, you know, I've heard he's got this really good national health idea. Really. It'll be fabulous, trust me."

All the people on this thread are obeying the civil authorities. We're not talking about breaking the law. We're talking about Caesar having a moral claim above and beyond his legal one.

Also the coin belonged to Caesar not because we have a moral obligation to pay more tax to Caesar than Caesar legally obliges us to (which is the topic of this thread) but because it had Caesar's image on it.

If the coin is Caesar's because of his image, what is God's that we should give to him? That which was made in his image. Which is ourselves and the entirety of our lives.

Posted by Demas (# 24) on :

quote:
Originally posted by Gee D:
I give up, I surrender, I can't put it any more simply than I did.

Part of the confusion on this thread comes, I think, from people mistakenly believing that the purpose of the tax system is to raise money for the government to spend on things.

This is certainly a major purpose of the tax system taken overall, but for individual bits (like ISAs, superannuation funds, film incentive funds, extra taxes on beer and spirits, allowing certain deductions, lower corporations tax in certain jurisdictions etc etc etc) the purpose of the tax system is to encourage or discourage certain behaviour.

This is why a blanket statement that tax avoidance is sinful is pointlessly blunt. Much tax avoidance is precisely the targeted and wished for result of the tax system. People set up corporations in jurisdictions, save money, go back to university, drink less, smoke less, invest in films and research and development because of the 'loopholes' deliberately set up by governments.

And if too many people make too many films, then the government adjusts the 'loophole'/incentive to balance it out.

Sure the system is overly complicated, and sometimes doesn't work. But any moral critique which doesn't start from an understanding of what we're critiquing is just feel-good narcissism where we make ourselves feel more moral by attacking the perceived sins of others.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Demas:

quote:
Originally posted by Gee D:
I give up, I surrender, I can't put it any more simply than I did.
Part of the confusion on this thread comes, I think, from people mistakenly believing that the purpose of the tax system is to raise money for the government to spend on things.

This is certainly a major purpose of the tax system taken overall, but for individual bits (like ISAs, superannuation funds, film incentive funds, extra taxes on beer and spirits, allowing certain deductions, lower corporations tax in certain jurisdictions etc etc etc) the purpose of the tax system is to encourage or discourage certain behaviour.

This is why a blanket statement that tax avoidance is sinful is pointlessly blunt.

Yes, this point was made and discussed fairly thoroughly on the prior page of this thread. Again, that's why the question makes for a good discussion-- precisely because it (the question, not the tax system) is complex. Questions with an obvious answer rarely make for such a vigorous debate.

Posted by Mere Nick (# 11827) on :

Colossians 3:22-24(NIV)
"Slaves, obey your earthly masters in everything; and do it, not only when their eye is on you and to curry their favor, but with sincerity of heart and reverence for the Lord. Whatever you do, work at it with all your heart, as working for the Lord, not for human masters, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving."

In my profession I'd rightly consider myself as ripping off clients and failing the Lord if I don't help them avoid taxes.

Posted by Gee D (# 13815) on :

Thank you Demas for both your posts - and better luck than I had.

Posted by Doc Tor (# 9748) on :

quote:
Originally posted by deano:
It's much better to leave money in the hands of the individuals because they spend it better.

But you know from experience that that's not true. They squander it and lose it and make poor investments. And moreover, I can't get over the feeling that the right and their corporate overlords say this mantra because it atomises the collective, cooperative bargaining power and leaves the weak and vulnerable open to easy exploitation.

That's how predators work, by separating individuals from the herd. Which is why I'm ideologically opposed to the privatisation of monopoly suppliers. We're stronger together - and if money in your pocket is what concerns you, it's actually cheaper, too.

Posted by leo (# 1458) on :

quote:
Originally posted by Demas:

quote:
Originally posted by Adeodatus:

quote:
Originally posted by deano:
But tax avoidance is only seen as wrong by those who believe that spending by government is right.

I don't. I don't believe the government is actually very good a spending money. I think it is very poor at it in fact, and doesn't get very good value for its money.
Irrelevant. When Paul (Romans 13.5) and Peter (1Peter 2.13-17) tell us to obey the civil authorities, there's no "unless you think they're spending your money badly." And when Jesus said to give Caesar what is Caesar's he didn't add, "Cos, you know, I've heard he's got this really good national health idea. Really. It'll be fabulous, trust me."
All the people on this thread are obeying the civil authorities. We're not talking about breaking the law. We're talking about Caesar having a moral claim above and beyond his legal one.

Also the coin belonged to Caesar not because we have a moral obligation to pay more tax to Caesar than Caesar legally obliges us to (which is the topic of this thread) but because it had Caesar's image on it.

If the coin is Caesar's because of his image, what is God's that we should give to him? That which was made in his image. Which is ourselves and the entirety of our lives.

Not JUST our lives. The burning issue back then was the Roman occupation of the 'promised' land and whether Jews should pay tax to the occupiers.

Since an image on a coin was idolatrous, Jesus was telling them to stop using these coins and for the Romans to give then land back to God and his people.

Given that many multinational companies not only evade taxes but throw people off their own land, this is very pertinent.

Posted by Enoch (# 14322) on :

quote:
Originally posted by leo:
... Since an image on a coin was idolatrous, Jesus was telling them to stop using these coins and for the Romans to give then land back to God and his people. ...

Leo with all due respect, I don't think that's the right exegesis. The zealots of the time would have like it to have been. But I think Jesus was actually saying, 'it's only money'.

Posted by leo (# 1458) on :

It's all in the interpretation - and probably in what one wants it to mean. I was partly thinking of Tolstoy's

quote:
Leo Tolstoy wrote:

Not only the complete misunderstanding of Christ's teaching, but also a complete unwillingness to understand it could have admitted that striking misinterpretation, according to which the words, "To Cæsar the things which are Cæsar's," signify the necessity of obeying Cæsar. In the first place, there is no mention there of obedience; in the second place, if Christ recognized the obligatoriness of paying tribute, and so of obedience, He would have said directly, "Yes, it should be paid;" but He says, "Give to Cæsar what is his, that is, the money, and give your life to God," and with these latter words He not only does not encourage any obedience to power, but, on the contrary, points out that in everything which belongs to God it is not right to obey Cæsar

Also Michel Clevenot, in Materialist Approaches to the Bible

quote:
….Leviticus 25:23 that Israel belonged to God: "The land is mine and you are but aliens and my tenants." As such they had no power or authority to hand the land, or its produce, over to anyone else. By taxing God’s people, Caesar was usurping God’s sovereignty. As for "reconquering from Caesar," even after the Resurrection Jesus’ disciples still looked for the political liberation of Israel (Acts 1:6).

Posted by angelfish (# 8884) on :

I find it a rather peculiar notion that God might look at our bank statements on the Day of Judgement and say something like, "well, I can see you had a standing order to Tearfund... Good, good.... But what is this? Regularly saving to a government endorsed tax efficient saings account? To hell with you!"

Rather, i think that the secrets of our hearts will be opened, and those who loved money more than God will find themselves at the stern end of His gaze. The form thismloving money might take will differ from person to person. Even those without the means to squirrel money away from the tax man are capable of loving money.

Posted by Anglican't (# 15292) on :

Perhaps I'm just feeling mischievous, but I can't help but think some of the earnest lefties on this thread have in some way contracted out their morality to George Osborne. If the Chancellor says someone on £x salary should pay £y tax, then the sin is avoided if £y is paid. But why is the sin not avoided if £y-100 is paid, or if £y+100 is paid.

Posted by Barnabas62 (# 9110) on :

Well, one of the ways I'm going to avoid inheritance tax is to give money and property to my children, grandchildren and charitable causes in advance of dying. This might run the risk of not being able to support long term care for myself or my wife in great old age (which I guess might be judged to be irresponsible) and it might be seen as a way of avoiding the Jubilee principle re the social consequences of inherited wealth.

That's just one example of the double and triple effects involved in tax avoidance and the moral issues are very cloudy. The legal position (avoidance v evasion) is dynamic; a race between legislators closing what they see as loopholes and smart accountants working out how to make use of the law as it stands.

I think at the level of basic principle, it is as silly to promote envy as it is to encourage greed. How that works out in practice in a world of increasingly complex taxation laws is anyone's guess. I'm taking my gran's advice. "Do the best you can, you won't go wrong that way." What's best? That always requires work.

Posted by Doc Tor (# 9748) on :

quote:
Originally posted by Barnabas62:
Well, one of the ways I'm going to avoid inheritance tax is to give money and property to my children, grandchildren and charitable causes in advance of dying. This might run the risk of not being able to support long term care for myself or my wife in great old age (which I guess might be judged to be irresponsible) and it might be seen as a way of avoiding the Jubilee principle re the social consequences of inherited wealth.

In such circumstance, I would expect that your children use their new-found wealth to look after you.

I've had conversations with my parents along similar lines, the upshot of which is - it's their money, they can do what they like with it. If they need to sell the house etc to pay for long term care, then that's absolutely fine by me, and while it would be nice to have enough money to pay for the funeral, it's not necessary.

Posted by Sergius-Melli (# 17462) on :

quote:
Originally posted by Jade Constable:
If I earnt over that yearly allowance, I would pay income tax whether I was a student or not.

Are you sure about this Jade? As a full-time student with seasonal work I used to earn over the personal allowance and enjoyed every August receiving my tax rebate for the tax which had been taken from me by the government... as a student I only ever paid NI contributions and no Income Tax...

There are a couple of general points to make:

1. We are having a discussion on the basis that our earnings are the property of the state, are they really?

2. We are also having a discussion that seems to be based on a belief that companies only pay tax on their profits... companies also pay tax through N.I. contributions, VAT, fuel duties, administrative/regulatory charges, business rates, etc. etc. etc. Companies not only pay employee wages but already pay a huge amount of tax income to the state through a variety of other means, eventually it has to be said enough is enough.

Posted by Penny S (# 14768) on :

I do think it is interesting that the episode of rendering to Caesar is interpreted in such opposite ways according to the politics of the interpreter.

It has just occurred to me that there is a further aspect to the interpretation than trying to work out exactly what Jesus meant as he cleverly got out of the trap laid for him, and that is what the gospel writers intended when they recorded it. I'm not sure where that thought goes...

Do what the state wants you to do...
Let the state think you will do what the state wants you to do...
Think the state has no business wanting you to do anything contrary to God...

(Are you reading this in Cheltenham? Mind your own business...)

Posted by deano (# 12063) on :

If an individual "wastes money" it passes to someone else for them TP have a go with.

If an individual makes a "bad investment" that money passes to someone else for them to have a go with.

Money is like energy... it can't be destroyed, only transformed.

But is it worth explaining these things. As a state teacher once said to me when discussing her pupils "Oh well... you can't educate pork". Right before she left to work for a large pharmaceutical company.

Posted by malik3000 (# 11437) on :

quote:
Originally posted by Jade Constable:

quote:
Originally posted by Gee D:
Jade Constable, I know all that. I repeat - you avoid paying tax because you have chosen to be a full-time student and thereby do not have an income over the tax threshold. A very simple point. As I said many posts ago, I very much doubt that your intention in being a full-time student was to avoid paying tax, but that is a natural consequence of your decision, none the less.

I do NOT avoid paying income tax because I am a full-time student. I only avoid paying income tax by having an income under the yearly allowance (and people hardly choose to have a low income on purpose). If I earnt over that yearly allowance, I would pay income tax whether I was a student or not. And yes, there are full-time students who have an income over the yearly allowance (via part-time jobs), I'm just not one of them.

It's hard to make some folks understand this. I add my [brick wall]

to yours.

Posted by Gee D (# 13815) on :

Malik 3000 , can I put it like this. If anyone chooses not to work, they have avoided paying the tax they would have paid had they chosen to work. Jade Constable is one such person.

Posted by Russ (# 120) on :

quote:
Originally posted by Demas:
[QUOTE]feel-good narcissism where we make ourselves feel more moral by attacking the perceived sins of others.

Particularly the rich...

On the main point, recall that sin is harmful in two ways - in the consequences for the others who are hurt or trespassed against thereby, and in our own hearts where the intention to sin damages our relationship with God.

So the first half of the question is whether tax avoidance has harmful consequences. If you see government spending as typically going to benefit the poor, and private spending as typically going to benefit rich corporations that manufacture expensive luxuries, then giving money to the government may seem more moral. But that's an effect of those over-simplified economic assumptions. Avoiding taxes and giving the money saved directly to a worthy cause would seem a better thing to do, from a consequentialist perspective.

In terms of internal intent, a fixation with minimising taxes seems like an expression of love of money, and we know what that is supposed to be the root of. But other motivations are possible. Having more money so as to give one's family a better diet or a life richer in cultural pursuits seems like a good intention. Petty revenge - getting back at the State in a small way for all the things it does wrong that we feel powerless to do anything about - is the sort of thing where we need to let go and forgive. Those of us who live there don't need condemnation, we need encouragement to magnanimity.

So I guess that's a definite maybe on whether it's sinful.

Best wishes,

Russ

PS: similarly, what are we assuming that Jade would be doing if she wasn't a student ?

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Gee D:
Malik 3000 , can I put it like this. If anyone chooses not to work, they have avoided paying the tax they would have paid had they chosen to work. Jade Constable is one such person.

No, Jade has decided to gain an education. She is not avoiding tax, she could be said to be deferring tax until after graduation. The benefit of her education is likely to either a) provide a service for the community (eg: if she goes into teaching - though I've no idea what she's studying) which would be supported by tax income or b) result in her earning above average wages and hence paying more in tax once she graduates. In the good old days, those were perfectly good arguments for government to subsidise higher education - the subsidy gave people the education needed for vital social roles and resulted in more tax income (thus paying for the grants). In many countries, those are still good arguments for state support of higher education.

Posted by Gee D (# 13815) on :

Alan Cresswell, I totally support the support which governments give to higher education. My parents and I benefitted from such support when I received what was called a Commonwealth Scholarship 49 years ago, and my sisters before that - although an associated means test meant that in our cases the scholarship only covered fees and did not provide any living allowance. In fact, the granting of a scholarship largely played the role now taken by quotas and other entrance restrictions*. And yes, Jade will be paying tax in the future, once she obtains employment. And as I said before, I am very doubtful that the present avoidance of paying tax played any part in Jade's decision to undertake full time study.

It may be that a person in future pays more tax from having received such benefit - although if you compare the incomes of teachers (university trained) with electricians and carpenters (trained in an apprenticeship and here receiving extremely limited government benefits) you might have some doubts.

To go back to what Demas said, often government taxation policy often is to encourage avoidance of tax liability so as to direct investment in particular directions. The instances I gave of our activities are good examples of that. Equally, so is Jade's. Neither Jade or we are being immoral.

* Back then, a student who matriculated but did not obtain a scholarship could theoretically pay fees. I knew only 1 person in that category.

[ 30. June 2013, 10:16: Message edited by: Gee D ]

Posted by Augustine the Aleut (# 1472) on :

quote:
Originally posted by Gee D:
Malik 3000 , can I put it like this. If anyone chooses not to work, they have avoided paying the tax they would have paid had they chosen to work. Jade Constable is one such person.

Or perhaps one could say that, by choosing to work as a bureaucrat rather than as a corporate manager (a choice I had on one occasion), I was avoiding paying as much tax as I could have. Clergy, then, as among the most poorly-paid for their education, must be chastized for avoiding the tax that they could have paid if they had but been investment bankers!

Posted by DouglasTheOtter (# 17681) on :

You do what conscience tells you to do.

In my view, people like Google, Vodafone et al are chiselling little sneaks (I'm being polite) for using the various loopholes in tax law as they do, but it's perfectly legal and is thus the responsibility of HM Treasury to close said loopholes. That they choose to avail themselves of them does, in my opinion, speak volumes about where the corporate conscience behind such pious mummery as 'do no evil' actually lies.

Posted by Gee D (# 13815) on :

Augusstine, exactly. Equally, someone with ample resources could choose to convert them all to cash rather than invest it, and live from capital without paying tax. Is that immoral?

Posted by Ricardus (# 8757) on :

quote:
Originally posted by Gee D:
Malik 3000 , can I put it like this. If anyone chooses not to work, they have avoided paying the tax they would have paid had they chosen to work. Jade Constable is one such person.

But I don't think anyone in the entire universe defines 'tax avoidance' like that. So your argument is trivially true but irrelevant.

Tax avoidance is AIUI one of two things:

- Making use of a tax break that is intended to compensate for some kind of economic disbenefit without actually suffering that disbenefit;

- Making use of a tax break that is intended to encourage certain behaviour without actually carrying out that behaviour.

In the UK it will always be unenforceable because our laws are not framed in terms of intent, i.e. the law is what's on the statute books, not what the legislators intended to be on the statute books.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Ricardus:
[QUOTE]But I don't think anyone in the entire universe defines 'tax avoidance' like that. So your argument is trivially true but irrelevant.

Tax avoidance is AIUI one of two things:

- Making use of a tax break that is intended to compensate for some kind of economic disbenefit without actually suffering that disbenefit;

- Making use of a tax break that is intended to encourage certain behaviour without actually carrying out that behaviour.

In the UK it will always be unenforceable because our laws are not framed in terms of intent, i.e. the law is what's on the statute books, not what the legislators intended to be on the statute books.

That example may be trivial, but points up the absurdity of a blanket condemnation of tax avoidance. Other examples Demas and I have given (some of my own behaviour) are nowhere near as trivial, and so far, no-one has tackled the question of whether they be immoral or not.

As to the balance of your post - the words of the legislation express what Parliament intended. If Parliament intends that particular behaviour be proscribed, then it is up to Parliament clearly to set out that intention. How else is intention to be discerned?

I've not kept up to date with the latest principles of statutory interpretation in England (Scots law is out on its own), but recent changes her expressly permit resource to the second reading speech on introduction of legislation as a guide to the proper interpretation. This principle of interpretation applies equally to your indent points. If Parliament intends that either a detriment be actually suffered or particular actions be carried out, it should express its intention.

Posted by Dafyd (# 5549) on :

quote:
Originally posted by deano:
Money is like energy... it can't be destroyed, only transformed.

There is such a thing as inflation.
Money is worthless in itself. It's only worth something when it's used in exchange for goods and or services.

Posted by Anglican't (# 15292) on :

quote:
Originally posted by Gee D:
I've not kept up to date with the latest principles of statutory interpretation in England (Scots law is out on its own), but recent changes here expressly permit resource to the second reading speech on introduction of legislation as a guide to the proper interpretation. This principle of interpretation applies equally to your indent points. If Parliament intends that either a detriment be actually suffered or particular actions be carried out, it should express its intention.

Yes, in Pepper v Hart.

[ 01. July 2013, 11:18: Message edited by: Anglican't ]

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Gee D:
That example may be trivial, but points up the absurdity of a blanket condemnation of tax avoidance.

It points up the absurdity of your idiosyncratic usage of the term "tax avoidance."

Every morning when I drive to work I end up in a town other than Tewksbury. It's not because I'm avoiding Tewksbury - it's because the company I work for isn't located in Tewksbury. My non-presence in Tewksbury is entirely incidental to my daily decision of where to point my car; I am not engaging in "Tewksbury avoidance."

Posted by Gee D (# 13815) on :

quote:
Originally posted by Anglican't:
Yes, in Pepper v Hart.

Thanks - it all comes back now, although it's years since I referred to it. The principle is embodied in the Interpretation Act 1987 (NSW) and similar legislation in other States.

Dave W - we drove through Tewkesbury once and I can't think why anyone would avoid it. A lovely town. More seriously (and while I understand your argument, do not agree with it in this context) what do you say about the other examples where I have taken positive action to avoid or minimise tax.

[ 01. July 2013, 12:00: Message edited by: Gee D ]

Posted by Enoch (# 14322) on :

quote:
Originally posted by Gee D:
... Dave W - we drove through Tewkesbury once and I can't think why anyone would avoid it. A lovely town. ...

Except when it's under water.

Posted by Augustine the Aleut (# 1472) on :

quote:
Originally posted by Gee D:
Augusstine, exactly. Equally, someone with ample resources could choose to convert them all to cash rather than invest it, and live from capital without paying tax. Is that immoral?

If they do so with the explicit and primary intent of avoiding the sharing of the burden to achieve the common good, likely immoral. If they do so with the explicit and primary intent of (say) avoiding the financing of an unjust war or an ungodly régime, likely not. If they're really not sure why, they should counsel with their confessor in case they might be committing the sin of accidie.

Posted by Demas (# 24) on :

So in the end tax avoidance is like everything else? Potentially sinful depending on the circumstances and intent?

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Demas:
So in the end tax avoidance is like everything else? Potentially sinful depending on the circumstances and intent?

Not really, unless someone can explain why the right thing to ever do with the fruit of your labor is to hand it over to some politician when you don't have to.

Posted by Erroneous Monk (# 10858) on :

One of the biggest mistakes people make is thinking that corporation tax is paid by someone/something other than individuals. CT is just a way of advancing the timing of the cash inflow for HMT by taking some of it off the company before it gets distributed to employees and owners.

If CT were zero, more would get distributed to employees and owners and taxed on them (at a higher rate). It strikes me as a little sad when people rail at companies to pay more tax, as if, somehow, it would make them - or even society as a whole - better off. It wouldn't. Over time, it would have no effect at all, except the initial effect of the time value of money.

Right now, the lower CT can go, the better for everybody, as far as I can see.

Posted by Augustine the Aleut (# 1472) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Demas:
So in the end tax avoidance is like everything else? Potentially sinful depending on the circumstances and intent?
Not really, unless someone can explain why the right thing to ever do with the fruit of your labor is to hand it over to some politician when you don't have to.

Nobody is suggesting that paying taxes is a voluntary activity, as in handing it over when you don't have to.

First, what we have is not always the fruit of our labour-- interest from inherited wealth, money from scams, gambling, etc -- are generally also included in taxable income.

Second, it is more economical than having to hire our own private armies, road crews, and so forth, and a practical way of securing such services when we are 9 or 99, and not able to arrange them ourselves.

A third point, of course, and one which annoys most of my relatives, is that in most western societies, taxes go to the states we have designed or agreed to live in. And the politicians, sad to say, are us-- the Klingons did not impose them on us. This does not apply, of course, to places such as Cuba, Kazakhstan, and China where there is precious little choice in such matters.

And we should always bear in mind that there are places which do not levy taxes, should we choose to live in Somalia with its sandy beaches and gardens laden with fruit trees. With the absence of CCRA, IRS or PAYE, I am surprised that more of my libertarian acquaintances do not move there.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Jade Constable:
But aren't ISAs used by people actively seeking to not pay taxes on their savings? Saving is a good thing of course, but so is paying tax....

ISAs, of course, are a tax-exempt savings/investment vehicle created by the government to encourage long-term saving and investment by people of relatively modest means. Not paying tax on their contents is the entire point of an ISA - it's only tax avoidance in the most trivial, useless sense of the expression.

There seem to be some people on this thread trying to make the case that if tax avoidance is sinful, then anything short of working every waking hour and transferring your entire paycheck to the government is a sin.

This is silly.

I am, as is often the case, reminded or Sir Terry's brand of incisive wit.

"No one, Jason, no matter what, no, not even if they thought they heard someone shouting for help, no one - are you paying attention, Jason? - is to open the door of the Stationery Cupboard, or accidentally fall on the door handle so that it opens, or threaten to steal Richenda's teddy bear unless she opens the door of the Stationery Cupboard, or be standing nearby when a mysterious wind comes out of nowhere and blows the door open all by itself, honestly, it really did, or in any way open, cause to open, ask anyone else to open, jump up and down on the loose floorboard to open or in any other way seek to obtain entry to the Stationery Cupboard, Jason!"--Thief of Time, Terry Pratchett.

Don't be Jason.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Augustine the Aleut:
Nobody is suggesting that paying taxes is a voluntary activity, as in handing it over when you don't have to.

Unless one engages in all legal tax avoidance then, yes, they are handing it over when they don't have to.

Posted by DouglasTheOtter (# 17681) on :

I don't think it helps if paying taxes is seen as 'handing over money to some politician.' At the moment, I'm fairly clear that, as a UK resident, my taxes pay for a health service that I support utterly and a range of other social programmes and benefits that, again, I support wholeheartedly. Were I to try and avoid this payment or in some way grudged it, my right to use these services at some point in the future would clearly be morally circumscribed.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Gee D:
[QUOTE]That example may be trivial, but points up the absurdity of a blanket condemnation of tax avoidance. Other examples Demas and I have given (some of my own behaviour) are nowhere near as trivial, and so far, no-one has tackled the question of whether they be immoral or not.

EVERYONE has tackled the question-- that's what the entire thread has been about. Yes, as has been said time & time again, it's a complex and complicated question-- and that's why it's a worthy discussion. "Blanket" condemnations are absurd for exactly the same reason blanket condemnations of pretty much any behavior are absurd-- because life is complicated, people are complicated, motives are complicated. But the fact that morality doesn't fall into neat and tidy black-and-white lines does not mean the pursuit of morality is not worthy-- simply that it is, like most everything worthwhile, complex.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by DouglasTheOtter:
I don't think it helps if paying taxes is seen as 'handing over money to some politician.' At the moment, I'm fairly clear that, as a UK resident, my taxes pay for a health service that I support utterly and a range of other social programmes and benefits that, again, I support wholeheartedly. Were I to try and avoid this payment or in some way grudged it, my right to use these services at some point in the future would clearly be morally circumscribed.

No it wouldn't. Tax avoidance is nothing more than finding out what you are really required to pay and paying it. It is being aware and acting accordingly. Your using services is no more morally circumscribed than expecting to be able to, say, go in to the theater to see a movie because you didn't pay more than the price of the ticket.

Posted by DouglasTheOtter (# 17681) on :

I'm going to have to quibble with that. Using tax loopholes, in the sense of glaring holes that would have been closed had legislators legislated more effectively isn't moral or ethical. It is, in my opinion, wrong. That can be justified if the government are, say, carrying out genocide against its citizens or committing crimes against humanity but, in other circumstances, I think it's harder to justify.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by DouglasTheOtter:
I'm going to have to quibble with that. Using tax loopholes, in the sense of glaring holes that would have been closed had legislators legislated more effectively isn't moral or ethical. It is, in my opinion, wrong. That can be justified if the government are, say, carrying out genocide against its citizens or committing crimes against humanity but, in other circumstances, I think it's harder to justify.

Governments that are carrying out genocide and committing crimes against humanity and you are judging its effectiveness by looking at tax legislation?

Posted by DouglasTheOtter (# 17681) on :

Not in isolation, no, but certainly in the context of what is under discussion.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by DouglasTheOtter:
Not in isolation, no, but certainly in the context of what is under discussion.

Ok. To say tax avoidance is a sin is to say that once you calculate what your tax is you should pay even more. I'm not aware of anyone doing that on their sales tax, property tax, groceries, gasoline, utilities, clothes, etc., and have yet to see a reason why income taxes would be any different.

Posted by Gwai (# 11076) on :

One could say that calculating one's taxes using loopholes was like taking advantage of a cashier who accidentally forgot to bill one for an item. I think many people would do both, but I doubt few people think either is perfectly ethical when not discussing their own conduct.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Gwai:
One could say that calculating one's taxes using loopholes was like taking advantage of a cashier who accidentally forgot to bill one for an item. I think many people would do both, but I doubt few people think either is perfectly ethical when not discussing their own conduct.

One would accurately say, though, that calculating their tax using so-called "loopholes" meant that they read the instructions and had a clue what they were doing. It isn't the cashier forgetting to ring something up, it is you using your 50 cents off coupons.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by DouglasTheOtter:
I don't think it helps if paying taxes is seen as 'handing over money to some politician.' At the moment, I'm fairly clear that, as a UK resident, my taxes pay for a health service that I support utterly and a range of other social programmes and benefits that, again, I support wholeheartedly. Were I to try and avoid this payment or in some way grudged it, my right to use these services at some point in the future would clearly be morally circumscribed.
No it wouldn't. Tax avoidance is nothing more than finding out what you are really required to pay and paying it. It is being aware and acting accordingly. Your using services is no more morally circumscribed than expecting to be able to, say, go in to the theater to see a movie because you didn't pay more than the price of the ticket.

A related point is the campaigns of many political parties to reduce taxes. There is a simple arithmetic; the government administers our money to supply the needs of a civilised society - quality health care free at the point of need, quality education for all, a justice system that works with law enforcement and criminal rehabilitation to support it, benefits to all who need them so that no one needs die for lack of basic human needs, etc. The government therefore needs money to supply those services, supplied through the tax system.

When politicians get elected on a platform of reduced taxation then those who vote for reduced taxes are defacto voting to reduce the money we as a society spend on the needs of our society. Yes, there often is scope for savings that don't affect services. But, in most cases, those savings reduce the quality of service to society. Then our society descends to something less civilised; quality health care becomes increasingly the preserve of those who can afford it, quality education becomes less available in areas where parents are less able to prop up the schools with support for new equipment, the legal system contends with more cases for less money and mistakes become more frequent, prisons become places to lock offenders away for the duration of their sentence rather than places to rehabilitate and reduce re-offending.

Voting for politicians who reduce your tax burden is another form of tax avoidance. And, the same moral questions are there. In fact, the moral questions are probably even more evident. It is when we stand in the privacy of the voting booth deciding which name to put our mark next to that we face some of the biggest moral questions in our society.

Posted by Gwai (# 11076) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Gwai:
One could say that calculating one's taxes using loopholes was like taking advantage of a cashier who accidentally forgot to bill one for an item. I think many people would do both, but I doubt few people think either is perfectly ethical when not discussing their own conduct.
One would accurately say, though, that calculating their tax using so-called "loopholes" meant that they read the instructions and had a clue what they were doing. It isn't the cashier forgetting to ring something up, it is you using your 50 cents off coupons.

In my comparison, the cashier corresponds to the government. The person who doesn't tell the cashier they screwed is the one who is the tax payer (or tax not payer.)

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Gwai:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Gwai:
One could say that calculating one's taxes using loopholes was like taking advantage of a cashier who accidentally forgot to bill one for an item. I think many people would do both, but I doubt few people think either is perfectly ethical when not discussing their own conduct.
One would accurately say, though, that calculating their tax using so-called "loopholes" meant that they read the instructions and had a clue what they were doing. It isn't the cashier forgetting to ring something up, it is you using your 50 cents off coupons.
In my comparison, the cashier corresponds to the government. The person who doesn't tell the cashier they screwed is the one who is the tax payer (or tax not payer.)

That doesn't correspond to tax avoidance, though, but to tax evasion.

Posted by Gwai (# 11076) on :

Does one have a legal obligation to tell the cashier that he failed to ring up a particular item? I would have thought not, and if not then its avoidance.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Alan Cresswell:

Voting for politicians who reduce your tax burden is another form of tax avoidance. And, the same moral questions are there.

No, I don't agree. "Tax avoidance" via the exploitation of unintended loopholes, arcane accounting structures and so on, is clearly evading the spirit of the law, even if it manages to obey the letter of the statute.

Voting for a political party that has different spending priorities from Alan Cresswell is not the same. Voting for a political party that wants to reduce the number of things done by government is not the same.

Yes, of course there are moral questions attached to who you vote for, and what things governments should do, but they are not the same as the ones attached to tax avoidance.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Gwai:
Does one have a legal obligation to tell the cashier that he failed to ring up a particular item? I would have thought not, and if not then its avoidance.

If I know about it it isn't avoidance. It is shoplifting. Avoidance would be taking advantage of sales, coupons, comparisons with other stores, and the like. You appear to still be treating avoidance and evasion as the same. They are not. If I fail to take advantage of every avoidance technique, I have failed my client. If I, to follow your example, fail to report all known taxable income and treat it in accordance with the tax law then we are looking at evasion.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Mere Nick:
If I know about it it isn't avoidance. It is shoplifting. Avoidance would be taking advantage of sales, coupons, comparisons with other stores, and the like.

Taking advantage of 2-for-1 coupons and the like is the equivalent of sheltering your savings from tax in a tax-exempt retirement savings account, for example.

Exploiting unintended loopholes, routing all your sales through an unstaffed "head office" in the Caribbean and the like is the equivalent of noticing that the 54" TV has been priced at 99 (cents, pence, whatever) by mistake, and buying ten of them.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Leorning Cniht:

Exploiting unintended loopholes, routing all your sales through an unstaffed "head office" in the Caribbean and the like is the equivalent of noticing that the 54" TV has been priced at 99 (cents, pence, whatever) by mistake, and buying ten of them.

I can't blame someone for choosing to walk home through a safe neighborhood instead of a dangerous one.

Posted by DouglasTheOtter (# 17681) on :

Nor can I, but that isn't the issue.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by DouglasTheOtter:
Nor can I, but that isn't the issue.

It is for anyone with a fiduciary responsibility for someone else.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Alan Cresswell:

When politicians get elected on a platform of reduced taxation then those who vote for reduced taxes are defacto voting to reduce the money we as a society spend on the needs of our society. Yes, there often is scope for savings that don't affect services. But, in most cases, those savings reduce the quality of service to society. Then our society descends to something less civilised; quality health care becomes increasingly the preserve of those who can afford it, quality education becomes less available in areas where parents are less able to prop up the schools with support for new equipment, the legal system contends with more cases for less money and mistakes become more frequent, prisons become places to lock offenders away for the duration of their sentence rather than places to rehabilitate and reduce re-offending.

Voting for politicians who reduce your tax burden is another form of tax avoidance. And, the same moral questions are there. In fact, the moral questions are probably even more evident. It is when we stand in the privacy of the voting booth deciding which name to put our mark next to that we face some of the biggest moral questions in our society.

spot on.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by Alan Cresswell:

Voting for politicians who reduce your tax burden is another form of tax avoidance. And, the same moral questions are there.
No, I don't agree. "Tax avoidance" via the exploitation of unintended loopholes, arcane accounting structures and so on, is clearly evading the spirit of the law, even if it manages to obey the letter of the statute.

I wasn't aware that there was much in the way of 'arcane structures' in the form of tax avoidance that the likes of Christian Aid have been campaigning against. It's usually simply having the parent company registered in a country with relatively low taxation, and setting up subsidiary companies in the countries where the majority of the business takes place. Then by routing payments such that those subsidiary companies make very little profit ensuring the majority of the profits are taxed by the smallest amount. It's relatively straight forward.

Unintended loopholes are irrelevant in the big picture, they tend to be closed very quickly.

quote:
Yes, of course there are moral questions attached to who you vote for, and what things governments should do, but they are not the same as the ones attached to tax avoidance.

They are not always the same moral questions, I agree. But, every election time we get the same rhetoric from the politicians. "We will reduce income tax", "we will freeze council tax", "we will increase the ISA allowances". Whether to let that rhetoric influence your vote is exactly the same moral question as whether to invest in an ISA or an account that will incur tax, or whether to relocate your corporate offices to another nation with lower tax rates. It's saying "I consider the possibility of a little bit more in my pocket to be important".

And, for those who find questions of funding for health services or schools to be the fundamental issues, we still have to recognise that that those questions carry a tax implication. And, so, we still face the moral question of what we consider a fair level of taxation - and, if we consider the rate we'd need to pay under the current system to be unfair how best to vote for a fairer system.

Posted by Martin PC not & Ship's Biohazard (# 368) on :

I'd vote for you Alan.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Alan Cresswell:

A related point is the campaigns of many political parties to reduce taxes. There is a simple arithmetic; the government administers our money to supply the needs of a civilised society - quality health care free at the point of need, quality education for all, a justice system that works with law enforcement and criminal rehabilitation to support it, benefits to all who need them so that no one needs die for lack of basic human needs, etc. The government therefore needs money to supply those services, supplied through the tax system.

That, and the rest of your post, makes excellent sense. For the last 25 years or more, the major political parties here, and at both state and federal levels, have campaigned on programmes of lower taxes. There has been an inevitable rundown in public services. Indeed, a half dozen years ago there was a substantial surplus in Federal finds. Was that used on some vital infrastructure projects? New railway lines? New hospitals? No, it was given back to taxpayers, and there was an election shortly thereafter. We took the bribe money and voted for the opposition Labour party - as we would have in any event.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Alan Cresswell:

Unintended loopholes are irrelevant in the big picture, they tend to be closed very quickly.

Seriously? Is that really true in your part of the world? Sure makes me envious-- that is very much not the case in the US. In fact, any explicit attempt at closing unintended loopholes (where the loophole is named) generally gets framed as "raising taxes" with all the usual hue & cry. In theory everyone says they want to "get rid of the pork and special interests" but the minute you start naming the loophole it turns out that one isn't really "pork"-- at least not for those who benefit from it.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Alan Cresswell:
I wasn't aware that there was much in the way of 'arcane structures' in the form of tax avoidance that the likes of Christian Aid have been campaigning against.

I would classify routing your income through a shell holding company in a low-tax jurisdiction which "owns" your intellectual property and licenses it to you as an "arcane structure".

As for the morality of taxation, there are plenty of questions to answer. I find it profoundly immoral, for example, that people can face a marginal effective tax rate of greater than 90%, but I am currently unable to vote for anyone who will fix the withdrawal rate of benefits so that that doesn't happen.

Posted by Demas (# 24) on :

It seems to me we have two intertwined themes here - firstly the old, roughly left/right, discussion on the utility of government spending (is more necessarily better?) and secondly a discussion on the nature of law and how it works in the context of tax law interpretation.

On the second I'm seeing a quite stark distinction between lawyers and non-lawyers, which is quite fascinating.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Demas:
It seems to me we have two intertwined themes here - firstly the old, roughly left/right, discussion on the utility of government spending (is more necessarily better?) and secondly a discussion on the nature of law and how it works in the context of tax law interpretation.

I see it as two distinct, but fairly simple questions. There's the old lefty-righty how much should we spend on services and social programmes question, and there's a question of, for a given tax take, is the tax burden distributed equitably - in other words, are you paying your fair share?

If you fall towards the left of the spectrum, it is easy to view someone who uses loopholes, creative corporate structures and the like to pay less tax than he "should" as stealing from widows and children by virtue of reducing the total tax take, but I think it's just as reasonable to complain that such a person isn't paying his fair share, and so ultimately increasing the burden on the other taxpayers, and this latter argument is true whether or not you think we need to spend more money on starving children, healthcare, aircraft carriers or any of the other things governments buy.

Posted by malik3000 (# 11437) on :

quote:
Originally posted by Alan Cresswell:
There is a simple arithmetic; the government administers our money to supply the needs of a civilised society - quality health care free at the point of need, quality education for all, a justice system that works with law enforcement and criminal rehabilitation to support it, benefits to all who need them so that no one needs die for lack of basic human needs, etc. The government therefore needs money to supply those services, supplied through the tax system.

Wow, is that what a civilized society is supposed to be about?! [Eek!]

And here I thought I was living in the best country in the world! (Or maybe civilization is just something for effete weaklings with low testosterone.)

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by malik3000:
(Or maybe civilization is just something for effete weaklings with low testosterone.)

And perhaps civilisation has nothing to do with testosterone.

I still think a lot of people here are missing the point. Continually to ask, "Is this a sin ... or is this? - Can I get away with this but not this? Can I put my foot this close to the line without being called on it, and how far can I bend this rule without being deemed to have broken it?"

- All of that is precisely what Jesus was denouncing when he denounced the Pharisees. Their attitude was, the Law is the Law, but how can I work it to my advantage? And I think that's exactly why Jesus accused them of neglecting the weightier matters of the Law, like justice and mercy. He wanted people to get away from the attitude of "how little can I do, and yet comply with the Law?" and towards an attitude of "how much can I do, and go beyond the Law?"

The thing is, you can tithe mint and dill and cumin. You can measure them out to the last milligram and say, "There! That's my tithe." - At which point, of course, you give not one milligram more, and you go away feeling rather pleased with yourself because you think you've done what God asked.

But you can't tithe justice and mercy. They're intangible, unquantifiable, and precisely because of that they make the pharisaic mind uncomfortable. You can't do half an hour of justice and show twenty minutes of mercy and feel you've done what God asked.

So yes, you can spend hours every day working out how to shave a few more pence off your tax bill, and then go before a Parliamentary committee and claim, wide-eyed, not to have broken any laws. But the point for the Christian ethicist is not whether you've broken the law or not, but that you haven't learned to tell the difference between what's legal and what's right.

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Gee D:
Dave W - we drove through Tewkesbury once and I can't think why anyone would avoid it. A lovely town.

Never heard of it. I was talking about Tewksbury.

quote:
More seriously (and while I understand your argument, do not agree with it in this context) what do you say about the other examples where I have taken positive action to avoid or minimise tax.

I'd say that "taking positive action to avoid or minimize tax" could reasonably be called tax avoidance, while "taking an action completely without regard to tax implications" cannot. This is a distinction that would have to be more or less clear even before any discussion of ethics or morality; characterizing every choice whatsoever in terms of its tax implications dilutes the term "tax avoidance" beyond recognition.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Adeodatus:

quote:
Originally posted by malik3000:
(Or maybe civilization is just something for effete weaklings with low testosterone.)
And perhaps civilisation has nothing to do with testosterone.

I still think a lot of people here are missing the point. Continually to ask, "Is this a sin ... or is this? - Can I get away with this but not this? Can I put my foot this close to the line without being called on it, and how far can I bend this rule without being deemed to have broken it?"

- All of that is precisely what Jesus was denouncing when he denounced the Pharisees. Their attitude was, the Law is the Law, but how can I work it to my advantage? And I think that's exactly why Jesus accused them of neglecting the weightier matters of the Law, like justice and mercy. He wanted people to get away from the attitude of "how little can I do, and yet comply with the Law?" and towards an attitude of "how much can I do, and go beyond the Law?"

The thing is, you can tithe mint and dill and cumin. You can measure them out to the last milligram and say, "There! That's my tithe." - At which point, of course, you give not one milligram more, and you go away feeling rather pleased with yourself because you think you've done what God asked.

But you can't tithe justice and mercy. They're intangible, unquantifiable, and precisely because of that they make the pharisaic mind uncomfortable. You can't do half an hour of justice and show twenty minutes of mercy and feel you've done what God asked.

So yes, you can spend hours every day working out how to shave a few more pence off your tax bill, and then go before a Parliamentary committee and claim, wide-eyed, not to have broken any laws. But the point for the Christian ethicist is not whether you've broken the law or not, but that you haven't learned to tell the difference between what's legal and what's right.

Yes, yes, yes. Most helpful post so far. [Overused]

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Adeodatus:

So yes, you can spend hours every day working out how to shave a few more pence off your tax bill, and then go before a Parliamentary committee and claim, wide-eyed, not to have broken any laws. But the point for the Christian ethicist is not whether you've broken the law or not, but that you haven't learned to tell the difference between what's legal and what's right.

When people want to know what their tax is for a particular year they ask accountants, not Christian ethicists. They want to know someone competent is in their corner doing everything they can to protect their interests and they want to know how much to put on the check, if needed.

Posted by Gwai (# 11076) on :

But if they find themselves doing things that the pastoral figures they trust--I figure they are the main Christian ethicists in this world--all disapprove of, they should probably either get new pastoral figures or new accountants!

(Note this is not a comment about anyone in this thread. Rather I mean that though we may not ask our pastors to help with our taxes, most of us would listen if we did realize our pastors disapproved of the way we were doing them should.)

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Adeodatus:

So yes, you can spend hours every day working out how to shave a few more pence off your tax bill, and then go before a Parliamentary committee and claim, wide-eyed, not to have broken any laws. But the point for the Christian ethicist is not whether you've broken the law or not, but that you haven't learned to tell the difference between what's legal and what's right.
When people want to know what their tax is for a particular year they ask accountants, not Christian ethicists. They want to know someone competent is in their corner doing everything they can to protect their interests and they want to know how much to put on the check, if needed.

Which proves exactly what?

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by cliffdweller:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Adeodatus:

So yes, you can spend hours every day working out how to shave a few more pence off your tax bill, and then go before a Parliamentary committee and claim, wide-eyed, not to have broken any laws. But the point for the Christian ethicist is not whether you've broken the law or not, but that you haven't learned to tell the difference between what's legal and what's right.
When people want to know what their tax is for a particular year they ask accountants, not Christian ethicists. They want to know someone competent is in their corner doing everything they can to protect their interests and they want to know how much to put on the check, if needed.
Which proves exactly what?

Something along the lines of 2+2=4. Not 2+2=sin.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by cliffdweller:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Adeodatus:

So yes, you can spend hours every day working out how to shave a few more pence off your tax bill, and then go before a Parliamentary committee and claim, wide-eyed, not to have broken any laws. But the point for the Christian ethicist is not whether you've broken the law or not, but that you haven't learned to tell the difference between what's legal and what's right.
When people want to know what their tax is for a particular year they ask accountants, not Christian ethicists. They want to know someone competent is in their corner doing everything they can to protect their interests and they want to know how much to put on the check, if needed.
Which proves exactly what?
Something along the lines of 2+2=4. Not 2+2=sin.

But 2 + 2 = (or ≠) sin is what we're discussing. 2 + 2= 4 tells us only what we all already know: that most people like to avoid paying taxes. It does not tell us whether or not that desire is moral or ethical-- which is the question we're actually discussing.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by cliffdweller:
But 2 + 2 = (or ≠) sin is what we're discussing. 2 + 2= 4 tells us only what we all already know: that most people like to avoid paying taxes. It does not tell us whether or not that desire is moral or ethical-- which is the question we're actually discussing.

In the OP Sentamu says Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

Tax avoidance is nothing more than wisely considering and using the rules that determine how to pay Caesar to figure out how much to pay Caesar. I believe it is immoral and unethical for someone to use their position of authority in one realm to try and speak authoritatively about others areas in which they lack competence.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by cliffdweller:
But 2 + 2 = (or ≠) sin is what we're discussing. 2 + 2= 4 tells us only what we all already know: that most people like to avoid paying taxes. It does not tell us whether or not that desire is moral or ethical-- which is the question we're actually discussing.
In the OP Sentamu says Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

Tax avoidance is nothing more than wisely considering and using the rules that determine how to pay Caesar to figure out how much to pay Caesar. I believe it is immoral and unethical for someone to use their position of authority in one realm to try and speak authoritatively about others areas in which they lack competence.

An archbishop isn't qualified to speak about morality?

You seem to be confusing morality variously with legality, financial management, and popular opinion. It is none of those things. Whether the archbishop was right or wrong in his assessment is the subject of this thread-- obviously a complex & debatable matter, which is why it's made a good discussion. Whether or not morality is within his jurisdiction I would have thought to be indisputable.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by cliffdweller:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by cliffdweller:
But 2 + 2 = (or ≠) sin is what we're discussing. 2 + 2= 4 tells us only what we all already know: that most people like to avoid paying taxes. It does not tell us whether or not that desire is moral or ethical-- which is the question we're actually discussing.
In the OP Sentamu says Tax avoidance was "definitely a moral issue", the archbishop said and asked whether it was sinful, he replied: "It is sinful, simply because Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

Tax avoidance is nothing more than wisely considering and using the rules that determine how to pay Caesar to figure out how much to pay Caesar. I believe it is immoral and unethical for someone to use their position of authority in one realm to try and speak authoritatively about others areas in which they lack competence.
An archbishop isn't qualified to speak about morality?

You seem to be confusing morality variously with legality, financial management, and popular opinion. It is none of those things. Whether the archbishop was right or wrong in his assessment is the subject of this thread-- obviously a complex & debatable matter, which is why it's made a good discussion. Whether or not morality is within his jurisdiction I would have thought to be indisputable.

"Jesus was very clear; pay to Caesar what belongs to Caesar and to God what belongs to God."

Yet he also seems to be saying it's a sin to competently figure out Caesar's cut.

Posted by cliffdweller (# 13338) on :

OK, so you disagree with the archbishop. Fine. That's the basis of this discussion. But it's quite a different thing than suggesting that an archbishop is not competent to discuss morality. Disagreeing with you does not necessarily equal incompetence.

[ 02. July 2013, 18:13: Message edited by: cliffdweller ]

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by cliffdweller:
OK, so you disagree with the archbishop. Fine. That's the basis of this discussion. But it's quite a different thing than suggesting that an archbishop is not competent to discuss morality. Disagreeing with you does not necessarily equal incompetence.

Ok, fine. I believe the moral way to figure out how much tax to pay is to figure out how much tax to pay. He seems to think it is a sin. Maybe next we can ask him how many teeth are in a horse's mouth.

"In the year of our Lord 1432, there arose a grievous quarrel among the brethren over the number of teeth in the mouth of a horse. For thirteen days the disputation raged without ceasing. All the ancient books and chronicles were fetched out, and wonderful and ponderous erudition such as was never before heard of in this region was made manifest. At the beginning of the fourteenth day, a youthful friar of goodly bearing asked his learned superiors for permission to add a word, and straightway, to the wonderment of the disputants, whose deep wisdom he sore vexed, he beseeched them to unbend in a manner coarse and unheard-of and to look in the open mouth of a horse and find answer to their questionings. At this, their dignity being grievously hurt, they waxed exceeding wroth; and, joining in a mighty uproar, they flew upon him and smote him, hip and thigh, and cast him out forthwith. For, said they, surely Satan hath tempted this bold neophyte to declare unholy and unheard-of ways of finding truth, contrary to all the teachings of the fathers. After many days more of grievous strife, the dove of peace sat on the assembly, and they as one man declaring the problem to be an everlasting mystery because of a grievous dearth of historical and theological evidence thereof, so ordered the same writ down.

—Francis Bacon, 1592 (?)."

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by cliffdweller:
OK, so you disagree with the archbishop. Fine. That's the basis of this discussion. But it's quite a different thing than suggesting that an archbishop is not competent to discuss morality. Disagreeing with you does not necessarily equal incompetence.
Ok, fine. I believe the moral way to figure out how much tax to pay is to figure out how much tax to pay.

Have you read thru this thread at all? You are doing an injustice to some of the thoughtful issues that have been raised. Whether you agree with them or not, there are a number of valid and significant factors that have been discussed here, which your flippant dismissal completely discounts.

Posted by moonlitdoor (# 11707) on :

quote:

originally posted by Adeodatus

Continually to ask, "Is this a sin ... or is this? - Can I get away with this but not this? Can I put my foot this close to the line without being called on it, and how far can I bend this rule without being deemed to have broken it?"

Asking myself "is this a sin ... or is this ?" is how I go about deciding what is right and wrong. It's about what action I am comfortable with rather than what I can get away with. Some people who are strong supporters of some ism, whether political or some other school of thought, often have quite general principles which they find good for deciding right and wrong, but not everyone does. I don't, so looking at individual actions to see whether they cross my line is how I choose what to do.

Posted by Demas (# 24) on :

Assumptions of moral authority by Archbishops would be much more convincing if there was any sign that they had a working knowledge of the many and varied purposes of the tax system and the way in which it works.

In any case, since we should not tithe justice or mercy, you can increase the amount you pay to the state not only by merely arranging your affairs in the least tax effective manner possible (which would probably undermine the intent of the state in passing the tax legislation in the first place), but also by simply donating extra money to the Treasury. Do it today! It would be sinful not to.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Demas:
Assumptions of moral authority by Archbishops would be much more convincing if there was any sign that they had a working knowledge of the many and varied purposes of the tax system and the way in which it works.

Finally, someone who gets it.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Demas:
Assumptions of moral authority by Archbishops would be much more convincing if there was any sign that they had a working knowledge of the many and varied purposes of the tax system and the way in which it works.
Finally, someone who gets it.

Has anyone suggested that the Archbishop doesn't have a working knowledge of the tax system? He presumably doesn't know the details of every bit of legislation about what is, or is not, taxable and to what extent - that's what accountants specialising in tax are for. But, apart from those tax specialist accountants, who does - and even those accountants are probably as ignorant as I am of the equivalent tax legislation in other countries.

Put simply, if the archbishop needs that much knowledge to discuss the morality of taxation then by rights this thread should sink to the bottom of Purgatory as no one else here has the right to comment on the morality of taxation. And, all other threads in Purg would do the same if we apply the same level of "must have a working knowledge of specialist subject" criteria.

Posted by Gee D (# 13815) on :

Originally posted by Dave W.:

quote:
I'd say that "taking positive action to avoid or minimize tax" could reasonably be called tax avoidance, while "taking an action completely without regard to tax implications" cannot. This is a distinction that would have to be more or less clear even before any discussion of ethics or morality; characterizing every choice whatsoever in terms of its tax implications dilutes the term "tax avoidance" beyond recognition.

I'm afraid that my eye read the known Tewkesbury for the until-now-never-heard-of Tewksburys (there seem to be at least 2). My apologies.

As to the real substance of your post, it is getting some considerable distance along the path to a rational discussion of the real questions. But is all action taken deliberately immoral tax avoidance? There are actions taken deliberately and in accordance with the wishes of the relevant government. Demas gave the example of investment in the local film industry, and there are countless others. Back in 60s Britain, there were major tax benefits given to companies such as Rootes who set up manufacture in areas of Scotland where there was considerable unemployment. Similar benefits were given in Italy to those investing in the South. They are instances of avoidance of taxation liabilities had the investment been made elsewhere. Indeed, investment in traditional areas was probably more sensible. Were Rootes, Alfa Romeo and other immoral?

Or the example I gave of investment in our house, where any capital gains are not taxable. Is that deliberate action immoral?

[ 03. July 2013, 08:12: Message edited by: Gee D ]

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Demas:
donating extra money to the Treasury. Do it today! It would be sinful not to.

So some of the discussion on this thread would have us believe. I wonder how many of the "you're supposed to give as much as you can, not as little as you have to" posters voluntarily give more money to the taxman than they have to?

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Alan Cresswell:

Put simply, if the archbishop needs that much knowledge to discuss the morality of taxation then by rights this thread should sink to the bottom of Purgatory as no one else here has the right to comment on the morality of taxation. And, all other threads in Purg would do the same if we apply the same level of "must have a working knowledge of specialist subject" criteria.

If he is going to use his position and authority to speak on a matter then, yes, he should only use that position and authority to speak about things about which he actually has a clue. It would be a completely different matter if it was just a random pew warmer from his congregation giving an uninformed opinion about something.

This is about like an Amish preacher using his position to try and speak authoritatively about what kind of car I should buy.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Alan Cresswell:

Put simply, if the archbishop needs that much knowledge to discuss the morality of taxation then by rights this thread should sink to the bottom of Purgatory as no one else here has the right to comment on the morality of taxation. And, all other threads in Purg would do the same if we apply the same level of "must have a working knowledge of specialist subject" criteria.
If he is going to use his position and authority to speak on a matter then, yes, he should only use that position and authority to speak about things about which he actually has a clue. It would be a completely different matter if it was just a random pew warmer from his congregation giving an uninformed opinion about something.

This is about like an Amish preacher using his position to try and speak authoritatively about what kind of car I should buy.

But what exactly does it mean for the Archbishop to have sufficient knowledge? It seems to me that what is meant by those making this charge is that "the Archbishop doesn't know how to manipulate the tax code to economic advantage" and/or "the Archbishop is advocating a position I don't agree with (possibly because it would be disadvantageous to me"."

I don't know the Archbishop and am not part of his denomination, so I have no basis for determining his ability to make moral judgements. But the basis for such an assessment would be based on far different factors than what is being used here to discredit the man.

[ 03. July 2013, 14:25: Message edited by: cliffdweller ]

Posted by Jay-Emm (# 11411) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Demas:
Assumptions of moral authority by Archbishops would be much more convincing if there was any sign that they had a working knowledge of the many and varied purposes of the tax system and the way in which it works.
Finally, someone who gets it.
Has anyone suggested that the Archbishop doesn't have a working knowledge of the tax system? He presumably doesn't know the details of every bit of legislation about what is, or is not, taxable and to what extent - that's what accountants specialising in tax are for.

That argument looks like it would hold water for Rowan (I presume the 90:10 rule applies in some form)...with Justin it seems a bit redundant.

Posted by Jay-Emm (# 11411) on :

In fact I can't see where this supposed gnostic knowledge seems to be required to comment on the morality, we can always restrict our examination to the simple cases.
But considering say the Jimmy Carr (as the details are public and he's taken action)tax avoidance. It seems a 3 minute read gives sufficient evidence of the financial facts (enough to say e.g. that the excess money isn't going to the film industry) and the only debatable issues I can see are pure morality [or rather we can give the benefit of the doubt on the trickier financial ones, and the questions still remain].

A 5 minute think might give reasons why we can't blame the government for not closing the loophole (aside from the cynical), but then that's putting the emphasis back on him and suggesting the archbish is going one step deeper than the accountants here are arguing.

I'm also still not happy about the "doing what the customer wants" is the moral requirement, as a absolute claim it's been judged false (even including "and legal") since '45. So you then need to argue the case beyond that, if you wouldn't mind.

[ 03. July 2013, 17:32: Message edited by: Jay-Emm ]

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Alan Cresswell:

Put simply, if the archbishop needs that much knowledge to discuss the morality of taxation then by rights this thread should sink to the bottom of Purgatory as no one else here has the right to comment on the morality of taxation. And, all other threads in Purg would do the same if we apply the same level of "must have a working knowledge of specialist subject" criteria.
If he is going to use his position and authority to speak on a matter then, yes, he should only use that position and authority to speak about things about which he actually has a clue.

The thing is, to me it seems he does have a clue. He knows, for example, that several multinationals use legal means to move money around such that they a) reduce their total tax burden and b) pay more of that tax in nations where the government has less need for the revenue (naive assumption being if they needed more revenue tax rates would be higher). He also clearly recognises that in many cases this reduces the amount of tax multinationals pay in countries where they do considerable business, and those countries struggle to fund education, health care and other programmes that benefit their people. He then points out that the (perfectly legal) practices of these multinationals directly or indirectly affects the lives of the poor to their detriment. That is a moral issue. We don't need to know the intricacies of the various tax codes in question to recognise the moral question. We just need to see the effect these practices have on the poor.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Alan Cresswell:

Put simply, if the archbishop needs that much knowledge to discuss the morality of taxation then by rights this thread should sink to the bottom of Purgatory as no one else here has the right to comment on the morality of taxation. And, all other threads in Purg would do the same if we apply the same level of "must have a working knowledge of specialist subject" criteria.
If he is going to use his position and authority to speak on a matter then, yes, he should only use that position and authority to speak about things about which he actually has a clue.
The thing is, to me it seems he does have a clue. He knows, for example, that several multinationals use legal means to move money around such that they a) reduce their total tax burden and b) pay more of that tax in nations where the government has less need for the revenue (naive assumption being if they needed more revenue tax rates would be higher). He also clearly recognises that in many cases this reduces the amount of tax multinationals pay in countries where they do considerable business, and those countries struggle to fund education, health care and other programmes that benefit their people. He then points out that the (perfectly legal) practices of these multinationals directly or indirectly affects the lives of the poor to their detriment. That is a moral issue. We don't need to know the intricacies of the various tax codes in question to recognise the moral question. We just need to see the effect these practices have on the poor.

Exactly. Again, the cries of "incompetence" so far seem to be entirely synonymous with "He's saying something I don't like!"

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Jay-Emm:
I'm also still not happy about the "doing what the customer wants" is the moral requirement.

Well, I would say that clearly if a customer hires an accountant with the instructions "organise my finances so that my income is maximised" then, providing that organisation of finances is legal, the accountant is honour bound to do his best to so organise his customers finances. In many cases, though probably not all, that will include reducing tax liability. The question of morality lies at the feet of the customer seeking to maximise his profits, not the accountant who does what his client instructs.

On the other hand, an accountant advertising themselves as experts in ethical investing may find that the most ethical investments for his client involve increased tax liability, especially where that tax would be paid to governments of impoverished nations.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by Jay-Emm:
I'm also still not happy about the "doing what the customer wants" is the moral requirement.
Well, I would say that clearly if a customer hires an accountant with the instructions "organise my finances so that my income is maximised" then, providing that organisation of finances is legal, the accountant is honour bound to do his best to so organise his customers finances. In many cases, though probably not all, that will include reducing tax liability. The question of morality lies at the feet of the customer seeking to maximise his profits, not the accountant who does what his client instructs.

John Woolman famously had a very different take on this question.

Posted by moonlitdoor (# 11707) on :

quote:

originally posted by Alan Cresswell

b) pay more of that tax in nations where the government has less need for the revenue (naive assumption being if they needed more revenue tax rates would be higher).

I would say that assumption was not only naive but completely erroneous. Tax rates haven't got much to do with how much governments need the money.

I expect the archbishop probably does have enough knowledge to speak as he does. Certainly one shouldn't assume that his knowledge is restricted to what he is quoted in the press as saying.

But I have to take issue with this

quote:

We don't need to know the intricacies of the various tax codes in question to recognise the moral question. We just need to see the effect these practices have on the poor.

This seems to go right back to the blanket condemnation of all actions which don't maximise tax payments, which earlier everyone was denying was their point of view. The morality of the practices has to have something to do with the practices, not just to do with the effect on the poor.

Posted by malik3000 (# 11437) on :

quote:
Originally posted by Adeodatus:

quote:
Originally posted by malik3000:
(Or maybe civilization is just something for effete weaklings with low testosterone.)
And perhaps civilisation has nothing to do with testosterone.

I was being facetious. Contrary to the opinion of many on the east side of the Atlantic, some of us on the west side are capable of irony, even some living in this citadel of earnestness, the U.S.

As for the rest of your post, Amen!

[ 03. July 2013, 21:48: Message edited by: malik3000 ]

Posted by Jay-Emm (# 11411) on :

quote:
Moonlit door [on prev page]
This seems to go right back to the blanket condemnation of all actions which don't maximise tax payments, which earlier everyone was denying was their point of view. The morality of the practices has to have something to do with the practices, not just to do with the effect on the poor.

I don't think that follows. I mean in my view we have
A)
There's perfectly good means of cutting down tax because you're consciously doing more good elsewhere (e.g. a charity).
B)
There's perfectly good ways of cutting tax for being cheap, by taking actions (where presumably this has side effects that have benefit).
C)
There are illegal methods of cutting tax, (e.g. not declaring it at all), some people suggest this is also immoral.
D)
There are (various posters suggest) ways of minimising tax that fail to deliver what was intended, but fit the letter of the law (the people who sold a picture of an x-box on e-bay might be a commercial analogue). Again some people suggest this is immoral, others that it is moral, others that it doesn't exist.
E)
For completeness I think there are illegal ways of minimising tax while doing good,
F)
and illegal ways of maximising tax paid.
G)
There are (I assert in potential, and from casual experience in practice) numerous grey areas between each of these.

To decide if each of these is reasonable or not requires a child's understanding of the tax code. If I'm wrong it's not a lack of knowledge of the practices.
To decide their morality I can't see where the tax knowledge comes in, accountants ought to have thought about it more so one might expect them to be more likely to be right, but it's not their accountancy skills per se.

Some case studies may (in potential) be also (provisionally) categorised with that knowledge.
But I don't see how accountancy knowledge really helps apart from dividing AB&D from CE&F (which is an important skill, but not the one claimed). It might give a handy shortcut to using Economics/Sociology to determine the expected consequences.

And on to another topic (after yet another stupidly long post, hopefully someone else will have the bon motte, to say what I mean to say more concisely [which I think fulfils translation])

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by Jay-Emm:
I'm also still not happy about the "doing what the customer wants" is the moral requirement.
Well, I would say that clearly if a customer hires an accountant with the instructions "organise my finances so that my income is maximised" then, providing that organisation of finances is legal, the accountant is honour bound to do his best to so organise his customers finances. In many cases, though probably not all, that will include reducing tax liability. The question of morality lies at the feet of the customer seeking to maximise his profits, not the accountant who does what his client instructs.

Oh I quite agree it's definitely a factor. It's just a few of the posts (it's actually better on this thread, more especially on company responsibilities) seem to have it as the only factor to such a strength that it seems bizarre. It must be the right thing to do because..., and it makes me highly uneasy as an argument. The conclusion might be correct. But there clearly needs to be other leg work done to qualify it (or revolting other conclusions).

[ 03. July 2013, 21:47: Message edited by: Jay-Emm ]

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Marvin the Martian:
So some of the discussion on this thread would have us believe. I wonder how many of the "you're supposed to give as much as you can, not as little as you have to" posters voluntarily give more money to the taxman than they have to?

Well, I can't speak for everyone, but my point is not "you should pay as much tax as you can," but "you should pay the amount of tax determined by the application of the spirit of the law, rather than by exploiting loopholes".

So, from my point of view, the tax-free gains that Gee D makes on his house are entirely fair, because the legislation intentionally excludes gains on your home. If, on the other hand, Gee D owned several homes, and rotated his nominal residence between them in order to claim tax-exempt gains on them all, I'd call him immoral, even if he managed to obey the letter of the law.

Similarly, politicians flipping their primary residence back and forth in order to claim the largest possible sum in expenses are immoral, whether or not they are within the letter of the law.

Reducing your tax bill by making large charitable donations, or by placing your money in a tax-exempt retirement savings vehicle? Fine. Reducing your tax bill by becoming a wholly owned subsidiary of Marvin (Cayman Islands) Ltd., which owns the rights to the Marvin persona and leases them to you for large annual sums? Not so fine...

Posted by Cod (# 2643) on :

Some months ago I listened to a very interesting interview by an ex-City of London worker. Unfortunately I cannot remember his name, but I can clearly remember the point he made: specifically that the tax avoidance industry works in favour of the British economy.

Here's how it goes. Tarbucks, a worldwide purveyor of entertainment, earns income on various developed countries. In order to avoid tax, it creates trusts and incorporates various holding companies located for legal purposes in various sub-tropical islands nominally ruled by Britain or some other Western power. By doing this, Tarbucks is able to declare all income in the sub-tropical island, and by doing so avoid having to declare any income in the UK, the US or other similar country. As Alan has already pointed out, this is not arcane stuff. it is straight-forward tax planning.

However, establishing and administering this arrangement requires the services of expensive lawyers and accountants who are generally not located in the sub-tropical island. They are more likely to be found in Canary Wharf, near - and this is the important bit - where they live and spend their considerable disposable income.

Over the last couple of decades, this has worked well for the UK as it has resulted in an economic boom in the provision of financial services. The money lost through the avoidance of UK tax is actually offset by the money this industry generates to people living and working in London.

(I note as an aside, that the real losers as countries without financial centres, and third-world countries in particular).

All these rich people will, after all, pay some income tax, and given the size of their remuneration, it will be more than, say, a factory worker even if the effective rate of tax is much lower. They will also pay VAT on their expensive purchases. And leaving tax aside, the money they spend into the economy will have the effect of stimulating it, albeit in a non-egalitarian way. They will invest in new business. They will create property portfolios, thus driving up house prices and generating increased local rates. Once they have become sufficiently (ie, eyewateringly) rich, they may decide to "put something back" and establish charitable foundations for the improvement of the non-smelly poor.

What this illustrates is that John Sentamu is aiming at the wrong target. If you are a multinational in competition with other multinationals, it is foolhardy not to avoid tax, because failing to take steps to avoid it makes you less competitive. I prefer to think it is the responsiblity of governments to oversee the establishment of tax laws that require multinationals to pay tax where they, in reality, generated their profit.

Contrary to what many say, it would not be hard to legislate for this. Some countries, and NZ is one, have a general anti-avoidance law that allows the taxman to look through artificial arrangements such as the above, and tax according to the reality of the situation. There is therefore in this country, and some others, a legal distinction between tax mitigation (ie, minimising one's tax burden by using the tax laws as they were intended to be used) and tax avoidance.

Although this solution has posed a great many jurisprudential problems in theory, in practice it has ensured that taxpayers use the tax laws as they were intended to be used.

I suspect that the wholesale adoption of general anti-avoidance laws across the developed world would cause mayhem in financial centres, and cause the loss of a good many high-earning jobs. It would probably also reduce inequality, but at the expense of gross wealth overall. It would take considerable courage for a country with an important financial sector to take this step, which is why I don't expect it to happen.

Posted by Cod (# 2643) on :

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by Marvin the Martian:
So some of the discussion on this thread would have us believe. I wonder how many of the "you're supposed to give as much as you can, not as little as you have to" posters voluntarily give more money to the taxman than they have to?
Well, I can't speak for everyone, but my point is not "you should pay as much tax as you can," but "you should pay the amount of tax determined by the application of the spirit of the law, rather than by exploiting loopholes".

The problem with this is that tax law has no spirit.

I would be very interested in comment from any US tax lawyers because I understand the law works differently there, but in English-derived systems, tax law is applied to the form of a business arrangement, not what is actually going on.

An addendum to my previous post: I see the UK has introduced something of a general anti-avoidance rule, but it is very defensively framed, ie, it applies to arrangments that "cannot be regarded as as a reasonable course of action". How that is interpreted will be a matter of politics, I suspect, and given the general background of tax law, is open to being read right down.

Posted by Demas (# 24) on :

Here are some concrete tax avoidance scenarios:

1. A government wishes to encourage donations to charities, so it gives donors a tax break if they donate. A company donates to charity and reduces its tax bill.

2. A government wishes to encourage saving for retirement, to reduce the future pension cost, so it sets up a special type of account which doesn't tax interest. A person saves money using this type of account and reduces their tax bill.

3. A government wishes to encourage local films, so puts in place a tax deduction where a local company makes a film. A filmmaker sets up a new company, makes a film, and then gets a tax deduction.

4. A government wishes to encourage local car manufacture, so sets in place a tax reduction for companies with local car factories. A foreign car maker chooses to build a factory in that country and not another, so reduces its overall tax bill.

5. A government in an otherwise resource poor country wishes to encourage companies to register in its country (so that it gets registration fees). It sets its rate of company tax very low. As a result, an organisation chooses to set up its main branch in that country and reduces its tax bill in other countries.

Posted by Cod (# 2643) on :

quote:
Originally posted by Demas:
Here are some concrete tax avoidance scenarios:

1. A government wishes to encourage donations to charities, so it gives donors a tax break if they donate. A company donates to charity and reduces its tax bill.

Not tax avoidance.

quote:
2. A government wishes to encourage saving for retirement, to reduce the future pension cost, so it sets up a special type of account which doesn't tax interest. A person saves money using this type of account and reduces their tax bill.

Not tax avoidance.

quote:
3. A government wishes to encourage local films, so puts in place a tax deduction where a local company makes a film. A filmmaker sets up a new company, makes a film, and then gets a tax deduction.

Not tax avoidance.

quote:
4. A government wishes to encourage local car manufacture, so sets in place a tax reduction for companies with local car factories. A foreign car maker chooses to build a factory in that country and not another, so reduces its overall tax bill.

Not tax avoidance.

quote:
5. A government in an otherwise resource poor country wishes to encourage companies to register in its country (so that it gets registration fees). It sets its rate of company tax very low. As a result, an organisation chooses to set up its main branch in that country and reduces its tax bill in other countries.

...not tax avoidance.

Notwithstanding your use of the word "government", in every scenario you describe it is implied that the tax provisions have been used according to their legislative intent.

Posted by Jay-Emm (# 11411) on :

quote:
Originally posted by Cod:

quote:
Originally posted by Demas:
Here are some concrete tax avoidance scenarios:
1. A government wishes ... if they donate. A company ... and reduces its tax bill.
Not tax avoidance.

Would (almost) concur [and as another of the sections targetted], it's not quite "finding what how much you owe Caesar", but it's (as described) not the avoidance that's being criticised.

However I think all of them have been (or could be) used in a more avoiding way.
1) "Charities which then give the money back",
2) "pension saving with a free loan back",
3) as described is almost "working out what you need to pay", if a non-film made a film that required a working factory or something then...
4)
5) definitely is skimming depending on whether they set up their main branch there and build the roads they need or if they just declare it and then use the roads of another country.

[ 04. July 2013, 06:31: Message edited by: Jay-Emm ]

Posted by ExclamationMark (# 14715) on :

Always remember another side to this debate. In the UK the HMRC (Tax Authorities) can bill you for whatever amount they might think you owe.

This may bear absolutely no relation to the actual figure - it's often way too high, even a multiple of the real bill. They don't have to prove you owe it, you have to prove you don't.

In the eyes of the tax authorities you have to prove your innocence which sits rather uneasily in English law where you are presumed innocent and have to be proved guilty.

Is this the HMRC's counterpoint to tax avoidance and/or evasion? [Avoidance is legal until the loophole is closed, evasion isn't].

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by Cod:
(I note as an aside, that the real losers as countries without financial centres, and third-world countries in particular).

Given the campaigns of Christian Aid, and similar organisations, over the last few years I would be surprised if the bishops comments about the morality of tax avoidance were not substantially related to the impact on tax revenues for developing countries.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by ExclamationMark:
Always remember another side to this debate. In the UK the HMRC (Tax Authorities) can bill you for whatever amount they might think you owe.

This may bear absolutely no relation to the actual figure - it's often way too high, even a multiple of the real bill. They don't have to prove you owe it, you have to prove you don't.

In the eyes of the tax authorities you have to prove your innocence which sits rather uneasily in English law where you are presumed innocent and have to be proved guilty.

Can you verify that? It sounds very urban mythy to me.

Certainly when they got my tax code wrong last year all it took was a phone call to say "this isn't right", and it was sorted out.

Posted by Gee D (# 13815) on :

Leorning Cniht, you talk of "the spirit of the law" Can I ask how that's to be divined? Only by the application of the normal rules of statutory interpretation. To do otherwise would lead to great uncertainty on the part of taxpayers and of governments. That of course leads to the letter of the law.

BTW, I can assure you that under the relevant tax law here, you can have only 1 principal place of residence, and to escape any capital gains tax liability, you have to live there for at least 3 consecutive years.

To those who say that the actions of Google and others is immoral: would you be prepared to pay a higher price for any goods and services on the basis that the tax minimisation schemes were outlawed? Companies are separate legal persons, but their profits become the income of all sorts of people: your neighbours perhaps. or your pension fund, or even your church.

Posted by Cod (# 2643) on :

quote:
Originally posted by ExclamationMark:

In the eyes of the tax authorities you have to prove your innocence which sits rather uneasily in English law where you are presumed innocent and have to be proved guilty.

Is this the HMRC's counterpoint to tax avoidance and/or evasion? [Avoidance is legal until the loophole is closed, evasion isn't].

You are wrong. No one has to "prove their innocence" of a tax assessment. Furthermore, I expect the average person gets assessed for an odd amount, it's because that person has failed or refused provide a return and accordingly has been default-assessed. No-one's fault but their's.

It is more accurate to say that a taxpayer who disputes an assessment has to prove the assessment is wrong on the balance of probabilities. Given that tax assessments are based on information provided by taxpayers themselves, this is entirely appropriate.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by moonlitdoor:

quote:

originally posted by Adeodatus

Continually to ask, "Is this a sin ... or is this? - Can I get away with this but not this? Can I put my foot this close to the line without being called on it, and how far can I bend this rule without being deemed to have broken it?"

Asking myself "is this a sin ... or is this ?" is how I go about deciding what is right and wrong. It's about what action I am comfortable with rather than what I can get away with. ... [L]ooking at individual actions to see whether they cross my line is how I choose what to do.

Good grief! How do you ever get anything done?

And anyway, that wasn't what I was saying. The mindset I was trying to illustrate is more akin to the kind of mindset that decides someone needs to die, and then spends time calculating exactly how far they can go in "arranging" an accident, without being charged with murder.

I can imagine the analogous discussion, given some of what's been said here. "Yes, but if I only left the butter on the top stair, rather than spreading it ...".

Posted by Erroneous Monk (# 10858) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Alan Cresswell:

Put simply, if the archbishop needs that much knowledge to discuss the morality of taxation then by rights this thread should sink to the bottom of Purgatory as no one else here has the right to comment on the morality of taxation. And, all other threads in Purg would do the same if we apply the same level of "must have a working knowledge of specialist subject" criteria.
If he is going to use his position and authority to speak on a matter then, yes, he should only use that position and authority to speak about things about which he actually has a clue.
The thing is, to me it seems he does have a clue. He knows, for example, that several multinationals use legal means to move money around such that they a) reduce their total tax burden and b) pay more of that tax in nations where the government has less need for the revenue (naive assumption being if they needed more revenue tax rates would be higher).

Yes, this is very naive. See the governments of the world as competing to get investment, jobs, trade etc, by offering the lowest tax rate they think their electorate will stand. And as the Laffer curve (not perfect, but still a pretty solid view) demonstrates, a higher tax rate does not equal more tax revenue. The question is what is the optimum rate - one that maximises investment, jobs, trade and therefore maximises the quantum of tax take, if not the percentage rate? In Ireland, they clearly think the optimum rate (i.e. one that will attract more investment and jobs) is lower than the UK rate. So they're undercutting us.

The idea that a country with a higher tax rate needs the money more (and therefore it is morally superior to be incorporated/resident for tax purposes) there is just... wrong, I would say.

Posted by Erroneous Monk (# 10858) on :

If it were possible for us all to agree on what falls into the category of "legal but dodgy", we could have three terms:

"tax efficiency" for what is legal and "undodgy"
"Tax avoidance" for what is legal and dodgy
"Tax evasion" for what is criminal.

The trouble then is that some seem to think that anyone legally taking advantage of a tax inducement from the government for reasons other than adopting the behaviour the government is incentivising them to adopt is inherently immoral. I'm not sure that always (ever?) follows.

The government uses both tax and spending to try to change our behaviour. Do you feel as strongly that people who take advantage of the government's *spending* without changing their behaviour in the way the spending is intended to incentivise them to do are immoral, as you do when it is someone taking advantage of tax break without changing their behaviour? (In both cases, assume the taking advantage is legal)

Posted by moonlitdoor (# 11707) on :

quote:

originally posted by Erroneous Monk

The question is what is the optimum rate - one that maximises investment, jobs, trade and therefore maximises the quantum of tax take, if not the percentage rate?

In fact the optimum might not even be what would maximise the total tax take. Taxation generally lowers the level of economic activity, as some transactions that would take place in the absence of tax do not do so when the tax is there. For example if the most I am prepared to pay for a cup of tea is 50 pence, and someone can produce it for 50 pence, a sale will take place. But if there is a 50 pence tax on every cup of tea, no sale will take place as the price will be a pound and I am only willing to pay 50 pence.

A reduction in economic activity will typically mean more costs for the governemnt, for example because more people will be out of work, and these costs might outweigh the extra tax revenue.
This is one reason why heavily indebted governments such as most of Europe have not attempted to address their situation by large tax rises.

Posted by Cod (# 2643) on :

quote:
Originally posted by Erroneous Monk:
If it were possible for us all to agree on what falls into the category of "legal but dodgy", we could have three terms:

"tax efficiency" for what is legal and "undodgy"
"Tax avoidance" for what is legal and dodgy
"Tax evasion" for what is criminal.

I think this is a very good categorisation.

The problem we have with tax law generally is that no effective distinction is made between tax efficiency and tax avoidance. Traditionally, there was no distinction at all: the only question was whether the taxpayer had complied with the letter of the law. Even now, distinguishing between efficiency and avoidance is fraught with difficulty, legally speaking.

quote:
The trouble then is that some seem to think that anyone legally taking advantage of a tax inducement from the government for reasons other than adopting the behaviour the government is incentivising them to adopt is inherently immoral. I'm not sure that always (ever?) follows.

Leaving aside other moral issues not directly related to tax (e.g. whether the inducement itself is to do an immoral thing such as employ sweated labour) I agree.

quote:
The government uses both tax and spending to try to change our behaviour. Do you feel as strongly that people who take advantage of the government's *spending* without changing their behaviour in the way the spending is intended to incentivise them to do are immoral, as you do when it is someone taking advantage of tax break without changing their behaviour? (In both cases, assume the taking advantage is legal)

I don't think so, as long as the recipients are complying with the law.

I say this because, once again, I think it is the responsibility of governments to get the tax system right and fair. It is not the responsibility of multinationals to avert their eyes from tax-minimisation strategies and disadvantage themselves against their competitors.

Similarly, I don't see that it is the responsiblity for the beneficies of Gvt spending to do more than the law requires. Why should it?

The British and the Dutch rule tax havens. Ireland, along with certain US states, impose beggar-my-neighbour rates of corporate tax. And - crossing the line into criminality, Switzerland, Luxembourg and Liechtenstein have banking secrecy, and in the US (or so I'm told) banks are required to sight so little in the way of ID, that it is impossible for the taxman to conduct proper audits. These are the things that need to be got right.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Cod:
...not tax avoidance.

Notwithstanding your use of the word "government", in every scenario you describe it is implied that the tax provisions have been used according to their legislative intent.

Those are all tax avoidance, Cod. But what's wrong with any of it?

Posted by DouglasTheOtter (# 17681) on :

Morality?

Posted by Cod (# 2643) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Cod:
...not tax avoidance.

Notwithstanding your use of the word "government", in every scenario you describe it is implied that the tax provisions have been used according to their legislative intent.
Those are all tax avoidance, Cod. But what's wrong with any of it?

It isn't.

Not any more than a decision to take a pay cut is tax avoidance.

Nor do I think there is anything wrong with those scenarios, as my previous posts ought to have illustrated.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Cod:
It isn't.

Yes, it is, since tax avoidance is nothing more than the use of legal methods to lower the amount of income tax owed. Since those items in the list do that, those are tax avoidance strategies.

Posted by Cod (# 2643) on :

Such as taking a pay cut for example.

It is better to stick with the conception of tax avoidance as defined above, e.g. the use of legal means to minimise tax albeit not in accordance with the policy intention behind those laws.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Cod:
Such as taking a pay cut for example.

It is better to stick with the conception of tax avoidance as defined above, e.g. the use of legal means to minimise tax albeit not in accordance with the policy intention behind those laws.

I don't see any reason to change the definition.

Posted by ExclamationMark (# 14715) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by ExclamationMark:
Always remember another side to this debate. In the UK the HMRC (Tax Authorities) can bill you for whatever amount they might think you owe.

This may bear absolutely no relation to the actual figure - it's often way too high, even a multiple of the real bill. They don't have to prove you owe it, you have to prove you don't.

In the eyes of the tax authorities you have to prove your innocence which sits rather uneasily in English law where you are presumed innocent and have to be proved guilty.
1. Can you verify that? It sounds very urban mythy to me.

2. Certainly when they got my tax code wrong last year all it took was a phone call to say "this isn't right", and it was sorted out.

Yes it does sound like it doesn't it but sadly it's true. I can verify from personal experience and from helping others in the same boat - in fact, most self employed people can.

The wildest extremes happen when HMRC seem to think you aren't declaring something - that's usually followed by an investigation where they ask for bank records etc and put you to proof of income. In one case I helped with, the guy had received £100 cash for his birthday from his family but because he couldn't prove it, it was treated as income and he was taxed on it. They wouldn't take the family's word they needed hard proof. All because as a taxi driver his income suddenly dipped one year and they thought he was on the fiddle - in fact he was off work for 6 months, sick.

[By the way HMRC has a database that records the income ranges for most uk occupations. Your details are compared to this, on the fly, as your tax return is entered. Exceptions and variations are reported and decisions made to investigate on the usual kind of sampling bases based on likely costs and potential returns].

The minimum I advise is photocopying all cheques you credit to your account and keeping a record of every payment in with hard copy evidence should you have an investigation. A sample of Uk taxpayers is taken each year for such purposes and you will be asked for all your records and an assessment made as to whether you've paid enough tax. Oh, if your employer has got it wrong - it comes to you first and you have to sort that out too!

{Live Example: my dad's employer sent his P60 off as normal: unfortunately being hand written and having a missing carbon in one part of the form it looked like he'd been paid but paid no tax on HMRC's copy, though his was correct. He got a demand for a whole year's tax from HMRC who told him (and me) it was up to him to check ALL submissions].

Yes it's happened to me too - the revenue demanded £5200 tax - even though they KNEW I'd only been self employed for 3 months, hence owed about £1300. They were unapologetic about the mistake and pointed out in almost the same words I used, that it was down to me to prove what I earned. At times they get it seriously wrong - in my case accompanied by a breach in data protection - but there is no recourse.

A complaint to the Information Commissioner resulted in recognition of an error on a "technical fault" but were HMRC fined as the law requires? You bet not!

What you also have to bear in mind is that HMRC apply differential standards on record keeping. They don't log work in and out (if you have a tough query it keeps going to the bottom of the pile)and there's no way of discovering who's amended your file or made a note on it, as I discovered when I made a request for copies of all the records they held on me. It was impossible to track down who had made a mistake on my records, as well as more seriously, releasing information to an outside body.

Small wonder that some people decide to get one back on HMRC where they can. In my case the ultimate victory was hollow: they sent me a cheque for 0.01p because they couldn't legally prove to me that they were allowed to round up for tax calculation purposes. It got that petty.

2. Point taken but how many codes remained wrong in HMRC's favour? Why did they do it in the first place when they had all the information available? Why do we have to sort out their computer glitches which was what this was?

I am not advocating avoidance at all but sad to say as a result of personal experience in a number if instances, I don't trust HMRC at all - to get it right or to even know their own law. Once I gave them the benefit of the doubt, now I don't I claim for every single penny I can and fight every dispute down to the wire.

Time and again on behalf of my own affairs and those of others (many of them extremely vulnerable) I have found HMRC to be unhelpful, on occasion bullying and worst of all, on at least 2 occasions excluding my own records, to be liars.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by Cod:
It isn't.
Yes, it is, since tax avoidance is nothing more than the use of legal methods to lower the amount of income tax owed. Since those items in the list do that, those are tax avoidance strategies.

You really haven't read the thread title, have you?

Let me spell it out, once and for all:

Legality
is
not
the
issue
here.

Posted by Gee D (# 13815) on :

Adeodatus, what you (and others) have so far failed to show is why it is immoral to pay the tax you are required to pay, no more and no less.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Gee D:
Adeodatus, what you (and others) have so far failed to show is why it is immoral to pay the tax you are required to pay, no more and no less.

A number of posters have addressed that question perfectly adequately. My own argument begins from the premise that Scripture instructs us to obey the civil authorities.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Adeodatus:
My own argument begins from the premise that Scripture instructs us to obey the civil authorities.

Indeed. And ours begins from the premise that if you're not breaking the law then you are obeying the civil authorities.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Adeodatus:
My own argument begins from the premise that Scripture instructs us to obey the civil authorities.
Indeed. And ours begins from the premise that if you're not breaking the law then you are obeying the civil authorities.

And then you get into the pharisaical mindset of picking over the letter of the law to find out just how far you can go. And I've dealt with that too: as an attitude, Jesus didn't like it, and said so.

Posted by Doc Tor (# 9748) on :

quote:
Originally posted by Alan Cresswell:

quote:
Originally posted by ExclamationMark:
Always remember another side to this debate. In the UK the HMRC (Tax Authorities) can bill you for whatever amount they might think you owe.

This may bear absolutely no relation to the actual figure - it's often way too high, even a multiple of the real bill. They don't have to prove you owe it, you have to prove you don't.

In the eyes of the tax authorities you have to prove your innocence which sits rather uneasily in English law where you are presumed innocent and have to be proved guilty.
Can you verify that? It sounds very urban mythy to me.

Certainly when they got my tax code wrong last year all it took was a phone call to say "this isn't right", and it was sorted out.

Try being a self-employed artist, whose income varies, sometimes wildly, from year to year.

The HMRC are currently taxing me at a marginal rate of around 90% (via 'payment on account'). Okay, so I'll get a lot of that back when I submit this year's tax return, but that money is last year's money which I couldn't spend last year - because I knew I'd get hammered for this year's tax, and I couldn't spend this year, because they still have it.

So I'll be drawing down income next year I earned last year - effectively waiting three years to get paid.

EM's point mostly stands. They base next year's payment on the previous year's income. You can pay less if you choose, but if you get it wrong, you get hosed on both fines and interest.

Posted by moonlitdoor (# 11707) on :

I recently faced a choice about whether to take part in a way of reducing taxes. It is what I was thinking of when I gave Adeodatus the impression of general indecisiveness on my part.

The company I work for has a pension scheme. I can pay in up to 8% of my salary, and the company will match my contributions. So I pay in 8% and they pay in 8%. They came out with the proposal that they would reduce my salary by 8% and pay all the pension contributions themselves. So the same amount would go into the pension scheme, but because of the lower salary, both they and I would pay lower National Insurance contributions. I describe this as applied to me but this is a big company, so it applies to thousands of people.

The company encouraged us to do this but it's by no means compulsory, you can opt out of it.

On the one hand, this scheme seems to be entirely legal. As far as I can find out many companies are doing it, and the Revenue and Customs have not challenged it. On the other hand, reducing tax is clearly the whole point of it. One could not describe the reduction in tax as a by product of a decision made for other reasons.

I found it quite difficult to decide whether to take part in it. I don't have any general principle that it's better for more money to go to the government than my company or vice versa. But I wouldn't like to do anything I regarded as essentially dishonest.

Trying to decide whether this was ok or dishonest did involve thinking in a way that might be described as Pharisaical as I was comparing this arrangement with other things that I thought definitely ok, and things that I thought definitely not ok, to see which it more nearly resembled.

Posted by DouglasTheOtter (# 17681) on :

Just thinking out loud here, but what would happen if the money yoi saved went to a charity?

Posted by Gee D (# 13815) on :

quote:
Originally posted by Adeodatus:

quote:
Originally posted by Gee D:
Adeodatus, what you (and others) have so far failed to show is why it is immoral to pay the tax you are required to pay, no more and no less.
A number of posters have addressed that question perfectly adequately. My own argument begins from the premise that Scripture instructs us to obey the civil authorities.

A number of posters have indeed dealt with that, but I don't agree with your assessment that their dealing has been adequate. The comments starts with the 3rd post on this thread. Jade Constable said:

Of course tax avoidance is a sin - it is a way of loving money above loving God and one's neighbour that ensures that the rich get richer, and the poor get poorer.

but she did not grapple with the question - just assertions. And this approach has continued since.

Your post of 8.23 pm again says that the approach which I, and many others, have taken is pharisaical. But picking over the law is a matter for Caesar and his descendants. Now, in Biblical times, collection of taxation left a lot to be desired, but our present day Caesars go to considerable length to spell out what they require by way of tax. How is it pharisaical to read the edict and pay what you are required to, and how is that immoral?

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Gee D:
Your post of 8.23 pm again says that the approach which I, and many others, have taken is pharisaical. But picking over the law is a matter for Caesar and his descendants. Now, in Biblical times, collection of taxation left a lot to be desired, but our present day Caesars go to considerable length to spell out what they require by way of tax. How is it pharisaical to read the edict and pay what you are required to, and how is that immoral?

It's not. To read the edict and then spend a great deal of time and effort working out how to comply with its letter while utterly ignoring its spirit is pharisaical and immoral. It is the precise modern equivalent of "tithing mint and dill and cumin", while "ignoring the weightier matters of the law".

Posted by Gee D (# 13815) on :

How do you determine the spirit of the tax or any laws? I would say by traditional and accepted methods of statutory interpretation, as that leads as closely as possible to certainty for both parties. Otherwise, we're left with how you see the spirit and I see it.

And of course, when Christ spoke against the Pharisee, he was not talking of Caesar's petty edicts, but of God's great laws. Indeed, he clearly (at least to my eyes) drew that distinction.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Gee D:
How do you determine the spirit of the tax or any laws? I would say by traditional and accepted methods of statutory interpretation, as that leads as closely as possible to certainty for both parties. Otherwise, we're left with how you see the spirit and I see it.

And of course, when Christ spoke against the Pharisee, he was not talking of Caesar's petty edicts, but of God's great laws. Indeed, he clearly (at least to my eyes) drew that distinction.

That's precisely how you don't discern the spirit of the law. Rather, you look at such broad moral principles as what is taxation for? If you find yourself using words like justice, fairness, and helping the weak and disadvantaged, I'd say you're on the right lines. If instead you say something like "it's something that exists for me to participate in as little as I possibly can without actually getting prosecuted", then I'd say you need to spend your tax savings buying yourself a new moral compass.

Your point about the civil vs. the religious law is irrelevant. If the Romans hadn't been occupying Judaea, the religious law would have been the civil law.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Adeodatus:
My own argument begins from the premise that Scripture instructs us to obey the civil authorities.

That's my argument, as well.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Adeodatus:
My own argument begins from the premise that Scripture instructs us to obey the civil authorities.
Indeed. And ours begins from the premise that if you're not breaking the law then you are obeying the civil authorities.

But the civil authorities do not compel us to minimize our taxes. And Scripture exhorts us to do much more than just merely comply with the law-- that's a minimal, not a maximum, expectation. So again, the whole question of "is it legal?" is irrelevant to the discussion here.

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by cliffdweller:
But the civil authorities do not compel us to minimize our taxes.

Neither do they compel us to maximise them. They compel us to pay the amount the law demands - no more, no less.

quote:
And Scripture exhorts us to do much more than just merely comply with the law-- that's a minimal, not a maximum, expectation. So again, the whole question of "is it legal?" is irrelevant to the discussion here.

Which brings us back to the question of how much voluntary tax you pay on top of what your government demands. An extra couple of hundred bucks a month, perhaps?

[ 05. July 2013, 15:20: Message edited by: Marvin the Martian ]

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by cliffdweller:
But the civil authorities do not compel us to minimize our taxes.
Neither do they compel us to maximise them. They compel us to pay the amount the law demands - no more, no less.

quote:
And Scripture exhorts us to do much more than just merely comply with the law-- that's a minimal, not a maximum, expectation. So again, the whole question of "is it legal?" is irrelevant to the discussion here.
Which brings us back to the question of how much voluntary tax you pay on top of what your government demands. An extra couple of hundred bucks a month, perhaps?

Yes. It brings us back to the lengthy, complex questions we have been dealing with here on this thread. Complicated questions-- as all moral questions are. The simplistic "is it legal?" or even your equally simplistic "how much is enough?" are really irrelevant. It's the deeper questions about the role of government, and how Christians are/are not called to invest in that work and for what purposes, are the relevant issues here.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by cliffdweller:
It brings us back to the lengthy, complex questions we have been dealing with here on this thread. Complicated questions-- as all moral questions are. The simplistic "is it legal?" or even your equally simplistic "how much is enough?" are really irrelevant. It's the deeper questions about the role of government, and how Christians are/are not called to invest in that work and for what purposes, are the relevant issues here.

I could just as easily say that Sentamu and the like are being simplistic. Actually, it is far easier.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by cliffdweller:
[qb]But the civil authorities do not compel us to minimize our taxes.
Neither do they compel us to maximise them. They compel us to pay the amount the law demands - no more, no less.

In a sense they do compel us to minimize our taxes for the simple reason we will have to pay more if we don't.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Mere Nick:

quote:
Originally posted by cliffdweller:
It brings us back to the lengthy, complex questions we have been dealing with here on this thread. Complicated questions-- as all moral questions are. The simplistic "is it legal?" or even your equally simplistic "how much is enough?" are really irrelevant. It's the deeper questions about the role of government, and how Christians are/are not called to invest in that work and for what purposes, are the relevant issues here.
I could just as easily say that Sentamu and the like are being simplistic. Actually, it is far easier.

Well, you can say pretty much anything, doesn't make it true.

I think we have demonstrated here pretty clearly that it is a viable moral dilemma-- something with a lot of interesting and complicated aspects to it. Whether you ultimately decide that Sentamu was right or wrong in his moral assessment, based on the discussion we've seen here, it clearly is not as simple as you are trying to make it out to be.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Adeodatus:

quote:
Originally posted by Gee D:
How do you determine the spirit of the tax or any laws? I would say by traditional and accepted methods of statutory interpretation, as that leads as closely as possible to certainty for both parties. Otherwise, we're left with how you see the spirit and I see it.

And of course, when Christ spoke against the Pharisee, he was not talking of Caesar's petty edicts, but of God's great laws. Indeed, he clearly (at least to my eyes) drew that distinction.
That's precisely how you don't discern the spirit of the law. Rather, you look at such broad moral principles as what is taxation for? If you find yourself using words like justice, fairness, and helping the weak and disadvantaged, I'd say you're on the right lines. If instead you say something like "it's something that exists for me to participate in as little as I possibly can without actually getting prosecuted", then I'd say you need to spend your tax savings buying yourself a new moral compass.

Your point about the civil vs. the religious law is irrelevant. If the Romans hadn't been occupying Judaea, the religious law would have been the civil law.

But when Christ spoke those words, the Romans were the occupying power.

At one level - the most basic - you're right about statutory interpretation. It is a valid method to look at the overriding purpose of a piece of legislation. By that means, you can see that a particular piece of legislation has some ameliorative intent. The Uniform Consumer Credit Act was introduced to protect consumers in credit transactions. Accordingly, if a particular section could be interpreted so as to give 2 different results, it is proper to adopt that which is more favourable to consumers.

But at a more detailed level, looking to the general intent is of little use. We can say that the intent of the taxation acts is to raise money for the government to spend on a range of activities. It is not just "justice, fairness, and helping the weak and disadvantaged". That does not mean that in the interpretation of a particular section, any reading more favourable to the government is the one to be adopted. Each section must be interpreted in its context to determine the proper meaning. Now, if that meaning is that the capital gain on my own house is not taxable, should I still hand over an appropriate sum to the government? Is it immoral not to? I think not.

A major difficulty in your approach is that it introduces great uncertainty. There used be a saying "as long as the Chancellor's foot". In modern terms that is the answer to the question "how long is a piece of string". A Chancellor would decide each case on how he (they were all male and normally clerics) saw the particular merits. But the length of his foot could vary in all sorts of circumstances, especially if it were trodden on heavily. The equity law he applied became just as codified as that in the traditional courts. And one of the great complaints about the Star Chamber was that its decisions were capricious. Some modern judges have thought that they have some great ability to "do right". Their's are not the decisions referred to in later years as useful precedents.

Think of the Motor Traffic Act and the regulations made under that. It's easy to say that a lot of that act is concerned with road safety. If were to apply your method of interpretation, speed limits and so forth could be abolished and replaced with a single edict: you must always drive safely. That would be extremely difficult to apply.

To go back to yur opening words: what I said is precisely how you should interpret particular pieces of legislation. Note that I have said "interpret".

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Gee D:

Now, if that meaning is that the capital gain on my own house is not taxable, should I still hand over an appropriate sum to the government? Is it immoral not to? I think not.

OK, but why? Pretty much everyone who has argued this side has done precisely that-- stated it as a fact, then referred to legality and/or popular opinion/practice as justification. But that's what the OP is asking. The OP is asking us to engage in moral reasoning-- not a legal argument, not a public opinion poll. So that means making a statement like the above-- "I think it is not immoral" and then backing it up with some sort of reasoned argument. I see none here, nor any forthcoming from that side.

quote:
Originally posted by Gee D:
A major difficulty in your approach is that it introduces great uncertainty.

Just because one cannot come up with an inflexible legalistic rule does not mean it's not a good moral argument. In fact, I would argue that real ethics (as opposed to legislation, which you go on to discuss in defense of this statement) are generally devoid of such simplistic rules. Moral reasoning means being willing to wade into the complex, subjective, imprecise morass of intent, motivations, intended and unintended consequences and potential consequences/risks. It will, yes, inevitably introduce "great uncertainty". That may be problematic in a court of law, but again, that's not what this thread is about.

Posted by Jay-Emm (# 11411) on :

quote:
Originally posted by Marvin the Martian:
Which brings us back to the question of how much voluntary tax you pay on top of what your government demands. An extra couple of hundred bucks a month, perhaps? [/QB]

Hard to assess directly (after all the point of the thread is to some extent to find out what the government asks for).

I mean one answer would be that I don't pay myself through some 'non-paying' payment in which case just about (including NICS). But getting it past work might be tricky so perhaps I did have to pay it.

Alternatively you could count charitable giving in a myriad of ways:
you could argue it has naff all effect (it's built in the code)
in the big society maybe it all counts, alternatively maybe if you claim gift-aid it counts against.

Really it depends on the charity (and what you get in return). Given you wanted a number I'll count church as stealing, dec members as counting so comes out as £+17/month.

And then you've got products and VAT, I have no idea how that balances. On the whole I'd say I try to shop ethically but I obviously don't have a 100% success and I'm not sure how much I really try.

Finally it could only count if you give the money direct, in which case I'm pretty sure it's £0. But that would mean if I deliberately became a benefit claimant and did the benefit equiv of tax-avoidance* but sent £5 to HMRC I'd be a saint, so in my opinion that's also a pretty poor metric and only useful as a rhetorical device.

*which is of course not the same as the vast majority of claimants, but the people championing effective accounting call foul when the poor do it.

Posted by Gee D (# 13815) on :

Cliffdweller, both your points are very interesting and advance this discussion greatly. As to your first point, I would say that many aspects of revenue raising is a purely government issue, and do not raise moral concerns one way or the other. There would be such concerns if the policy sought to rely much more heavily on regressive taxation such as sales taxes.

I accept your argument that the certainty principle referred to does not address the point of the OP.

On another tack, there has been no response so far to points some have made that those who feel that others who simply pay their their legal obligation are immoral, should themselves make payments beyond their own obligation. There has been no response either to my asking whether those criticising Google are prepared to pay extra to make up the loss of distributable profits.

Posted by Mere Nick (# 11827) on :

quote:
Originally posted by cliffdweller:
I think we have demonstrated here pretty clearly that it is a viable moral dilemma-- something with a lot of interesting and complicated aspects to it. Whether you ultimately decide that Sentamu was right or wrong in his moral assessment, based on the discussion we've seen here, it clearly is not as simple as you are trying to make it out to be.

It sure isn't as simple as Sentamu makes it with his "tax avoidance is sin" statement. Let him prove it if he is going to start calling folks sinners. The onus is on him, not me.

Posted by Russ (# 120) on :

Seems to me that there are two different moral principles being put forward here.

One is to do with honesty - that it is wrong to avoid tax by false description (such as describing an employer-to-employee relationship as a client-to-service -supplier relationship, or describing a production process where most of the adding-value takes place in one country as if all the value is added elsewhere).

And the other principle is to do with solidarity - that tax is a transfer of resources to those in need, and that therefore to hinder or frustrate this process is a Bad Thing.

The applicability of either principle could be questioned, but are these the basis of the case, or are there further principles involved ?

Best wishes,

Russ

Posted by Alan Cresswell (# 31) on :

For me, I think it's a bit of both.

Although I would say that when we start talking about 'honesty' (and, to be honest that's basically the same as calling people dishonest) and 'false description' then we're rapidly descending from discussing tax avoidance into tax evasion. We're talking here about practices which are legal, conducted in the open and accurately described in the appropriate returns to relevant tax authorities. The question isn't are people being dishonest and deceitful, but are people who are being honest and transparent acting in a moral way.

I suspect I probably start from the position you describe as 'solidarity'. If I'm at the receiving end of getting less support in my time of need because someone (legally) avoided paying all the tax they could have done, would I be happy with that? "Do unto others, as you would have done unto you". If low paid workers in some developing country, seeking nothing more than to provide a future for their kids, find that their efforts on behalf of their employer result in practically no tax to pay for the schools and clinics, that they're depending on to educate their kids and help them through illness, have a right to feel they've been wronged. Especially if the financial practices that mean their nation gets practically no tax revenue for their labour results in tax revenue in a country where the schools and hospitals are already well funded, and the company directors who have no real need of state funded education and health care anyway can relax knowing that their financial practices have maintained their already substantial profit margin and allowed the state to help others like them.

Such practices are perfectly legal, and the companies involved are often very open about their practices. The question is, are they morally justified to act that way?

Posted by Erroneous Monk (# 10858) on :

quote:
Originally posted by Adeodatus:

quote:
Originally posted by Gee D:
How do you determine the spirit of the tax or any laws? I would say by traditional and accepted methods of statutory interpretation, as that leads as closely as possible to certainty for both parties. Otherwise, we're left with how you see the spirit and I see it.

And of course, when Christ spoke against the Pharisee, he was not talking of Caesar's petty edicts, but of God's great laws. Indeed, he clearly (at least to my eyes) drew that distinction.
That's precisely how you don't discern the spirit of the law. Rather, you look at such broad moral principles as what is taxation for? If you find yourself using words like justice, fairness, and helping the weak and disadvantaged, I'd say you're on the right lines. If instead you say something like "it's something that exists for me to participate in as little as I possibly can without actually getting prosecuted", then I'd say you need to spend your tax savings buying yourself a new moral compass.

But isn't that the exact opposite of what Jesus thought and taught? He *didn't* think the civil state was a moral agency; therefore he taught that our dealings with it should be governed by the law ("that which is Caesar's") not by any attempt to determine whether or not tax is a good thing.

And for all the reasons raised by many posters above, we are in no better position today as regards determining whether paying tax to our government is a good thing. So we do what is legal.

If I really thought that overpaid tax helped the disadvantaged then I'd overpay. But there's no reason to think it does, no mechanism, in fact, for it to do so.

Pay tax efficiently and then give, until it hurts, of your cash and your time, to those with less than you.

[ 08. July 2013, 14:28: Message edited by: Erroneous Monk ]

Posted by Erroneous Monk (# 10858) on :

quote:
Originally posted by Alan Cresswell:

Such practices are perfectly legal, and the companies involved are often very open about their practices. The question is, are they morally justified to act that way?

Which companies are using transfer pricing arrangements to move profits out of the developing world?

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Erroneous Monk:
Pay tax efficiently and then give, until it hurts, of your cash and your time, to those with less than you.

...until you've given them so much that they end up having more than you, at which point they have to start giving it back until it hurts them?

Posted by Gwai (# 11076) on :

If the generous people of the world end up becoming the only poor in the world, the second coming will clearly be nigh!
Which is not to say that I advocate stupid giving. Generosity must be deep, but need not be foolish.

Posted by Erroneous Monk (# 10858) on :

quote:
Originally posted by Marvin the Martian:

quote:
Originally posted by Erroneous Monk:
Pay tax efficiently and then give, until it hurts, of your cash and your time, to those with less than you.
...until you've given them so much that they end up having more than you, at which point they have to start giving it back until it hurts them?

Yeah. Maybe stop before you get there. But I'm in no danger.

Posted by Russ (# 120) on :

quote:
Originally posted by Alan Cresswell:
If low paid workers in some developing country, seeking nothing more than to provide a future for their kids, find that their efforts on behalf of their employer result in practically no tax to pay for the schools and clinics, that they're depending on to educate their kids and help them through illness

That seems a rose-tinted half-truth about taxes, what we would all like taxes to be - "us" acting collectively to do something that everyone agrees is worth doing.

The opposite half-truth might be that the State is a mechanism for coercion, whereby a political class - "them" - divert resources to themselves and their friends, seek to use our own money to bribe us to re-elect them, indulge in foreign wars, prestige projects, and other behaviours which there isn't the slightest moral imperative to support.

Best wishes,

Russ

Posted by Marvin the Martian (# 4360) on :

quote:
Originally posted by Russ:
That seems a rose-tinted half-truth about taxes, what we would all like taxes to be - "us" acting collectively to do something that everyone agrees is worth doing.

Half-truth? That's a quarter-truth at best.

quote:
The opposite half-truth might be that the State is a mechanism for coercion, whereby a political class - "them" - divert resources to themselves and their friends, seek to use our own money to bribe us to re-elect them, indulge in foreign wars, prestige projects, and other behaviours which there isn't the slightest moral imperative to support.

And that's a three-quarters-truth at worst.

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