The man who likes paying tax

Where Rupert and ordinary folk differ: we actually pay for stuff

IT’S TOUGH BEING a government official. People abuse you all the time and you have to stay polite. Well, here’s the answer: respond with a nice dose of ice-cold irony.

Below is an example from a gentleman named Lee who works for the tax department in the UK, sent to me by reader Tom Marrin.

This is a true story. A UK citizen named Addison wrote to tell the tax office to stop sending him “begging letters”.

Taxman Mr Lee replied:

“I must take issue with your description of our last as a 'begging letter'. It might perhaps more properly be referred to as a 'tax demand'. This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.”

Mr Addison complained that the tax department demanded money from him because they saw him as a "sodding charity".

Mr Lee replied that on the contrary they saw him as a citizen…

“with a responsibility to contribute to the upkeep of the nation as a whole”.

Mr Addison wrote that the tax authorities were “sucking the very marrows of those with nothing else to give”, referring to the organic material inside human bones.

Mr Lee replied that they did not do so, since…

“the sheer medical logistics involved would make it financially unviable”.

Mr Addison said that receiving his tax demand made him want to “give the whole foul jamboree up and go live in India”.

Mr Lee replied:

“Whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to 'give the whole foul jamboree up and go and live in India' you would still owe us the money. Please send it to us by Friday.”

The correspondence was revealed by the Guardian, a UK newspaper.
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Above is a car-tax receipt holder available for motorists who are fed up of traffic cops snooping around their cars.

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I have been thinking about tax because of a conversation I had with a neighbor. She and her husband had just set up a sneaky scheme which would enable them to legally stop paying taxes. She recommended I do the same.

I declined.

“Why not? It’s so easy,” she said.

I replied: “But I LIKE paying tax.”

Her eyes almost popped out of her head. She thought I was joking.

I explained: “Community taxes pay for roads and hospitals and schools. I use these services and would rather pay my share than not.”

She indicated that there was “probably not another person on this planet” who shared this view.

Is this true? Readers, is there anyone else out there who likes paying tax? 

My neighbour’s position inspired me to embark on a complex research project (that is, I looked up the subject on Wikipedia). I found her stance was common.

Billionaire hotel owner Leona Helmsley said: "We don't pay taxes. Only the little people pay taxes.”

Rupert Murdoch's companies are infamous for sucking vast amounts of money out of communities and using tax loopholes to ensure they put almost nothing back.
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The following day I said to my neighbour: “For every person like you or Leona or Rupert who gets out of paying tax, some little old lady has to pay more.”

My neighbour, whose mother is a little old lady, had the grace to look guilty.  Heh heh heh.

Technorati Tags: tax evasion,tax avoidance,tax,guilt,helmsley,murdoch

Comments

[Angela]

Our government may be ruled by one-party only but I am glad that one-party also made sure my tax goes to build/upgrade community centres and hire dance instructors so every monday wednesday and friday evenings, old aunties and uncles get to groove to the beat of billy ray cyrus's achy breaky heart. The biggest and most enduring legacy of this one-party rule is the line dancing culture in our retired citizens.

My tax also paid fair wages for the police force so they are focused on their job so when I call to complain about neighbor's karaoke until late night, they would come and talk to my neighbor about it. No complain is too small, my tax made sure of that.

[farah]

i am giving up my belief on giving taxes to the govt so that they utilize for better living standards because,

1. the traffic jams are getting longer and longer each day (i'm sure i'm going to get kicked out for coming late to office EVERYDAY)

2. crime rates are going higher up

3. we're getting used to not having electricity at un-godly hours because of electric cuts

4. people higher up are more busy solving their personal problems or going places or buying stuffs for themselves rather than doing something for us

so at the beginning of the day i'm pissed, i am late (again) and i pay tax but dont know why.

[Sam]

Treat you tax dollars as if it's for the Mafia, Triad, Yakuza, ... or whatever that might apply to you. You pay those organization protection money to stop their gang (robbers, thieves, ...) from disturbing your peaceful life. The last thing you want is so worst off even burglars loss interest in you or your family.

[Julie]

Hehhe. It's funny to think of our tax dollars working overtime to promote multiculturalism all around the world.
Here in Australia, retired friends of mine (mostly born in Europe) go to Tai Chi classes.
You have to pay for line dancing yourself. It's on at the Austrian Club on Friday nights. I'm sure the beer goes well with it, but does sauerkraut?

[Denis]

I also like paying tax. Or at least I m not willing to spend vast amounts of time and energy trying to get out of paying it.
I think if you are in a country where the govt does something visible with the money, like Hong Kong, Singapore, Australia, then you can pay it and feel okay about it.
It sounds to me like Farah in Bangladesh is unhappy about her govt. Is the govt there corrupt? I hope not, but I feel sorry for you if it is.
The question really is this. If Rupert Murdoch loaned youhis lawyers and said, they can set up a system fr you to not pay tax, would you sign up for it? I'd be a little tempted but in the long run I hope I woudl have the courage to say no.
I'dmuch rather be poorer and have my dignity than be as rich as Rupert Murdoch and be anything like Rupert Murdoch in any way.

[TS]

My grandfather used to keep his tax documents in a folder marked "Mafia Protection Services".

My last tax slip from Denmark, before I left 12 years ago, had 56% as income tax.

[fardel]

This is supposed to be funny columns
Today, it is not
The only one happy to see my picture today would be our friend from SIN.
The government stripped me

[Christy]

I rarely think of something as "sin" but it would really be a sin to try to squirm your way out of paying taxes if you're a Hong Konger, when our tax rates are so low compared to European countries!

An interesting conversation about tax that I had with my Australian ex-teacher:

Me: Mr C would you consider coming back to teach in HK?
Mr C: Yes here I have to pay 40% salary tax, it really makes me miss HK
Me: (surprised) What?! That's almost half your salary gone, how do you even manage?! And you guys have sales tax too!
Mr C: Yeah well, sales tax is not as big a problem for me as salary tax -- for sales tax necessities are exempted, like bread etc
Me: And clothes?
Mr C: No not clothes.
Me: But people can't run around naked
Mr C:*whisper* Well Christy some people do. @_@

[Harry]

Evading tax is a crime. Avoiding tax is not. If one arranges one's affairs to minimize tax one is simply protecting the interests of oneself or one's shareholders. Early in the days of income tax in the UK the government went after a man for doing this. Not only was he acquitted but the judge said something like, "Every man (only men counted back then) has a duty to himself to arrange his affairs to minimize his tax." If someone is using the rules to his own advantage, without breaking them, he cannot be faulted. If you don't like it, change the rules. But don't blame someone for staying within them as they are written.
And this does not mean that I am a Leona or Rupert fan.

[Mike]

I like paying taxes. I agree with the Rousseau idea of a social contract. Taxes are just my membership dues. Each country needs to decide where the balance lies between the needs of society vs the needs of the individual.

And I thought my Political Science degree was useless.

[Harry]

Sam, re your comment about Triads, etc, a Hong Kong policeman once told me that Triads give a more reliable service than insurers. If you pay an insurer, he may give you money if something happens and you have a valid claim. If you pay a Triad it will prevent the occurence of an otherwise one-hundred percent certainty.

[Sam]

Hello Harry,

I had some bad experience with my previous insurer. When I rang up for a claim, their customer service rep gave me improper advice that misled me. Later my claim was rejected – they said my errors over here and there thus making my claim invalid (might have classified me as greedy in their computer). Unfortunately, I didn't have the phone conversation recorded to support my claim.

To me, insurance companies pay claims only as a marketing tool to lure more idiots like me to get insurance coverage. Their lawyers can quote hundreds of previous court cases to persuade a judge to rule in their favour. In disgust, I gave the business to another insurance company. Hope the current one is lesser of the evil.

Food for thought: will an insurance company owned and run by Triad be better members of the society? Hope Nury can elaborate on this stupid idea.

[Sara L]

Dear Harry, that quote about every man having the right to minimize his tax was quoted in the scmp newspaper at the weekend. People always drag it out whenever they want to use loopholes to avoid paying tax.

What nury and mike and angela and christy are saying is that maybe there is no real difference between avoiding tax and evading tax.

yes I know legally there is a difference but I am talking in terms of human values, not lawyers' values.

Human values are about real justice and fairness, while lawyer's values have almost no relation to fairness.

The average legally run multi national corporation pays something like 31 per cent tax. Murdoch uses a massive network of just-this-side of dodgy tax loopholes to escape his rightful liabilities and he pays just 6 per cent tax. Widows and orphans and ordinary people make up the 25 per cent shortfall in Murdoch's payments.

How does he defend himself? He uses the same quote that you used.

[sej]

I remember someone saying "tax is a nice problem to have".

If you have to worry about how much tax you're paying, then it means you have money.

The single biggest problem with tax, is that it is seen as a burden and inequitable, those least able to cope with it are hit the hardest with it.

Make it equal across the board, so that everyone pays the same proportion of tax, and most people will be happy.

To me, the answer seems so simple, yet very few people (read politicians) lack the courage to put it into place.

I think it comes back to my golden rule... "People are stupid".

[Karuna]

about triads and insurance.
Heard that in Mumbai there is a train ticket insurance policy, available from the local mafia. You pay a monthly fees every month to the local "brother". Then you travel the trains without ticket. If you are caught by the railway police for ticketless travel, just call the number on your policy. The "brother" will send his agent to pay the fine.

[Harry]

Sara
I know exactly what they're saying. But to expect people or corporations to act altruistically is to fool oneself. People require rules. Then, if they break the rules, charge them. If the rules are ineffective, change the rules. I try to advise clients to act in an environmentally sound manner. They won't do it if they're not required to. So, I welcome tough rules. They make my job easier. For similar reasons, we have littering, overfishing, etc. Look up "tragedy of the commons" in Wikipedia to see how human co-operation works.
Btw, I wouldn't mind paying taxes if my government did something useful with the money but I bitterly resent it when they fritter it away on rubbish like sending troops to Afghanistan, Olympic Games, etc.

[Sara]

Harry, you describe paying a fair share of tax as "acting altruistically." Stop right there. That's a mistake in itself. It's not altruism but a community duty for all of us and in the case of some people above it's a joyful duty. There is a difference.

[Ellen]

I think it all depends on which country you are from.

Nuri lives in Hong Kong and some other readers live in UK. These countries have reasonably efficient govts with lots of laws against misuse of taxes and a free press etc.

Farah lives in Bangladesh where corruption is rife. One can understand Bangladeshis not wanting to pay tax.

It's all a matter of fairness really. I don't know where Harry is from, but in the UK whenever a case like Murdoch is revealed by the press, there is mass outrage from the public at all levels. UK people have a strong sense of fair play and don't like the way Murdoch pays almost no tax.

[Ricardo Cabeza]

Sara
I just read Harry's recent post and you are mistaken. He argues that people will only pay what they are required to which, I believe, is what Murdoch and others do. By "acting altruistically" he obviously meant paying more than one is strictly required to. I think everyone posting can agree that paying practically no tax is not, if you like, "fair". So change the law. People will not act because it's fair. If they did no one would litter, wear fur or eat shark's fin, all of which are morally reprehensible, the latter two far more than dodging tax. I'd like to see those rules changed, too.
And Ellen, I don't think you really question where Harry's from. It's where he lives, ie what laws he lives under, that count. I have to haggle over construction contracts in my job and, believe me, no one is interested in "fair". The letter of the contract is all. Same with tax rules. I'm not saying it's right. I'm just saying what is.

[Wally]

Speaking of "fair", as people seem to be, what about the earlier comments about governments' spending tax money on deeply unpopular projects, like wars, Olympics, etc? Is that "fair"? Should the taxpayer resent it, or try to avoid paying it? In the 1960s Joan Baez, I believe, made a point of not paying a percentage of her tax that was equal to the armed forces' percentage of the total US budget, in protest against the Vietnam war. And I resent my government's wasting my hard-earned on the Olympics.

[Nury]

In my humble opinion, there are weaknesses with the Harry - Ricardo argument which says that what need is more tax laws to close loopholes. While i agree with should close as many loopholes as possible, I wonder if more laws is the answer?

We have thousands and thousands of pages of tax laws.

Add more, and the bad guys will spend more money hiring more evil lawyers and accountants to find more loopholes.

I'm with Ellen on this one. Adding another set of regulations probably won't make much difference.

A much better step is to change one's attitude. I like my community and am happy to pay tax and feel part of it: result: I am a happy man.

Rupert likes to avoid tax. Result: he is a rich loathed man who almost never smiles.

You pays your money and makes your choice. (Or not.)

[Chamin]

After coming to Japan, I could see that the tax I pay actually helps me and other people, so I have no complain about it. But I can understand that people get frustrated when the taxes they pay go into the pockets of corrupt officials.

I may be too demanding, but I do have a problem if my tax money is used by a government to sneak on people who have opinions that are not in line with the ruling party.

[Ricardo Cabeza]

Nury,
I like your reference to the "Harry - Ricardo" argument. Sir Harry Ricardo was a famous early twentieth century engineer. He had little to do with tax laws. Funny coincidence.
First, I don't think we differ on the objective, equitable taxation, but on the method of achieving it. You and others argue that it depends on "attitude" or being fair. I don't have that much faith in human nature. If people were fundamentally good, fair, honourable, public-spirited, etc most of the world's problems would go away. The questions of climate change, extinction, crime, poverty, discrimination,etc are quite simple. as are the solutions. All they take is good will. But most, not all, people are totally selfish and interested only in the well-being of themselves and their own small group. To rely upon attitude means that many will do what they want and will regard the few who are "fair" as "suckers" at best. Maybe you just have a more optimistic view of humanity than I do. I don't trust people to do "the right thing".
And I agree that there are too many laws. But bear in mind that governments often create "loopholes" to encourage a particular behaviour, eg save for your old age, invest, etc. The sharp operators just work out other uses for them. My experience it that most people will "do good" only when they are forced to. Without meaning to be offensive, I find expecting people to do otherwise to be utopian and unrealistic.
Saludos,

[Nury]

Ricardo, you are so reasonable and charming that it is impossible to have a fight with you!

I agree with everything you say above, except for one thing.

I think our ultimate objectives are slightly different. You'd like to see an equitable tax system for everyone. That's great.

My interests are much more selfish. I've found a way of paying tax with a smile, so I'm sticking to it. It fits my life philosophy, which I admit is a rather simplistic one: don't worry, by happy.

[Philip Osifer]

This is turning into an interesting philosophical discussion. The real question that the debate leaves us with is this one: Rupert gets a benefit from not paying tax. It is a financial one. Nury gets a benefit from paying tax. It is an intangible one, but with likely mental, metaphysical or spiritual benefits. Which is "better"?
Of course, the answer is entirely personal and subjective. But given the fact that Mr Murdoch always looks like a miserable angry prune, and Nury is the ultimate Mr Happy, the physical evidence seems to be on the side of the contented taxpayer. On the other hand, as others have pointed out above, this "happy taxpayer" option may not be available to people reading this in other countries. Bangladesh is famous for corruption, as is Indonesia. So in fact, Nury's scehem only works for people in low tax efficient countries, such as Hong Kong, Singapore, Monaco, Luxembourg and a few other places.

[Angela]

de acuerdo! @ Ricardo

We don't need more tax laws but we should implement the already existing law to punish those who evade paying tax. This is one method that will at least guarantee minimum tax evasion, if not to eliminate it altogether. To ensure that if you use public facilities, roads, schools, buses, trains, etc. then you must pay your tax. I don't think there is anyone who can say that I do not use public facilities so I should not pay tax. Do you not walk on the road that was built with public funds? etc..

Precisely because not everyone follow "it is fair" that government must enact stiff punishment for those who don't.

I am a happy tax payer who believes those who evade paying tax should be caned. Send Rupert Murdoch to Spore, we will make sure he will never again sit painlessly on a public transport without being reminded of why he should pay his tax.

hehehe..

[Karuna]

Hong Kong, none of the public transport stations have a public toilet.
During my last visit to Europe, found need to pay for using a toilet and it was such a trouble finding small change.

So, what is happening to all the tax payer's money go ? Why can not we have such basic facilities available for free.

[Heather Pedersen]

My Government gave me a grant to go to university thirty years ago. That is the basis of all the money I have and will make in my entire life. I am proud to pay my taxes because it means another person will get the same chance I did.

[Jerry]

i read the title of this and was about to recommend you to the insane asylum...you know? i still might. :D and i DO wish they'd fix some pot holes in our town....