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Tuesday 24 July 2012

Tax and morality: Complicated laws make gaming the system inevitable

"The tax code is never neutral and can alter behaviour in ways that legislators never intended. Indeed, I believe this is at the heart of the debate about tax avoidance," says Prof. Anthony J. Evans.

In this week's column for City AM, Anthony tackles the current debate regarding tax avoidance and tax evasion, pointing out that while one is legal and the other not, this has no bearing on the issue of morality. "In Soviet Russia, Stalin raised taxes to exorbitant levels to deliberately crush the peasant farmers. Under such extreme circumstances, tax evasion can be morally justified.

"There are actually three ways in which people reduce their tax bills. The first is tax evasion, which is simple to define because it is illegal and refers to actions outside the tax code. The second is tax planning, which is using the tax code as it is intended. The third is tax gaming, which is exploiting loopholes within the tax code in ways that policymakers had not intended..."

To read the full article, pick up your free copy of City AM from reception today. Alternatively, you can click here to read it on the City AM website.

All of Anthony's columns are archived here.

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