Is tax avoidance morally wrong?

Jimmy CarrMoney and morals aren't usual bedfellows but since the Prime Minister David Cameron spoke out about comedian Jimmy Carr's involvement in a tax avoidance scheme, they've been rather uncomfortably close.

Tax avoidance has gotten everyone talking. Those vehemently opposed have been citing morality, social consciousness and the lack of contribution to society. Those remaining largely nonplussed have been relying on the fact that despite all the vitriol around the topic, fundamentally, tax avoidance is legal.So, are taxes a price for freedom and social advantages? Or is it nothing new and something the government need to sort out before they start throwing stones?

Two of our writers Damian Wilson and Elliot lane, in the yes and no camps respectively, are going to duke out the issue. Read on and please do post your comments below.

Yes - it's a price we should gladly pay for freedom and advantage

The fragrant head of the IMF, Christine Lagarde, chose not to mince her words when advising how Greece could escape its economic disaster.

"You should start paying your taxes." she told them. Adding that she had more concern for starving children in Africa than she did for the Greeks, who she clearly considered authors of their own misfortune.
The Chancellor George Osborne has called tax avoidance "morally repugnant" while the PM's attack on Jimmy Carr over a little legal tax minimisation shows he's obviously of the same mindset.

It's a simple idea. You live in a society that enjoys certain freedoms and advantages but they do come at a price. And that price is your taxes.

So if you don't pay those taxes, as calculated through a tiered system that aims for some degree of fairness, and doesn't even start until around £11,000, then not only are you implicitly opting out of the benefits the rest of us enjoy, you're cheating us as well if you continue to take advantage of them.

Because while, tax cheats might just excuse themselves saying, "oh, it's only the tax man," like Santa Claus and the Easter Bunny, there is actually no tax man per se.

We are all the tax man.

So every VAT eluding 'for cash' deal, off-shore avoidance scheme and simple non-declaration is robbing us all just because an individual or a company is greedier than the rest of us.

And frankly, that's wrong.

The whole irony of tax avoidance is that most often it is those who would have no real problem paying the taxes who choose not to. And the reason is that it's really only those people who can afford the nimble minds of clever bean counters to keep their earnings out of the tax man's reach.

I know a guy who spent an hour with two such accountants discussing the ins and outs of being non-domicile for tax purposes, which landed him a bill of £4,000 for the chat. He later told me it was worth the expense in terms of what he would save in taxes.

That's what makes the fight against tax avoidance difficult. It certainly doesn't make it right.

No, and Jimmy Carr did nothing wrong

The latest tax avoidance debacle proved that the saddest word is 'sorry' after comedian Jimmy Carr capitulated to yet another hypocritical PR stunt from the political classes.

Celebrities avoiding tax is nothing new. In the 1980s, Sir Cliff Richard, Phil Collins and Sir Terry Wogan began filling Scotland with expansive forests where no-one picnics and no-one rambles, to take advantage of the Thatcher government's investment incentives which could be written off against tax. Woodland remains a solid investment as it is exempt from income tax and inheritance tax after two years.

Members of the Irish rock group U2 have been vilified for their tax arrangements and are constantly justifying why they can on one hand campaign for the rights of the socially deprived and oppressed, while still moving their finances from one tax haven in Ireland to another in the Netherlands. The argument is that they are not tax evaders but are just tax efficient, having paid millions to various jurisdictions over the years.

So why has the Prime Minister decided to meddle in the business affairs of private individuals? His party is the supporter of free enterprise and a few months ago cut the wealthy's tax bill to stimulate growth.

Cameron and the Coalition seem to have a predilection towards scoring own goals. After setting up the Levenson inquiry to investigate the immoral behaviour of the British press, the exercise has back-fired on Cameron, creating a modern Star Chamber which has exposed the murky workings and morality of Parliament instead.

He is now throwing yet more rocks in his glass house, as his own father built the family's inheritance in the tax havens of Geneva and Panama City. These were entirely legal and Cameron benefited from a £300,000 windfall after his father died in 2010. His moral compass seems slightly out of kilter.

As a global statesman trying to navigate the UK's future economy through the iceberg-ladened Eurozone crisis, this does seem to be a petty argument to become involved in. The 'shareholder spring' gave City observers hope that politicians would stay out of the micro-management of the financial sector, and stick to rectifying the macro problems. Sadly not.

Carr may have made a "terrible error of judgment" but the HMRC should make that decision in a tax tribunal. And suddenly Gary Barlow is of no interest to Downing St but the Labour Party (far more Take That fans, shurely) decides to pick on him.

If this is the start of the silly season, let's hope the comedic community can give us some better jokes. The Edinburgh Fringe may have a few accountants trying their hand at stand up this year.
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