The morality of avoiding tax

It's very easy to give away a quarter of other people's money.

 

I wish it was, that is the problem.

My Grandad worked 60 hours a week down a Yorkshire mine just to feed and clothe his family before he put a pickaxe through his leg and got gangrene which killed him. I don't care who these other people are they did not 'earn' their wealth!

 

Your Grandad isn't the only one in the Country who has worked 12 hour days. Many of the rich have also worked their socks off to make their money. The 'rich' as you describe them, has an ever decreasing proportion of 'gentry' and increasingly has become dominated by the self-made entrepreneurs, who have as much right to spend their money how they choose to.

 

[video=youtube;PF_iorX_MAw]http://www.youtube.com/watch?v=PF_iorX_MAw[/video]

I don't know the relevance besides 'greed is good' but this had to be here.

 

Of course it is spending - when I buy a house the seller gets the money, when I buy stocks productive and innovative bussinesses get the money, when I save in a bank it is lent out to others. All much worthier causes than spending it on extravagant luxuries and so there's none left for inheiritence.

 

I'm sure if my grandfather was a position to decide his rate of pay he would have been much better off.
I don't entirely disagree with you about people working hard, taking risks and climbing the ladder however it has to stop somewhere or it then just becomes greed. Exactly how does Sir Phillip Green spend his net £2m a week? (probably more now) I know he works harder than many in his position but even if he did 80hrs, £25,000ph take home pay is a ridiculous wage and for what? just to leave to his kids who will no doubt sell his business's and spend as much as they can as fast as they can and still never come close to running out! ... probably in America!

 

This thread is more about the age old argument of left-wing socialism vs right-wing capitalism than it is about tax morality.

To take it back to the original point, if you are deliberately subverting, exploiting or outright deceiving the system then you are in the wrong, regardless of whether you are within the law or not. If you are taking advantage of government programs that WANT you to pay less tax as an incentive/relief (like the single person discount on council tax) then you're in the right.

TL.DR - If you are working within the intention of the law you're fine.

 

True but the rules for us mortals are different, you must know that.

BTW. I'm not a socialist before I get labeled one. But I can see what's wrong with our society and it's root causes.

 

Thanks for getting the thread back on track.

So, is every accountant immoral, when he handles the accounts as tax-efficiently as he can? How can he collect his fee, if he doesn't do his job properly?

Someone like an accountant is not allowed to interpret what he thinks the intention of the Law is, he just has to abide by the Rules. That is what he is paid for. If HMRC believe there is a legal opinion required, they take it to Court, and the Court do their job, and interpret the Law. That sets a precedent that can then be used by accountants.

There is not generally any deception, as you describe, as everything is fully disclosed.

What about the Shareholders? Directors have a legal obligation to act on the behalf of the Shareholders. That is the intention of the Law regarding the Directors obligations. Surely that will include keeping tax to the minimum required by the Law, it wouldn't include making generous 'donations' to HMRC.

Just saying!

 

The HMRC close one loophole and the accountants go scurrying off to find another one to take it's place. If that is not immoral then I'm a Dutchman.

 

So, in an effort to re-balance the injustice in the world, I presume you pay more tax than you have to, as you believe others should?

 

Actually I pay exactly what I am asked to pay and I certainly don't explore ways to avoid them. It's simple enough ... Earnings less legitimate expenses = X amount of pounds.

 

But a business that gets an accountant to sort out the tax, pays the same as you - exactly what they are asked to pay! Don't you get it?

 

I get it, tax avoidance is not evasion. The taxman can only ask for what is legally due which is not necessarily what he thinks you should pay ... which is exactly why loopholes get closed.

 

Exactly, so if a business pays what it is asked to pay, like you, is that immoral?

 

If I could get away with paying less tax I would every single time. I'm neither left or right wing, in fact I'm anti politics and anti politician. I guess that makes me an anarcist.

I see far too many deserving poor and ill get nothing whilst lazy freeloaders work the social security system to have any respect for the taxation system. So f**k it I say.

 

If a closed loophole suddenly means they have to pay more and they do then that is not immoral in the slightest. If however they actively seek for other loopholes I'd say very. Naturally legality is a totally different yard stick.

 

Well I maintain, that 99% of the population, whether left or right, socialist or capitalist, (or anarchist) would only pay the tax that they have to, and not a penny more - if they had the opportunity. It just so happens that the lower salaried employers (whether it is £20k or £200k) do not be the same opportunity as those that have a business.

For that reason, I believe that the majority of the outcry over legal tax avoidance is just pure jealousy and envy.

 

Or morality. Is that not what this thread is about?

 

If there were less lazy canuts then the needy canuts would get more. Basic opportunity cost.

So strip the lazy canuts things away to the bare minimum which forces them to not be a lazy canut to get a non-**** standard of living. I have an issue that the tax goes to wnkers.

No more liquid cash handouts. If you're ill you get no extra cash you get 'x-items' you need. If you have 'k' children you get k times the 'x' amount the food for a person. You get a house with a bed, oven and electricity. Social houses limited to 2 bedrooms, that equates to 2 people per room, if you opt to have more people live with you than that then you brought the cramped conditions onto yourself. Enjoy.

Welcome to the Democratic Republic of Carlostopia.

 

That is my point, if 99% would do the same,if they had the opportunity, then they lose any moral high ground.

 

Can I just say I take issue with people saying that tax goes to lazy people.

Even if you think everyone on JSA is lazy, which is blatantly false, that accounts for about 3% of the entire welfare budget.

At least 2/3 of the entire welfare budget goes to OAPs, and about 50% of the entire welfare budget is the state pension.

And that's forgetting as well that welfare is just one tiny part of a whole host of things your taxes pay for, like healthcare, defense, the military, housing, subsidies, police, fire service, road maintenance, council run schemes like youth projects, a legal system, politicians salaries, refuse collection and landfill operation, public transport and a whole host of other things which most of us rely on every single day.

So how about we stop moaning about the fact we have to pay for our basic services and amenities and instead feel happy that we don't live in Uganda where you will die if you can't afford medical treatment.

 

I think 99% is very fanciful. I'm sure that 100% of culpable individuals would like to pay less tax but most would not seek to actively avoid unless an accountant were to recommend it. Of course I realise that some businesses might actually have to especially if they have shareholders to account to and I think this is what annoys people most.

 

Anyone who owns or has consideted buying an ISA can not be against tax avoidance.

Legal tax avoidance is legal, morality does not come into it. It's the fault of the tax system and the years of tinkering round the edges that creates loopholes which people aggressively exploit. If the public disagree with a loophole that is exploited, close the loophole.

The whole system needs scrapping and a simple replacement implemented. There will be an administration saving meaning we will all be better off.

On the subject of inheritance tax. Why should the government take a slice of someones savings because they wisely decided not to spend and happened to pass away. People who spend more than they earn end up getting bailed out, why penalise the prudent and reward the wreckless.

 

People are encouraged to use ISAs by the government, in order to encourage saving.

The fundamental difference between tax reduction and tax avoidance is whether the government encourages you to use a particular service, grant etc. The former is good, the latter is bad.

 

The OP posed a very interesting question about where the line is crossed and I don't know the answer. Why is it OK (and not just OK but you are positively encouraged) to put money into an ISA or National Savings (in the past) in order to avoid tax but not OK to put it in the Isle of Man or Jersey to do the same? Is it because the amount you can put in has an annual limit/maximum holdings? I don't know why one is right and the other is wrong. Looking for loopholes or setting up companies instead of being paid directly and being subject to PAYE seems a bit unsporting but putting money in trust for your children or grandchildren when your earnings were already taxed before you saved some and the IHT allowance won't cover the value of a modest house in the south east doesn't make someone Public Enemy No 1. Or does it?

Edit: I was writing this and didn't see Hornmeister's post before I posted.

 

As I said you can't take it with you. and I don't quite understand your bail-outs theory. I'm only saying that being allowed to leave too big an inheritance is quite destructive despite all the prudent talk. If hoarding is encouraged unchecked you will eventually end up with all the wealth in the hands of the richest as we are starting to see now. Of course there will always be some coming back but that pot will shrink too.

The biggest problem is greed and the attitude that it is ok... it isn't as every mans gain is somebody else's loss and if you don't happen to be holding a good hand that means you ... if you don't currently earn £48k pa then you are earning below the British average salary - think about it.

 

I thought average earnings was around £26500? Where is £48k coming from?

 

The mean average and 48k is well out of date, it's probably nearer 60k. The average person might earn 26.5k but the whole of the nations private income divided by the whole of the workforce is a much, much greater figure.

 

It's this year's figure from the ONS. Your figure is meaningless, it is what everyone would earn if everyone were paid the same.

 

erm yes, that's exactly my point or are some animals more equal than others?

 

aaaaand we're back to socialism

 

Don't bother with Wiki the figures don't include half of it.

 

Not more equal than others but can command different rates for their skills/creativity/experience. That's not to say that things are fair the way they are.

The biggest problem is not greed. The biggest problem is that people have not saved enough and do not have enough behind them when they fall on hard times, they get sick and can't work, or lose their jobs and can't pay housing costs, but mostly that not only do they not have savings but they have unmanageable personal debt so immediately they hit a problem their world starts to unravel. Money softens the hard edges of life and that is what most people want to do when leaving money to their children, just give them a cushion, not a life of luxury.

 

Embrace the Nordic Model. Enuff said