Tax planning, tax avoidance and tax evasion all fall under a single grouping by the fact that they all result in a reduced tax base of a country and thus the concept is questioned from an ethical perspective. Tax planning also has roll-on consequences on good corporate gov-ernance in addition to social impacts in both developing and developed countries. The Utili-tarian, Deontological and Virtue theories as well as Christian ethics provide explanation to the claim that tax planning, considering social and corporate governance dimensions, does not constitute ethical behaviour.
The main purpose of tax planning is to minimise tax liability. One of the primary grounds for this tax is federal revenue to fund a country’s advancing infrastructure, public service and delivery thereof. Less tax revenue equates to limited financing for the improve-ment and efficiency of the likes of state hospitals, law-enforcement and state-run education, thus restricting the benefits that society can receive from these public services. This is of greater detriment in South Africa than in developed economies as it fuels the on-going cycle of the poor standard of living. Paying taxes is vital in both developed and developing econo-mies in order to maintain and improve standards of living. In accordance with the ‘Greatest Happiness Principle’, from Utilitarian ethics, “happiness for the majority” can be associated with social responsibility. In this case the majority is society, from which a good standard of living and well-being will contribute to their happiness. Therefore the act of tax planning conflicts with this principle as it is for self- benefit and the taxpayer is somewhat hindering the rest of society’s path towards happiness by paying less tax.
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... yours.” In addition, Romans 13:2 gives this warning: “Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves."
Drawing from this, avoiding tax is morally unethical according to Christian morality, as avoiding tax is rebelling against authority and therefore against God.
The detriments of tax avoidance and evasion in developed and developing economies far outweigh the benefits. After evaluating these practices from four ethical perspectives we can confidently agree that tax avoidance and evasion is unethical. We need to ask ourselves if self-benefit is more important than benefiting the community and other stakeholders. Saving money is not reason enough to ethically condone tax avoidance. Some will never be con-vinced, but every little bit of tax paid helps the economy.
I have been given the opportunity to take an ethical controversy and explore how six different ethic theories would apply to the situation. The ethical dilemma is such, “Investment brokers sometimes have a few clients who live hundreds of miles from their offices. For example, a Wall Street broker may provide investment counseling for his hometown relatives in upstate New York. By arranging to see them during his vacation visits home, he can claim his plane fare or car rental fees and perhaps even many of his meals as business expenses. In other words, he can deduct them on his tax return or, if he is employed by a company, claim them on his expense account”. In this essay, I will discuss Utilitarianism, Kantian Ethics, Natural Law Theory,
...-21) And even further on, Paul asserts our position relative to government as well when he says that we should submit to authority because the authority is there by God’s power and design (Romans 13:1-7).
sinful so that they must be governed but those who govern must be accountable to
Broadly, the divine command theory is a religious moral code in which God’s commands determine what human beings should or should not do. As such, it is expected for theists to subscribe to the divine command theory of morality. The deontological interpretation of the divine command theory separates actions into one of the following categories: mandatory for human beings to perform, prohibited for human beings to perform, or optional for human beings to perform. Those actions that are mandatory to perform are ones which have been expressly commanded by God. Failing to commit a mandatory action would be defying God’s commands, and thus, according to the divine command theory of morality, immoral. Actions that are prohibited are ones that God expressly commands human beings do not perform. Consequently, to perform a prohibited action would be immoral. Finally, those actions that God does not expressly command that human beings should perform or should avoid performing are optional; there are no moral implications to performing or not performing such acts. The rightness or wrongness of an action is inherently and wholly dependent upon th...
...y for his nation, state or city. However immoral, this is necessary for the progression and continuation of the area, and can only be achieved through the respect obtained with fear. By tying the church to the government, people expected the government to behave morally and to abide by the rules of God, but often times, an entirely moral ruler will be overthrown.
Taxes in the United States include payroll taxes, property taxes, sales taxes, and a multitude of others. These taxes may be imposed on individuals, business entities, estates, trusts, or other forms of organizations. In general, there is a lot of inquiry on the current tax system. With endless loopholes, a regressed economy, and corruption there has been widespread anger on the current structure of taxation. Consequently, the wealthy have managed to become even richer despite the economic crisis. Furthermore, many taxpayers in the upper class have found loopholes to avoid substantial taxation or otherwise known as tax evasion. (Stewart 2013) Tax evasion has only grown over the years and with the national debt has become a major issue. What is more, is the intense complexity of the entire taxation process. Addressing all the issues and problems regarding the taxation structure is a meticulous and arduous process. With this in mind, politicians from both parties have tried to address individual issues within the taxation paradigm. Being that the United States has the highest corporate tax in the globe, politicians have tried to change policy regarding taxation on businesses. (Sullivan 2013) How...
Black, P. A. (2006). 'Sin' Taxes and Poor Households: Unanticipated Effects. South African Journal Of Economics, 74(1), 131-136.
Wagner-Tsukamoto, S. 2007. Moral agency, profits and the firm: Economic revisions to the Friedman theorem. Journal of Business Ethics, 70, 209–220.
“I did not intend to pay, before the gods,/for breaking these laws/because of my fear of one man and his principles.”
A growing trend in our society today is corporate tax evasion. It has become increasing more common for corporations to pay no or little income tax, and in some cases actually receive money back from the government. It is illegal and therefore deviant by that definition. Corporate tax evasion (using borderline legal means) is widespread. White-collar crime is a term that is usually applied to crimes associated with business that do not involve violence or bodily injury to another person. Corporate tax evasion falls into the category of white collar crime.
Recall the tale of an impoverished man who steals a loaf of bread to feed his starving family. In the instance when two moral obligations collide, the only way to comply with one is to violate the other. No matter which course is chosen, the other must be ignored.”(Freeman, Engels & Altekruse 2004) Stealing and breaking the law challenges the philosophy of breaking the responsibility of caring for one’s family. Accountants need to think clearly, challenge the possibilities, understand the options, and acknowledge the consequences. The choice to steal bread will vary from one person to another, but as Christians, dying of hunger is more of a reward than a consequence. Accountants can learn from examples of people and companies who have been faced with pressing ethical dilemmas. Accountants can learn from Bernard Madoff and his $61 billion ponzi scheme that ruined thousands of people’s life savings (Freshman 2012), or Enron “circumventing the rules, temporarily changing or suspending the rules, and outright thievery to achieve his objectives” (Gini 2004). Knowledge about the past will lead people to make wise ethical decisions. The world can clearly see the consequences that these people and firms have undergone and do not want to follow in that path. There are responsible businesses, like Frito-Lays who have a major go green campaign. They have a better business by reducing their natural
In business the primary focus is on maximizing returns to owners or shareholders. The manner in which a business conducts itself while attempting to make its profit can be considered ethical or not. For instance, a business that has a positive sense of social responsibility will make some effort to have a positive impact on society, contributing to the welfare of the community in which it operates in some way or another. Unethical practice in business could include the converse of this, where a business is solely concerned about its profit and does not attempt to mitigate the impact of its operations in that society. For example, a mining exploration company that does not attempt to ease discomfort and inconvenience of the people that are displaced by its operations could be considered unethical.
Gurría, Angel. "Improve tax fairness and help the developing world." OCED. Organisation for Economic Co-operation and Development, 24/04/2009. Web. 9 Oct 2011. .
When working within any professional body, an individual will be subjected to circumstances in which personal ethics will come into play. The Accounting profession is no different as ethical questions arise as part of any working day and can effect how an individual or the company conducts business. These questions can vary greatly in practice from selection of new customers to the rates at which those clients are going to be charged. These ethical questions are raised regularly within the workplace and each employee will react to them differently. The varying reactions will depend on the morality of each individual, or each employees own ‘ethics’. As each employee has their own set of values companies must be alert to the fact that some of their employees may have more ‘flexible’ morals than others. This ‘flexible’ morality can lead to corruption and manipulation within the workplace and can give companies serious problems. As a result of this, all of the main professional accounting bodies have begun to re-introduce mandatory courses teaching ethics to their employees. As well as this, ‘A Guide to professional ethics’ was published which contains a number of different principles in order to govern the behaviour of accountants and also to identify and reduce the greatest areas of risk with respect to unethical behaviour.
There are some arguments, having a faint measure of plausibility, that have served politicians, charlatans and assorted do-gooders for well for over a century in their quest for control. One of those arguments is: capitalism primarily benefits the rich and not the common man. That vision prompts declarations such as: Congressman Richard Gephart's assertion that high income earners are "winners" in "the lottery of life." Then there's, Robert Reich, former Secretary of Labor, who says high income earners the "fortunate fifth." These nonsensical visions lead to calls for those who've been "blessed" to "give back" either voluntarily or coercively through the tax code.