Muggle morality
February 24, 2014Let’s talk a bit about “fairness”. Or about “morality”. Or we can talk about “equity” instead, if you like. After all, “there is no equity about a tax” (Mr Justice Rowlatt in Cape Brandy Syndicate, 1921), and “there is no morality in a tax and no illegality or immorality in a tax avoidance scheme.” (Lord Templeman in Ensign Tankers v Stokes in 1992). That’s tax wizard talk: people with a professional interest in tax can sometimes get caught up in the idea that tax is legal confiscation of private property and no overbearing state ought to be able to dip its hand in your pocket without good reason and legal backing, preferably from a body of law hallowed by time and created by a democratically elected parliament. Quite right too… except, is that really the problem, in a twenty-first century democracy?
Let’s be clear: if HMRC were coming through my front door with guns I’d be against it. When I DO deal with the actual HMRC, I get pretty pissed off if they’re inefficient, rude or inaccurate… but please note that I haven’t (so far) disappeared into a gulag for arguing my corner with them if they happen to stray. In general, if they put their hand in my pocket, I’d rather they didn’t but I accept I also would rather have an education, an army, a National Health Service and a few quid back from the state when I’m too decrepit to work any more: that tax is, indeed, the price we pay for civilisation. That, then, for me is the first point where morality comes into it. We pay taxes for a good reason, we obtain public goods as a result, and it’s pretty contemptible to take the goods and weasel out of paying towards them.
But the crunch point for me isn’t there, in the dealings HMRC has with the individual citizen, but in the relationship between the state and the multinational corporation. The hollowing out of the state by offshoring profits to tax havens (as described, for example, in Richard Brooks’ The Great Tax Robbery) seems to me to be contributing to all kinds of inequality and unfairness (see some of the examples quoted by the Tax Justice Network). Is the relationship between the state and the multi-national analogous to the relationship between the state and the private citizen?
Well let’s think about it. For one thing, the multinational may well have more money. (Walmart is bigger than Norway, Apple is bigger than Ecuador…) They may be able to bring influence to bear which the private citizen would be unable to exercise by the exercise of their single vote. They may be able to persuade governments to modernise any inconvenient rules (for example) “to better reflect the way business operates in a global economy“, costing the economy £450 million this year, rising to £805 million in 2016/17 against not a penny of quantified benefit.
The tax wizard might be right that there is no moral failure in a corporation arranging its affairs to pay the least amount of tax according to the law of the land. But if the corporation has the ability to influence the making of the law by which it is taxed, is there a moral failing in its doing so?
In tax policy-making, perhaps it is politicians who are failing to make moral choices when they allow themselves to be influenced? Or perhaps it is our fault, as citizen-stakeholders, for not holding our politicians to account?
It’s not an easy thing to do – is anyone actually doing it? (Margaret Hodge? Any time her name comes up in the news my twitter feed comes instantly alive with tax wizards complaining about or mocking her. Similar animus is shown towards Richard Murphy)
So what are the rest of us, those of us who aren’t tax wizards and are pretty sure the “no equity” thing is a crock, to do? Well, fellow muggles, here’s my attempt at a muggle moral maze.
- If it is morally justifiable to arrange your tax affairs so that you pay the least amount of tax possible under the law, and
- It is morally justifiable to influence tax policy making so that laws which would tax you more heavily are not passed and laws which are favourable to you are, and
- It is morally justifiable to say that it is up to parliament what laws they pass, then,
- Logically it must then be the moral responsibility of the citizen stakeholder to exercise the only power which remains in their hands…
So to arms, citizens! Any time someone asks you for their vote ask them a simple binary, muggle, question: are they in favour of tax competitiveness, or of tax justice?
tiintax 
Wendy, this is entirely my not understanding, but with your four-point argument are you trying to produce an authentic conclusion or are you trying to produce an obviously absurd outcome?
The reason being is that I think you’ve made an obvious mistake in your logic and I don’t know whether this is intentional to deliberately contrive an impossible “moral maze”.
You make a very obvious jump from what is morally justifiable to what is a moral obligation. I don’t think that point 4 follows at all in the circumstances.
I was going to comment further (I don’t agree that point 2 is a moral proposition, but a purely self-motivated one which is an important distinction, I feel) but thought I might be missing the point you were making altogether… Sorry!
The internet can be a very difficult place for those of us with droll senses of humour who project it onto others. :-s
Interesting… The piece was my attempt to respond to various twitter threads about “morality” in tax where 140 characters just wouldn’t cut it. Essentially I feel if people are saying that there is no morality in tax (I don’t agree that’s so, but leaving that aside) and are also arguing that there is no moral onus on anyone to pay a “fair” amount of tax but precisely as little as the law allows, then you have to move on to look at how the law is made. It seems to me that, as an individual citizen stakeholder, you then find the dice are loaded, you aren’t considered a stakeholder in the consultation process, and your only recourse becomes campaigning to get fairer taxes. I don’t think that’s an “obviously absurd outcome” but then I’m a squib, not a wizard – and I stand up for the muggles!
Apologies for blunt phrasing in my original comment. I was just trying to make the point clearly and no offence was intended.
It was because you bullet-pointed your argument well that the jump in logic appeared intentionally obvious. You know,
Justifiable + justifiable + justifiable = obligation
Looks intentional, you know… But, apologies…. It was a genuine question, I assure you.
The reason I wanted to comment in the first place was because I don’t like the argument in its whole construction mainly because it is the sort of thing that might be used to justify evasion. Which is something I feel obliged to comment on.
My main problem (aside from the leap) is your point 2. It is not moral to lobby on behalf of yourself. It is self-serving primarily and has little to do with morality.
I agree that Parliament does not give enough ear to “muggles” and that is something the CIOT tries to consider in its submissions, for example. I believe the CIOT tries to consider unrepresented taxpayers and take an apolitical view. I don’t know how successful people think they are in that, but it seems like a laudable thing to attempt.
I think that is a moral basis to provide views to Parliament.
On the other hand, paying somebody to lobby for specific changes to the tax code that directly benefit your stakeholders because, and only because, it benefits your stakeholders would not be moral under most of mainstream moral theories. Kant’s categorical imperative would reject the principles behind it, and that’s normally good enough for me.
There’s clearly a lot of grey area between those two examples. But that’s the area that needs exploring in my opinion, as opposed to the outcomes of accepting that lobbying is always moral.
By accepting false premises, even for a hypothetical argument, you start to adopt them.