Cheating is cheating

Is it right to equate the morality of underpaying tax with defrauding the benefit system?

. . . Just 380,000 individuals pay half of all income tax.

If you earn more than $80,000 you are in that group. Most tax is paid by businesses through corporate tax or receipted GST payments. Possibly 80 per cent of the country is taking more from the state than they are contributing.

If you are a net contributor most of your money will go to paying for the welfare of others.

Most of those who seek to reduce their tax obligations are net contributors to our society. The only complaints against them are they do not pay enough.

Beneficiary cheats, by contrast, are providing nothing to start with and seek to enrich themselves further by deception and dishonesty.

Judges understand this, which is why beneficiary cheats go to jail for longer, as they should.

Cheating is cheating.

It makes no difference if you’re cheating with your tax or a benefit. If you’re cheating, you’re cheating.

But if it’s not illegal is it cheating?

Tax evasion is illegal but arranging your affairs to minimise your tax burden isn’t necessarily.

This is why lower, flatter tax rates are better.

People are much less likely to try to avoid them and much more likely to spend their time on more productive activity which will make more money which will deliver more tax.

That creates a virtuous cycle which is far better than the vicious circle of higher taxes which encourage avoidance and lower productivity which produces less profit and less tax.

 

4 Responses to Cheating is cheating

  1. TraceyS says:

    My wee daughter tore open her bank statement yesterday and sat down to quietly digest it. After awhile she came and asked “what is tax?” (having noticed RWT had been deducted off the interest she earned).

    After we explained it all she, horrified, exclaimed “well I don’t want a bank account anymore!”

  2. robertguyton says:

    “But if it’s not illegal is it cheating?”

    The Mantra of the Right, right there.

  3. TraceyS says:

    Only in your dreams, perhaps, is this thinking mainly the preserve of the “right”.

    In my expereince, all who can legally minimise their tax burden, do so regardless of their political leaning. Some would undoubtedly lean to the other side (in whichever direction) if that meant paying less tax.

  4. I started writing a response- how this only exacerbates the gap between the rich and the poor, which is already a growing issue here, how this implicitly endorses the actions of multi-billion dollar companies who already have a great deal of influence via lobbies and donations, and in turn this endorses a culture of greed, which leads to financial collapse, because greed eventually gets the better of most people- especially a corporation, which isn’t answerable to the same laws as a person, anyway. The main purpose of a corporation is to make money, and of course, tax evasion is going to offer that (concrete example: the 74b or so Apple has evaded). How ignoring all this, there’s a vast difference between the potential income from corporate tax evaders and beneficiary fraud- the difference in the amounts are substantial, obviously more money= more money to be used for the public good.

    Excluding all of that, though, there’s the disturbing implication of “the poor need to be taxed and punished” here, because let’s not kid about this- these beneficiary frauds ARE conducted by people barely scraping by as it is. Hardly buying new lear jets. In other words, perhaps deal with the root of the issue- how did these people get here? What can be done? Rather than send them to jail, putting their family, their children, etc, at a disadvantage. I believe it is called “the poverty cycle”. (Also: the suggestion that beneficiaries don’t “contribute” to society, which is to say they don’t contribute financially, which is to say the only contribution worth making is one that is financial)

    Big business isn’t some Great White Hope that benevolently contributes to society. It’s there to make money. If it contributes to society, great! But we shouldn’t turn a blind eye just because it earns a great deal of money- tax evasion is tax evasion.

    I enjoy your blog, Ele, but it seems we disagree here.

    Anyway, I started writing, and it seems I have ended up written something! But Laurie Anderson sums it up better than I can: http://www.youtube.com/watch?v=YM8t29gD8J8

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