Priorities & The Panama Papers

How priorities change.

Studying both the mainstream and social media hysteria over the revelations of the Panama Papers, would convince a visitor from outer space that tax evasion and tax avoidance were about to destroy life on earth. That  terrorism, Islamic or not, violent crime, dread disease, poverty, the pervading grasp of big government and drought were mere irritants. Not the most serious threats to personal freedom, stability and security in the Western democracies since WWII and the cold war.

Is it because I am a Baby Boomer and have survived far worse experiences than worrying whether a few politicians, business owners and corporate executives have arranged their affairs to minimise taxes? Or moved money to tax havens.

There is a difference between illegal tax evasion and completely legal tax avoidance. One of the priorities of senior executives of public corporations is to maximise return on shareholders investments. That’s one of the biggest sources of revenue for pension funds. Those executives have a duty and an obligation to their shareholders to use every legal means to minimise taxes.

Pensions and investments make the difference between mere survival and a more comfortable life for millions of pensioners. Pensions that would not be possible if corporations did not generate profits.

Owners and managers of privately held businesses, and professional have a duty to minimise taxes for the health of their businesses and the continued employment of their employees. Wage earners should be using legal tax saving measures to make sure they keep as much of their earnings as possible for the benefit of their families.

One of the reasons for high earners to use tax havens is the immoral tax system in most countries. Tax rates increase as incomes rise. There can be no moral justification for forcing those with high incomes to pay a higher percentage in tax than those in the lower levels. In no other area of society are one group of people compelled to pay a higher price for exactly the same services than others.

There are strong practical reasons for this system, it is far easier to force a small group of people to pay a lot than a large group a little more. If every one was forced to pay their “fair share” there would be riots and blood in the streets.

But it cannot be morally or ethically justified.

It is discriminatory.

The Bible tells us all to pay 10% of our income. It does not tell some to pay 5% and others 50%. It also tells us to help others as we are able, not to fill bureaucratic coffers.

The only “fair tax” system is a consumption tax, sales or value added taxes. Where the user pays in proportion to his or her usage, not income. That way the wealthier will still pay more tax if they choose to spend on more expensive products and services or use more of them.

Many governments have introduced types of consumption taxes, but have retained income taxes which can be increased to raise extra revenue by penalizing small sections of society Governments justify this by appealing to the masses’ sense of entitlement and envy of those who have been more successful.

The liberal media’s use of emotion filled terms like “inequality”, “fair share” “tax dodgers” have successfully changed many otherwise intelligent people’s priorities so that responsible business owners, corporate executives and others are portrayed as criminals while drug addicts, low-level criminals, terrorists and those that prey on young children are seen as victims.

There will always be the criminal element who try to evade any taxation. They deserve no sympathy and should be dealt with.

However is it any surprise that those that can, will try to protect their assets from both punitive and immoral taxation, and frivolous litigation by using all legal means to do so, including moving it into offshore investments.

I have more thoughts on the immorality of estate duties and taxes, and capital gains taxes which are taxes levied on the proceeds of investments originally paid for by after tax income.

Tax on tax, definitely immoral and discriminating against the successful.

Unfair and immoral tax rates punish success and reward mediocrity by discriminating against high income earners and rewarding those that make little or no effort.

Yes, there are genuine cases requiring social services, they need to be supported not enriched.

I have been trying to add my customary signature to this post since yesterday, seems like there is a problem with the latest WordPress upgrade to 4.5 which I installed earlier this week. The developers are aware of it and their is discussion in the support forum.

Leave a comment with your thoughts on priorities and taxation.

 

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  2 comments for “Priorities & The Panama Papers

  1. Tim Gibney
    April 16, 2016 at 11:08 am

    Peter, I really enjoyed this blog. This is because truer words were never uttered. It is just jealousy rearing it’s ugly head. Yes, the jealous one’s are those who have less than the one’s who have used these legal places to put money to save on taxes. The jealous one’s usually don’t work as hard either.

  2. Roberta
    April 17, 2016 at 8:36 am

    Up to a point, Tim. There are also millionaires who pay NO taxes. Everyone should pay something.

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