Cheating is cheating

February 10, 2014

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.

 


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