Mote, Meet Plank

A politician by the name of Gauke, who holds the gloriously British title of Exchequer Secretary to the Treasury, tells us that it is “immoral” to pay tradesmen and domestic help in cash.

This perhaps ignores the fact that small cash payments usually have more to do with evading pointless paperwork than with evading taxes.

Mr Gauke should know this. Unusually among British politicians, he has some practical experience relevant to his portfolio: he was a tax lawyer in private life. Somehow we doubt his clients paid him substantial fees in order to ensure they paid as much tax as possible.

However, he proved his legal expertise when he claimed the Stamp Duty on buying a second home as a Parliamentary expense. That he got away with it qualifies him to advise on the law – but not to lecture us on morality.

The authors of this blog were raised in the Anglo-Saxon Protestant tradition which teaches that paying taxes is a both a legal and a moral obligation. For conscience’ sake, pay all taxes to whom taxes are due, Saint Paul told the Romans – even when the one to whom taxes were due at the time was the emperor Nero. Strange historical fact: some taxes, like the early Crusade levies were effectively voluntary – people paid freely because they felt it was their duty.

Yet that sense of duty is being strained by our greedy, arbitrary, oppressive, intrusive, incomprehensible, bureaucratic, and needlessly complex tax system. At what point does revenue collection become a protection racket?

We are told we should pay taxes “for schools and hospitals” – but only a fraction of tax revenues go to worthwhile services. Far more goes to the politicians, the bureaucrats, the eurocrats, and the quangocrats, their salaries and their pensions, their vanity projects, their mismanaged contracts, their counter-productive wars, their friends in the banks and big business, and, of course, paying Mr Gauke’s tax for him.

Any tax men reading this – there is ample reason to fear Big Brother in this respect – need not get excited: for our part, we are sticking with Saint Paul and paying what we must. We pay for the same reason we might pay protection money to a gangster: it is less hassle. Still we suggest that a tax system that has to rely on fear rather than conscience and duty is a far greater immorality than our poorest citizens being given tiny sums in cash.  

Feel Good About Yourselves

With public confidence in politics, the media, the banks, the legal system, the police, and big business all in rapid, and for the most part deserved, decline, perhaps the time has come to do more to celebrate the heroes on whom all that is best in modern life depends: the entrepreneurs.

The management theorist Peter Drucker defined entrepreneurship as transferring resources, including time, capital, labour, money, and knowledge from a lower to a higher state of productivity.

In other words, human and natural resources would achieve nothing unless someone had the enterprise to put them to good use. They would lie idle. Mankind would not have progressed beyond the caves without the initiative of the relatively few individuals willing to take risks and try new things. So entrepreneurs are behind every real advance in human civilisation. They were not necessarily the people who had original ideas. They were the people who put those ideas into practice, which may be more important.

Should any complain that some entrepreneurs are very well rewarded for that, they should note that we have committed ourselves to be rewarded only in direct proportion to our providing for the needs and desires of others, no more, no less. If we fail to serve those needs and desires, we fail to sell our products and services, and we get nothing.

If we succeed, it means other people consider what we provide is useful to them. The principle that control of resources should go to those who have done most to meet the needs and desires of others seems morally right, as well as the most efficient way to organise an economy. It is a democratic principle: people vote with their wallets. Certainly it is a more democratic, efficient, and moral system than any of the alternatives that have been offered.

Finally, in a world divided by ideology, ignorance, egotism, greed, and the misuse of religion, doing business is one of the few things that can bring members of different branches of our diverse species together for their common good.

King Edward VI once provided a Company of Merchant Adventurers who were exploring unknown lands with a letter of introduction. In it, he wrote, “Of all men, the merchant is most deserving; for God, in providing for mankind, ordained that all his needs should not be found in any single region, in order that each region should have need of others, and friendship thus be established among all men.”

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