Tax avoidance or tax aversion? Why we need a vision
The investigation into the K2 tax avoidance scheme prompted understandable outrage. But rather than questionning the morality of the individuals involved, it would be more useful to ask why people try to pay less tax in the first place. Less about individual tax avoidance, more about our society-wide tax aversion.
It’s a serious issue – apparently costing the UK £69.9 billion per year – and it’s worth remembering it isn’t confined to the super wealthy (and let’s also remember not all rich people avoid tax). While Jimmy Carr may have admitted his terrible error of judgment, the dilemma he faced (in his case “I met with a financial advisor and he said to me ‘Do you want to pay less tax? It’s totally legal’. I said ‘Yes’.”) is the same one that leads many others to take cash payments, or to pay dividends instead of larger PAYE salaries, or to invest money off-shore. Let’s face it – rich or poor, we don’t seem to like paying tax.
Why not? While greed certainly plays a part for some, the underlying issue is that we don’t consider tax to be the best use of our income. We don’t tend to think giving the government £1,000 to spend for us will give us anywhere near the same benefit as spending it ourselves – whether our motives are philanthropic or otherwise. This is a problem.
The solution? It comes down to having a vision for society. A vision we can all (or mostly) buy into, and see purpose, value and compelling reasons to support. Right now I don’t believe we have that vision. When we do, then we could consider what we need to make that society happen. We could decide which services to provide commercially, and which might be better provided as public services – and these we would fund by pooling our resources. So what would these public services be? How should we pay? And should some people pay more than others?
Agreeing on the answers to these questions is always going to be difficult, but it is impossible without a vision to guide us. Getting that vision is a process with which everyone has the capacity to engage, but only if we all have access to the better conversations – and better questions. Making those conversations accessible to all may seem a tough challenge, but well worth the prize of clearer direction and greater social cohesion.
Keep the ideas, and the conversations, flowing. We can do it.