Tax Avoidance: A Moral Duty

By Darren Smith, Weekend Contributor

While it is a truism that in many respects some form of taxation is needed to provide necessities to a society, in practice many government and social detriments arise as either a consequence to or are derivative of tax policy. I’ve found for myself that fostering a personal goal of avoiding specific taxation or in many cases excessive taxation generally comports with a greater advocacy of morality in several beneficial forms.

First I must emphasize the difference between Tax Avoidance and Tax Evasion.

Tax Evasion is the criminal and / or civil refusal to make payment of taxes a taxpayer is legally compelled to provide as a consequence of earnings or purchases.

Tax Avoidance is the lawful participation in a practice where a taxpayer is not legally required to pay taxes or he or she chooses to abstain from or to minimize activities that generate lawful tax liability.

I am by no means advocating tax evasion and I strongly discourage others to engage in such. While we have an obligation to pay the tax we are required, we are also equally obligated to make use of any deduction or credit of tax we are due.

I believe this topic can be discussed in lengthy detail but for the purpose of brevity a primer should suffice.

In tax avoidance as a moral duty one has to probably accept the notion that not all goals sought by government or especially politicians are benevolent. For nearly the past two decades the U.S. Federal Government’s political leadership has actively engaged in what I consider to be highly immoral behavior. At it’s worst it has willingly engaged in instigating completely elective foreign expeditions and wars that resulted in the deaths of hundreds of thousands of foreign civilians, and thousands of American military personal and citizens. In fact it could realistically be argued that the resolve “to get” individuals who our politicians did not like, such as Saddam Hussein , Assad, and Quadaffi, was so prevalent that Congress and the then presidents convinced themselves that close to a million lives were worth taking out these three men. Men I might add posed no true threat to the people of the United States. So over a trillion dollars of tax payer supplied money and treasury securities went toward those debacles.

I do not take issue with the idea of needing a military to protect ourselves in the ordinary sense, but lately in my life politicians have shown on the federal level that they believe a tool for personal political gain is to cause the death of civilians and our soldiers here to “get the bad guy”. And that looking tough works to get hired in an elected position. I am not willing to reward that behavior.

Often in the past wars have ended simply because a nation depleted itself of money and materiel and could no longer prosecute the battle. It could also be argued that a government being awash in the financial means to fight an elective war would be more tempted to use such means than if it was constrained by a limited budget. For me I do not agree with providing that means so easily.

The first example of “getting the bad guy” I came to realize in my life was President George H.W. Bush’s need to get Bad Guy Manuel Noriega. back in the 1980s. Most of you readers know of this affair so I won’t repeat it. For those who do not feel free to search for “Operation Just Cause”, the almost complete joke of a name our government gave that endeavor.

I remember having a training class with two officers who formerly served in U.S. Special Forces during the invasion of Panama to oust Bad Guy Noriega on drug trafficking charges (or so that was the excuse)–A police action as it was called then. One of the officers said they were sent there to get Noriega and when in country found themselves pinned down by sniper fire. So, they called in an airstrike which leveled a building. Of course they had to defend themselves but I had to wonder what kind of police action this was. I knew that generally when we went to take down a drug dealer in the county it generally did not involve airstrikes and blowing shit up all over town. But it seems that when it involves bad guys our federal government doesn’t like, well what’s a few hundred or thousand civilian lives anyway? I must have missed something when I went through the academy. I thought we had to preserve the peace not destroy it.

Controlling the size and over-reach of government

The old maxim goes, “a government that is big enough to give you everything you want is strong enough to take everything you have” and the more money we supply government the greater it grows in terms of control and want of increasing revenue. Such is the way of empire building.

I’ve seen many examples over the years where politicians here at the state level only curtailed spending when faced with either a crisis of revenue shortfalls or when the voters finally had enough and revoked their ability to tax excessively via the Citizen’s Initiative process or by removal at the ballot box. If we continue to allow government to be provided with limitless amounts of tax revenue it only encourages excessive spending and decreases any need for efficiency. And once again the pols will demand increasing tax rates exacted against citizens just to keep the juggernaut rolling. And the bigger it is, the more it wants to encroach upon others.

The Practice of Tax Avoidance results in stronger, more independent living.

Consider the notion of Conspicuous Consumption, that is the never-ending goal of spending money on “things” to elevate one’s self-image. It is the antithesis of Simple Living.

Living beyond one’s means results in many greater tax liabilities, whether it be in the form of higher amounts of sales tax or engaging in activities that generate tax itself. The simplest form of this involves eating in expensive restaurants in high-sales-tax cities as opposed to buying ordinary food at a grocery store (tax free) and eating at home for fifteen-percent of the cost. The food is also healthier I might add.

The stupidest example I personally saw was a Seattle based restaurant that charged more for pop than beer (due to Seattle’s sugared beverage tax) and because of the higher costs restaurants must pay due to over-regulation , the restaurant added an extra labor cost surcharge which was also subject to sales tax. In the end it cost more than five day’s worth of groceries just so that I could pay more tax and reward a city that is governed by some of the biggest fools in the state.

Yet, if instead we buy ordinary groceries, and don’t support a government that is incompetent, if enough restaurants fail maybe businesses might actually begin to exert some action against bad legislation. Surely this is a bit harsh, but who really motivates politicians, the voter or corporations?

Also ,if we looked carefully as a measure of what type of house or car to buy by the amount of tax we must pay resulting from such a purchase we might soon begin to realize that perhaps we don’t need the biggest, most expensive, most energy intensive, and most arrogant example of a dwelling or vehicle. An eight thousand square foot house that we can barely afford is not only more costly on the environment but can we morally justify our actions when a two thousand square foot house is just as livable? How much more hubris do we need when so much of the world would be greatly pleased just to have clean water and electricity. If instead we took some of that cost savings or superfluous property tax (which would probably be wasted otherwise) and gave it directly to a legitimate charity that actually bettered the lives of others less fortunate than we. Or we could at least be somewhat selfish and keep the money ourselves and not be as strapped for cash.

Beneficial Tax Law Can Elicit Morally Sound Behavior

While it can be debatable as to whether or not subsidies and tax credits result in a net benefit to the intended recipient generally speaking there are times where it does much good.

When deductions to charity are permitted there is a direct link between the amounts individuals give and what tax breaks they receive, and in the absence of such charity is curtailed. The per-capita generosity for Americans is one of the highest in the world and we have a tradition of tax deductions for charitable giving. (Though unfortunately this has lessened recently due to tax law changes). We have also benefited from tax credit schemes that encouraged the purchase of greener vehicles and the willingness of investors to engage in the construction of Tax Credit low-income housing projects to house the under-served. In the latter, the desire for tax avoidance actually put roofs over people’s heads.

I believe it is incumbent upon people to strongly consider how government will use what is given to it. The more power it is given, the less benevolent it will inevitably become. We only need a cursory understanding of history to recognize how usual this is the case. And money is as inseparable from power as it is from greed. The more money you give to politicians, the less freedom you will have.

By Darren Smith

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