Status Anxiety: Morally taxed

19 February 2011

Toby Young suffers from Status Anxiety

Since the coalition came to power, a consensus seems to have sprung up on the left that tax avoidance is wrong. Not tax evasion — which everyone agrees is wrong — but avoidance. A campaigning organisation called UK Uncut has sprung up that uses social media to organise sit-ins in high street branches of Top Shop, Boots and Vodafone to protest about it.

Last week, I questioned this thinking in a review of a book on tax havens in the Mail on Sunday. I pointed out that when we buy orange juice made from concentrate, which is zero-rated for VAT, because it’s cheaper than the freshly squeezed variety, we are avoiding paying tax. Far from being wrong, this is perfectly rational and governments often increase the duty on certain goods — cigarettes and petrol, for instance — in the expectation that we will alter our behaviour accordingly.

Why is it right for ordinary citizens to avoid paying taxes but wrong for the rich? The simple answer is because there’s more money at stake. But why should the scale of the activity in question affect its rightness or wrongness?

In the case of murder, it doesn’t become more wrong if you kill more people. Something is either right or wrong regardless of scale, and if minimising your tax burden in a small way is acceptable, then doing it in a big way is fine, too.

I didn’t think this was particularly controversial, but I hadn’t bargained on the sanctimony of the left. A tidal wave of criticism was unleashed in the blogosphere, most of it too obscene to be reprinted here. One of the most morally indignant of these critics was Richard Murphy, a leftwinger who campaigns for higher taxes and advises the TUC and Caroline Lucas on tax reform. He wrote a blog rebutting my argument that was three times longer than my original piece. His complaint was that there’s a world of difference between trying to avoid paying VAT on orange juice and taking advantage of things like tax shelters to pay no more than you have to while staying within the letter of the law. In the first case you’re complying with the government’s wishes, in the second you’re not. For him, tax avoidance per se isn’t wrong, but trying to avoid ‘tax compliance’ is.

1 | 2 | 3 Next page

More articles from: Toby Young | this section

Print this article | Email to a friend | Permalink | Comments (3)

Post this entry to: del.icio.us | Digg | Newsvine | NowPublic | Reddit

Post comment

sigh

February 19th, 2011 10:41pm Report this comment

The sooner people wake up to Murphy the better.

Perhaps then we can have a sensible protest group targeting the cuts rather than Murphy's fantasies of tax avoidance.

The very same avoidance he carries out like every other accountant.

Hypocrite.

David Moss

February 20th, 2011 11:08am Report this comment

George Monbiot has produced two hilarious columns in the Guardian recently, one on the taxation of overseas branches, one on naked short selling, neither of which topics does he understand but in both cases he is defended by Richard Murphy. Mr Monbiot's credibility is shot. Mr Murphy's is at least seriously wounded.

http://www.guardian.co.uk/commentisfree/2011/feb/07/tax-city-heist-of-century

http://www.guardian.co.uk/commentisfree/2011/feb/15/condemns-naked-short-selling-not-treasury