Tax and Liberty
On Twitter, I follow people of many different political persuasions, for the sake of “balance” whatever that is.
The libertarians – with whom, as a liberal, I tend to sympathise – view all taxation as theft; while the tax-justice people think the same of tax evasion.
Tax is illiberal: it’s something that’s compulsory. On the other hand, I don’t see how any nation state can function without taxes, and – like it or not – we live in a world of nation states. It is, on the whole, better to have a nationality than to be one of the world’s dispossessed refugees.
Nation states are organisations to which we as citizens belong. As free citizens, we should have the right to decide whether or not to belong to a particular state, depending on whether we support its values or want to live in the territory it controls, and so we enter into a compact with that state, to obey its laws and to pay its taxes. We are unfree to the extent that we cannot always freely choose which of the worlds’ nation states to belong to; as a liberal, I think all states should have liberal criteria for citizenship (and never, though this is for another rant, based on ethnicity or faith); I would like to be able to choose to be a citizen of Israel or Japan or China or the USA or Liberia or Britian, depending on where I wanted to live and whose values I held.
But because we can’t freely choose our nationality, we are not fully free citizens. Like it or not, we have to obey the laws and respect the institutions of the nation to which we belong, and that includes paying taxes. We are free to argue that taxes should be less or more, or that certain laws should be different, but we do have to pay the taxes prescribed by law. When taxes become semi-voluntary, as they seem to be to Goldman Sachs, and when the rich can pay lawyers and tax advisers to reduce their tax bill, we have a broken and unjust tax – and legal – system. It is right that the authorities should tighten loopholes; it is wrong that they should do deals on a handshake with American investment banks.
I don’t see the moral or ethical distinction between a rich person paying a lawyer to pay less tax and a poor person not declaring his cash work to the benefits office because if he did they’d cut his benefits pound for pound. One is lawful because it is lawyered, the other technically criminal, both are the result of a broken tax system.