Tax avoidance has been a high-profile issue in the UK over the past six months or so. And more recently, it’s getting picked up in the US as Apple’s affairs get a bit of a grilling. But what I’ve been fascinated about is that the outrage has not been that they’re doing something Illegal, but rather, that they’re doing something Immoral. Not just that, but also that the public backlash has been huge.
When someone high-profile like comedian Jimmy Carr got outed as using a tax avoidance scheme, it caused such a stir that within hours, he’d made a public apology, and promised to exit the scheme immediately. When Starbucks was hauled before Parliament to answer questions on why they paid so little tax, they had to quickly back down when their sales took a huge hit. (Google, however, is a lot more insulated from this sort of public opinion, and thus took the route of telling the government where to get off, and got away with it.)
The irony, for me, is that if you asked any of those people whether they’d like to pay less tax legally, they’d say yes. So why do they (and their elected politicians) get so het up about it? I can only surmise that it’s a bit of envy – “It’s not fair that they get to save so much on tax when I can’t”.
For me, the issue is simple – the government gets to set the rules, and everyone else needs to play by them. If the rules are set in such a way that they’re full of loopholes, then it’s their problem. Tax rules are, almost universally, far too complicated, and provide ample opportunity for bright lawyers to find their way around them. But they’re completely under the control of the government, and blaming citizens and companies for following the rules in an unexpected way is just petty. If they don’t like the tax avoidance, they should change the rules, not use emotive words like ‘morality’ to try to shame the nation into compliance.