Theft v tax evasion
Discussion
Was at a BBQ yesterday with friends. Looking at them they seem like honest, upstanding members of the community. I am pretty sure they would not steal a car or shoplift and would be horrified if their children did so (children all go to esteemed, private schools and are micromanaged to ensure they do not mix with the wrong crowd). Also expect they would expect ordinary thieves to be treated harshly in the courts.
In conversation with one friend he was saying how with help from his accountant he was going to claim a tax deduction for a fairly substantial piece of wholly personal expenditure. Basically stealing thousands of pounds out of the public purse (so indirectly stealing from me and everyone else). when we lived in Switzerland a Swiss friend told me that foreigners thought skiing was the Swiss National sport but in reality tax evasion was the most popular activity!
Why is tax avoidance/evasion seen by many middle class people as legitimate rather than plain theft?
In conversation with one friend he was saying how with help from his accountant he was going to claim a tax deduction for a fairly substantial piece of wholly personal expenditure. Basically stealing thousands of pounds out of the public purse (so indirectly stealing from me and everyone else). when we lived in Switzerland a Swiss friend told me that foreigners thought skiing was the Swiss National sport but in reality tax evasion was the most popular activity!
Why is tax avoidance/evasion seen by many middle class people as legitimate rather than plain theft?
Esceptico said:
Was at a BBQ yesterday with friends. Looking at them they seem like honest, upstanding members of the community. I am pretty sure they would not steal a car or shoplift and would be horrified if their children did so (children all go to esteemed, private schools and are micromanaged to ensure they do not mix with the wrong crowd). Also expect they would expect ordinary thieves to be treated harshly in the courts.
In conversation with one friend he was saying how with help from his accountant he was going to claim a tax deduction for a fairly substantial piece of wholly personal expenditure. Basically stealing thousands of pounds out of the public purse (so indirectly stealing from me and everyone else). when we lived in Switzerland a Swiss friend told me that foreigners thought skiing was the Swiss National sport but in reality tax evasion was the most popular activity!
Why is tax avoidance/evasion seen by many middle class people as legitimate rather than plain theft?
I know someone who is fairly loaded having sold a company which sells 'stuff' to schools. He told a group of us with no hint of shame about schools (state schools fwiw) being so inefficient that they often paid his invoices twice and he would never tell them unless the school itself realised the error. Surely that is straightforward theft?In conversation with one friend he was saying how with help from his accountant he was going to claim a tax deduction for a fairly substantial piece of wholly personal expenditure. Basically stealing thousands of pounds out of the public purse (so indirectly stealing from me and everyone else). when we lived in Switzerland a Swiss friend told me that foreigners thought skiing was the Swiss National sport but in reality tax evasion was the most popular activity!
Why is tax avoidance/evasion seen by many middle class people as legitimate rather than plain theft?
i4got said:
I know someone who is fairly loaded having sold a company which sells 'stuff' to schools. He told a group of us with no hint of shame about schools (state schools fwiw) being so inefficient that they often paid his invoices twice and he would never tell them unless the school itself realised the error. Surely that is straightforward theft?
NoCertainly not straightforward
i4got said:
I know someone who is fairly loaded having sold a company which sells 'stuff' to schools. He told a group of us with no hint of shame about schools (state schools fwiw) being so inefficient that they often paid his invoices twice and he would never tell them unless the school itself realised the error. Surely that is straightforward theft?
It’s called business if your customer is to stupid to realise that’s there look out not yours. It would be theft if he lied about receiving it or refused to give it back. Most people won’t see it as stealing because it doesn’t take from someone else. They see it as avoiding handing over hard earned cash to the massively wasteful and inefficient government. Also most will see 45% income tax as unfair amount to pay at nearly half.
A friend recently got promoted in the police and is paying 40% for the first time. He hit the roof when he realised. Used phrases like “why do I bother” if he could dodge some of that tax he would. Most people I know are in the same boat.
Is it ultimately selfish? Yes. In my experience nearly everyone is.
Unless you're feeling particularly altruistic, you should pay whatever tax is legally owed and nothing more. Subject to RoI you should take every piece of professional advice you can to use every tax break possible to minimise your tax. Your accountant is duty bound to help you avoid using what you are not obliged to pay.
There is nothing immoral in using the rules set by government to avoid as much tax a you can. If the government are strapped for cash, they can always change the rules.
My understanding is that punitive tax regimes against those with significant resources can be counter productive. These people become more motivated to seek tax avoidance advice and the cost benefit in doing so improves. Some will leave the jurisdiction or move assets to the same effect. That is why the 'proles' always end up being the ones hit; they have the least resources to and potential gain from seeking avoidance advice.
There is nothing immoral in using the rules set by government to avoid as much tax a you can. If the government are strapped for cash, they can always change the rules.
My understanding is that punitive tax regimes against those with significant resources can be counter productive. These people become more motivated to seek tax avoidance advice and the cost benefit in doing so improves. Some will leave the jurisdiction or move assets to the same effect. That is why the 'proles' always end up being the ones hit; they have the least resources to and potential gain from seeking avoidance advice.
RonaldMcDonaldAteMyCat said:
Unless you're feeling particularly altruistic, you should pay whatever tax is legally owed and nothing more. Subject to RoI you should take every piece of professional advice you can to use every tax break possible to minimise your tax. Your accountant is duty bound to help you avoid using what you are not obliged to pay.
There is nothing immoral in using the rules set by government to avoid as much tax a you can. If the government are strapped for cash, they can always change the rules.
My understanding is that punitive tax regimes against those with significant resources can be counter productive. These people become more motivated to seek tax avoidance advice and the cost benefit in doing so improves. Some will leave the jurisdiction or move assets to the same effect. That is why the 'proles' always end up being the ones hit; they have the least resources to and potential gain from seeking avoidance advice.
Nailed it.There is nothing immoral in using the rules set by government to avoid as much tax a you can. If the government are strapped for cash, they can always change the rules.
My understanding is that punitive tax regimes against those with significant resources can be counter productive. These people become more motivated to seek tax avoidance advice and the cost benefit in doing so improves. Some will leave the jurisdiction or move assets to the same effect. That is why the 'proles' always end up being the ones hit; they have the least resources to and potential gain from seeking avoidance advice.
I always chuckle when news outlets plaster stories about large corporations paying comparatively little tax despite huge turnover and profit. Well of course they did, they paid a clever accountant to make sure they didn't. Did you think they would give it away out of the goodness of their hearts when they were under no legal obligation to do so?
ntiz said:
It’s called business if your customer is to stupid to realise that’s there look out not yours. It would be theft if he lied about receiving it or refused to give it back.
Most people won’t see it as stealing because it doesn’t take from someone else. They see it as avoiding handing over hard earned cash to the massively wasteful and inefficient government. Also most will see 45% income tax as unfair amount to pay at nearly half.
A friend recently got promoted in the police and is paying 40% for the first time. He hit the roof when he realised. Used phrases like “why do I bother” if he could dodge some of that tax he would. Most people I know are in the same boat.
Is it ultimately selfish? Yes. In my experience nearly everyone is.
There are lots of things that people could see as unfair eg people being born into rich families and having all the advantages that brings in life. Some even argue that ownership of land and property is unjustified. Would you be happy with someone taking your car or other belongings because they don’t think it is fair?Most people won’t see it as stealing because it doesn’t take from someone else. They see it as avoiding handing over hard earned cash to the massively wasteful and inefficient government. Also most will see 45% income tax as unfair amount to pay at nearly half.
A friend recently got promoted in the police and is paying 40% for the first time. He hit the roof when he realised. Used phrases like “why do I bother” if he could dodge some of that tax he would. Most people I know are in the same boat.
Is it ultimately selfish? Yes. In my experience nearly everyone is.
If you disagree with the tax rate the way to change that is through the political system (or just move country). The government does not exist. It is not a person. When you evade or artificially reduce your tax you are stealing from the rest of us. When you say the “government” will not have the money in reality you mean other citizens. Claiming that governments are wasteful if just an excuse to justify thieving off the rest of us.
ClaphamGT3 said:
Tax avoidance is perfectly legally and morally legitimate. I would be very surprised at any reputable chartered accountant knowingly colluding in tax evasion
They'd be kicked out of the club.What the OP described is tax evasion, unsure why a number of posters are spending time writing lengthy posts on tax avoidance.
Eta
Is tax avoidance always morally acceptable? An interesting debate, I dont think it is.
Edited by CaptainSlow on Saturday 26th December 23:22
ClaphamGT3 said:
Tax avoidance is perfectly legally and morally legitimate. I would be very surprised at any reputable chartered accountant knowingly colluding in tax evasion
I think it depends on how you define evasion and avoidance. Legitimate use of tax reduction techniques eg claiming R&D tax credits because you are undertaking R&D, which the government is trying to promote? Of course. However, what about setting up structures to flow financing within your corporate group such that the company borrowing gets a tax deduction for the interest paid but the company receiving the interest income (based in another country) isn’t taxed on that interest income? Such avoidance techniques are wholly artificial and created to exploit loopholes or inconsistencies of tax regimes. Although not against the black letter of the law such techniques seem more akin to evasion to me and go beyond legitimate tax reduction.The simple answer is that psychologically it doesn’t feel like theft. When you ask someone to describe theft the picture that comes to most people’s minds will be robbery or shop lifting etc. With something like tax, or where they don’t feel they are physically taking something, the psychology is different.
There have been many studies on this kind of thing that have concluded that it’s easier for someone to reconcile the likes of tax evasion with themselves than clobbering someone over the head and stealing their bag kind of theft. You only have to look at the number of people that would buy pirated software, counterfeit goods and loads of other things to clearly see that in lots of people’s mind there are “levels” of theft / dishonesty / fraud
There have been many studies on this kind of thing that have concluded that it’s easier for someone to reconcile the likes of tax evasion with themselves than clobbering someone over the head and stealing their bag kind of theft. You only have to look at the number of people that would buy pirated software, counterfeit goods and loads of other things to clearly see that in lots of people’s mind there are “levels” of theft / dishonesty / fraud
Fastpedeller said:
Esceptico said:
Was at a BBQ yesterday with friends.
Am I the first to spot the open admission?..... Which tier are you in and how many households?There is a businessman local to me who got very rich by running up a load of debt with everyone possible, including HMRC and the banks before going bankrupt several times. Every time his business went under he re-emerged the next day with a new LTD company and someone else at the wheel as you could only do it for 4yrs every time.
He was also one for putting credit card payments through twice for the same invoice, it's amazing how many people/companies never notice and if ever pulled up on it it's a case of 'Oh i'm sorry, I made a mistake, I'll reverse the transaction'.
It made him and his family a heck of a lot of money, but Karma caught up with him and has now dealt him a personal blow.
I always find it interesting when in conversation those who look down the most on ‘scroungers’ and ‘doleys’ who milk the social system to its utmost fail to see the irony in their own boasting of tax avoidance.
I happily pay my tax, for my PAYE, my company and rental income, I could probably offset / claim a lot more but i don’t mind paying a bit extra.
Benefit scroungers and minimising tax are the same thing, perfectly legal and morally selfish.
I happily pay my tax, for my PAYE, my company and rental income, I could probably offset / claim a lot more but i don’t mind paying a bit extra.
Benefit scroungers and minimising tax are the same thing, perfectly legal and morally selfish.
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