By Alagi Yorro Jallow
Tax avoidance is legal. Tax evasion is not. By morally conflating the two we’re making the problem worse. Morality is subjective, which is why we have laws surrounding taxation and other pretty much everything else to regulate individual interactions with others and the state. Mr Ceesay your rejoinder to my article is very constructive and informative but we need to consider the what is legally right and what is morally right.
Everybody does it, because everyone is well within their rights to do it. It’s legal. I can’t imagine we are decrying a strike or similar action which also skates close to the law. That would-be hypocrisy, wouldn’t it?
At a time of massive wealth and income inequality, we need a progressive tax system everywhere that is based on the ability to pay. It is unacceptable that major corporations have paid nothing in federal income taxes, and that corporate CEOs in other countries often enjoy an effective tax rate that is lower than their secretaries. For example, business man Warren Buffet second wealthiest person in America admitted paying less tax than his secretary. Thanks to the loopholes of tax avoidance! Special breaks and loopholes in the tax code favor wealthy real estate investors like Trump and do nothing to boost the economy. These breaks likely made it easier for him to claim losses of $916 million in the 1990s and avoid paying income taxes in subsequent years.
Today, America lose over $100 billion a year in revenue because large corporations stash their cash in offshore tax havens around the world. That is unacceptable (Wall Street Journal,2016) Special tax breaks and loopholes in a corrupt tax code enable billionaires and powerful corporations to avoid paying their fair share of taxes while sticking the burden on the middle class, Sanders said. It’s time to create a tax system which is fair and which asks the wealthy and powerful to start paying their fair share of taxes.”
If we are serious about reforming the tax code and rebuilding the middle class, we have got to demand that the wealthiest and largest corporations pay their fair share in taxes.
For Example, Sen. Sanders’ tax reform plans that goal by closing loopholes that benefit the wealthy and well connected, making the tax code more progressive, and establishing a tax on Wall Street speculators whose greed, recklessness and illegal behavior nearly destroyed the economy seven years ago.
Life is cheaper for the rich. That holds for many reasons – not being saddled with personal debt, for example – but being able to use devious means to avoid paying tax is one privilege of the rich.
Tax avoidance is bending the rules of the tax system to gain a tax advantage that law makers never intended. To avoid tax is to not pay tax law-makers intended you to pay; it is to go against the spirit of the law without going against the letter of the law; it is to exploit loopholes that were
It is entirely intentional; it exists by design. You are not going against the spirit of any legislation by having an audacity; you are behaving as the law expected you to. Tax avoidance really underlines how different life is for the rich and for everybody else. Wealthy individuals can afford accountants to zealously hunt down loopholes and exploit legislation.
To avoid tax is to scrounge off the state. Rich individuals and major companies depend on the state: whether it be a financial system that was bailed out by the state; state-funded infrastructure; tax credits to subsidize the wages of their low-paid workers; a law-and-order system to protect them and their property; an education system to train up their workforce and those of other institutions they depend on; and so on.
Tax avoidance – particularly in an era of cuts and austerity – is indefensible. But it is a symptom of a wider problem. American or British societies favors a mean and greedy elite. The financial disaster brought this injustice into acute relief, but there has been a concerted attempt to redirect popular anger to those at the bottom of society. Maybe, just maybe, that anger is beginning to shift upwards instead.
Everybody does it, because everyone is well within their rights to do it. It’s legal. I can’t imagine we are decrying a strike or similar action which also skates close to the law. That would-be hypocrisy, wouldn’t it?
