On the morality of tax avoidance

People were pretty unhappy when Donald Trump claimed that not paying taxes “makes him smart.” Similarly, nobody was impressed when Mitt Romney claimed that he “paid all the taxes I am required to, not a dollar more.”

What these folks do is legal. It’s called tax avoidance, and the more money you have, the harder you and your accountants will work, and the better at it you’ll be. There is an entire industry built around tax avoidance.

From www.ccPixs.com
From www.ccPixs.com

Though I want to disapprove of these people, it does occur to me that most of us do not willingly pay taxes that we are not required to pay. It’s not like I skip out on deducting my charitable giving or my mortgage interest, or using the deductions for my kids. I’m legally allowed those deductions and I use them.

So what is wrong with what Trump and Romney do?

One answer is “nothing.” I think that’s not quite the right answer, but it’s close. Yes, just because something is legal does not mean that it’s moral. But where do you draw the line here? Is it based on how clever your accountants had to be to work the system? Or how crazy the hoops you jumped through were to hide your money? I’m not comfortable with fuzzy definitions like that at all.

What is probably immoral, is for a rich person to try to influence the tax system to give himself more favorable treatment. But then again, how do you draw a bright line? Rich people often want lower taxes and (presumably) accept that that buys less government stuff and/or believe that they should not have to transfer their wealth to others. That might be a position that I don’t agree with, but the case for immorality there is a bit more complex, and reasonable people can debate it.

On the other hand, lobbying for a tax system with loopholes that benefit them, and creating a system of such complexity that only the wealthiest can navigate it, thus putting the tax burden onto other taxpayers, taxpayers with less money, is pretty obviously immoral. Well, if not immoral, definitely nasty.


3 thoughts on “On the morality of tax avoidance”

  1. “Nothing” is the correct answer and the politicians who throw stones at others for following the law and the horribly complex tax system that the politicians made to benefit their wealthy benefactors should throw stones at themselves.

    1. As I said, playing the rules is not immoral. Changing the rules in your own favor probably is. And people like Romney and Trump do play that meta-game.

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