17 Apr The Problem With Tax Evasion
17.04.06
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1 Comment
The tax man cometh. The overwhelming majority of us will dutifully pay our taxes today, perhaps with reservations, but not with actual resistance. For most I suspect income taxes are viewed as a regrettable but inevitable part of modern life. But as noted in various news reports, a small percentage will refuse to pay a portion of their taxes in protest. What are they protesting? The reports have focused, of course, on the war in Iraq.
But surely this cannot be the only or even the best reason why someone would refuse to pay their taxes. Robert McGee has produced an interesting study available here that suggests that there may be many reasons why taxpayers would refuse to pay income taxes in protest. The survey identified top reasons why respondents indicated that tax evasion is not unethical:
1. If the government imprisons people for their political opinions.
2. If one were a Jew living in Germany in Nazi Germany in 1935.
3. If a significant portion of the money collected winds up in the pockets of corrupt politicians.
4. If the government discriminates against me because of race, religion, or ethnicity.
5. If the tax system is unfair.
6. If some of the proceeds go to support a war that I consider to be unjust.
7. If a large portion of the money collected is spent on projects that I morally disapprove of.
8. If I can’t afford to pay.
9. If tax rates are too high.
But significantly, none of these responses engendered much enthusiasm for tax evasion. According to the study, “none of the arguments were considered very strong by the survey participants” and that “there is a general perception that there is an ethical duty to pay taxes even if the government imprisons people for their political views.”
The obvious problem with moral arguments that favor tax evasion is that everyone can identify their pet objection to particular government action. Any ethical argument that favors tax evasion in one case must articulate why it is inappropriate in other cases, unless of course they seek financial anarchy. To wit, a top five reason identified in the study to justify tax evasion was that “the system is unfair,” slightly above the argument for tax evasion to protest an unjust war. But a recent poll published in the USA Today this week revealed that 60% of the public thinks the U.S. income tax system is unjust. So all those who evade taxes to protest the war in Iraq must explain why their particular moral convictions are entitled to special dispensation, while a majority of Americans who have a different moral objection are not entitled to such consideration.
But surely this cannot be the only or even the best reason why someone would refuse to pay their taxes. Robert McGee has produced an interesting study available here that suggests that there may be many reasons why taxpayers would refuse to pay income taxes in protest. The survey identified top reasons why respondents indicated that tax evasion is not unethical:
1. If the government imprisons people for their political opinions.
2. If one were a Jew living in Germany in Nazi Germany in 1935.
3. If a significant portion of the money collected winds up in the pockets of corrupt politicians.
4. If the government discriminates against me because of race, religion, or ethnicity.
5. If the tax system is unfair.
6. If some of the proceeds go to support a war that I consider to be unjust.
7. If a large portion of the money collected is spent on projects that I morally disapprove of.
8. If I can’t afford to pay.
9. If tax rates are too high.
But significantly, none of these responses engendered much enthusiasm for tax evasion. According to the study, “none of the arguments were considered very strong by the survey participants” and that “there is a general perception that there is an ethical duty to pay taxes even if the government imprisons people for their political views.”
The obvious problem with moral arguments that favor tax evasion is that everyone can identify their pet objection to particular government action. Any ethical argument that favors tax evasion in one case must articulate why it is inappropriate in other cases, unless of course they seek financial anarchy. To wit, a top five reason identified in the study to justify tax evasion was that “the system is unfair,” slightly above the argument for tax evasion to protest an unjust war. But a recent poll published in the USA Today this week revealed that 60% of the public thinks the U.S. income tax system is unjust. So all those who evade taxes to protest the war in Iraq must explain why their particular moral convictions are entitled to special dispensation, while a majority of Americans who have a different moral objection are not entitled to such consideration.
Roger, This is a very important discussion and I’m glad you’ve raised it. I have a hard time with most if not all ethical arguments for tax evasion simpliciter but as my reasons for this involve enormously complicated questions of political obligation and responsibility, as well as questions of political authority in a putatively democratic society, I’ll spare you the details. However, I can sympathize with the kind of partial tax evasion wherein an individual, owing to matters of conscience (a faculty sometimes trivialized owing to its indiscriminate invocation…), withholds, say, that percentage of tax devoted to the war in Iraq. Of course one problem here is accurately determining what that figure might be. I have far more trouble, however, with those individuals who withhold all monies believed to represent the defense budget of the military-industrial complex, without some alternative system of defense ready-at-hand to replace the existing colossus. Contemplating tax evasion I think necessarily involves a sort of consequentialist ethical reckoning, whatever other ethical theories or perspectives animate the evader. In addition, principled partial tax evasion should go hand-in-hand with suffering the legal consequences of one’s actions, something along the lines of a Gandhian theory of civil disobedience (again,… Read more »