July 24, 2012, by Jonathan

David Gauke and cash in hand: why do we care?

UK Treasury minister David Gauke hit the headlines this week when he claimed that paying tradespeople in cash with the hope of a discount is morally wrong.

The comment comes in the context, of course, of heightened attention more generally to issues of tax avoidance. The comedian Jimmy Carr recently was the subject of much criticism when it was revealed that he had engaged in tax avoidance schemes. In this context, we might think that Gauke’s comments are unexceptional – simply the consistent application of the same principle by which many were prepared to condemn Carr’s behaviour. If tax avoidance is wrong for Carr, what is surprising about saying that it is wrong also for people employing a plumber?

Here are four possible explanations of the fact that Gauke’s comments aroused controversy. First, it may be that people suspect that the tax system is unfair. The morality of avoiding tax presumably depends on the fairness of the demands the tax system makes. People may be inclined to distinguish between plumbers and very rich comics, treating avoidance by rich comics as morally more serious because they believe the demands made of them are fair while those made of plumbers are not.

Second, it may be that Gauke’s focus on the morality of those paying tradespeople seems wrong. He did not claim that it was wrong for a tradesperson to avoid tax (though presumably he also believes that), but instead that it is wrong for people to seek a discount when paying a tradesperson by cash. We may think that the moral responsibility to pay income tax starts and ends with the person whose income is in question. This may be an application of a more general – and highly controversial – ethical principle, the “principle of intervening action”. According to this principle, I am not morally responsible for the foreseen consequences of my action, so long as those consequences are the result of some other agent’s intervening action. Some of those who object to Gauke’s comments may have this principle, or something close to it, in mind. However, would they be happy also to apply it to the issue of gun control laws (where it suggests that moral responsibility for the use of guns lies entirely with the person whose finger is on the trigger, and not at all with the people who make guns freely available)? http://www.bbc.co.uk/news/uk-politics-18943855

A third possible explanation of the controversial nature of Gauke’s remarks is that people may suspect hypocrisy. The behaviour that Gauke criticised is probably quite widespread. People do not, generally, like being told – especially by the government — that commonplace behaviour is “morally wrong”. They like it less when they suspect that some in government might well have behaved in similar ways. But though suspicion of hypocrisy might explain much of the reaction to Gauke’s comments, it doesn’t amount to a reason to doubt their truth. In general, the problem with hypocrites is not necessarily with what they say, but instead with a mismatch between what they say and what they do.

Here is another possible explanation of the reaction. The issue might not be the truth or otherwise of what Gauke said, but his choice of topic. By electing to focus attention on tax avoiding behaviour by ordinary people, he may be thought of as expressing the wrong priorities. Why start there? From the point of view of the Treasury it may make sense, since such tax avoidance probably amounts to a large total of potential revenue lost. But, many people might think, to single out the behaviour of ordinary people is inappropriate in a society that is marked by great income inequality. On this view, it is not that tax avoidance by ordinary people is morally okay, but that someone who thinks it should be the first or main object of concern has the wrong priorities.

 

Chris Woodard

Posted in Ethics