It goes without saying that tax evasion is illegal. But is it wrong?
That age-old question has once again floated to the surface here in a survey of British opinion published last month in The Times (London). More about that later. First, though, a brief reminiscence -- about a conversation I had five years ago with a carpenter in the North-of-England city of Newcastle-upon-Tyne.
He earned a decent living working for the local county government. At that time, his job consisted largely of boarding up windows in vacant government-owned buildings.
But being an energetic young man, and living under a steeply inflating economy, he sought to augment his income. So in his evening and weekend hours he became a building contractor -- putting up garages, taking off porches, and the like. His only requirement was that he be paid in cash -- cold, hard, unreportable, untraceable, and untaxable cash.
Given the tax burden facing Britain's legal and licensed contractors, he could always underbid them -- sometimes by as much as one-third. And given the depressed economic conditions of that part of the nation, the householders who employed him were eager to save every penny they could. When I talked to him, he was earning more in the moonlight than by day.
Some weeks afterward, at a luncheon given by the foreign press corps in London for Sir Geoffrey Howe (then chancellor of the Exchequer, now foreign secretary), I raised this example, anonymously.
The chancellor, a Conservative, very nearly sighed. Yes, he conceded, the so-called ``black economy'' was a serious problem. But bringing the tax dodgers to ground would require such a vastly expensive effort that it would hardly be worth it.
He did not say what was on many people's minds: that to slice deeply into the black economy would topple many otherwise law-abiding Britons into near-poverty, so accustomed had his countrymen become to what they call ``the fiddle.'' He did not say the black economy had become a widely prevalent way of life.
That, however, is apparently what this latest survey says. Among the 2,058 Britons polled by the highly respected Market & Opinion Research International (MORI) group:
Less than one-third thought it wrong to pay cash to someone who does not charge value-added (sales) tax. Among those younger than 25, the proportion drops to a mere 18 percent.
Only a little more than one-third thought that accepting cash to avoid tax was wrong -- dropping, again, to 22 percent of the under-25s.
And although two-thirds thought it wrong for those receiving government unemployment payments to earn unreported money on the side, barely more than half the under-25s thought it wrong to do so.
It is tempting, perhaps, to mount the pulpit of self-righteousness and ask how a population so widely esteemed for its sense of honor can so broadly countenance the unethical. Tempting, but too shallow. Far more fruitful, in fact, to ask how the situation could have arisen in the first place.
And there the finger must certainly point to a string of welfare-state policies which, through the years, have sought to redistribute the nation's wealth to help the less well off. The motive has not been ignoble, given the suffering that poverty and near-poverty entail -- the wreckage it can make of marriages, educational opportunities, and social responsibilities. The motive even has an august British precedent: Robin Hood and his band of merry men.
But there's another precedent to look at, too, and that is the experience of the American colonists. Some were rebels from the outset. But many were Tories, earnestly desiring to obey the English laws and pay their English taxes -- until laws and taxes pushed them so far that something buckled.
What buckled for them was their unquestioned obedience to British law. What may well be buckling for Britain today -- and for many other steeply taxed nations, the United States included -- is a sense of ethics. The responses to the MORI poll plainly suggest that the ethical base is shifting -- that, under the twin pressures of high taxes and a slightly sour economy, a people's sense of right and wrong can begin to fray.
And that, in the end, may be the great unstated cost of welfare-state taxation policies -- that they place before an essentially upright population some temptations that are almost irresistible.
Granted, the goal of such taxation is to relieve the sufferings of a minority. But if the result is to drive the majority into a blurring of right and wrong -- and the MORI poll suggests that such is the case -- then the cure may be worse than the illness. The cost of a falling ethical barometer -- in a nation's trading relationships, its international authority, and its self-esteem -- is a cost no legislator, wondering whether or not to raise taxes, should be willing to bear.
A Monday column CHART: Dodging Britain's tax man All % Over-65s % Under-25's %
Paying someone in cash who 30 44 18
doesn't charge VAT (value-added tax)
Accepting cash for some work 35 49 22
to keep some earnings free
of VAT or income tax
Paying cash to someone if you suspect 41 49 28
he or she isn't paying income tax
People on the dole earning some money 67 84 51
without telling the social security
[unemployment] office All % Over-65s % Under-25's % Source: Market & Opinion Research International survey commissioned by The Times (London), published in October.