The Morality of Taxes

Tax day looms, and no one is ever happy about that. Many think taxes are too high, a few people think they're too low, everybody objects to the complexity of the forms and the special-interest favors of tax codes. But should taxes be seen as an ethical question as well? The Founders wouldn't accept taxation without representation; Thoreau refused to pay taxes to protest the Mexican war, as later Americans did during Vietnam; today a few fringe survivalist groups resist paying taxes.

Since he first floated his idea for a tax cut on the campaign circuit, one of George W. Bush's favorite lines was "It's your money, not Washington's,"

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implying that taxes are theft on the part of government. Last year, former Rep. John Kasich of Ohio, then chairman of the House Budget Committee, added the latest interpretation, declaring that taxes are "a moral issue." This is so, Kasich said, because "every time we cut taxes, we make government less important and people across the country more important."

There's no doubt that taxation takes away people's money and no doubt that tax cuts reduce that effect. Less clear, however, is where the morality of taxation lies. No taxes would be nice. Yet every society since well before the Roman Empire has collected them, and every philosophy of government, including libertarian theory, acknowledges some degree of taxation to be unavoidable--even in a minimalist state, government would need to defend the shores, enforce contracts, and keep the peace. The Founding Fathers obviously expected Americans to be taxed, or they wouldn't have included, in the Constitution, a set of rules governing how the House of Representatives can vote out tax bills.

So the issue really isn't whether taxation itself is moral. The issue is whether strict tax compliance is the ethical obligation of an honest person or corporation. In other words, if you fudge your 1040 form, is that playing the system, or is it cheating?

If tax cheating interests you, now seems the ideal time. After the IRS was discredited by disclosures of excesses in the 1980s and 1990s, the pendulum swung in the other direction, with IRS staff cuts and congressional instructions to reduce audits. Two decades ago, one personal tax return in 63 was audited; in 1999 it was down to one in 300, and only one in 131 for taxpayers declaring more than $100,000 in income, who have the most to gain by cheating.

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