Then there are untold billions in corporate profits that are disguised and therefore never taxed because of creative write-offs or because money is moved abroad to satellite companies and distant corporate cousins. These companies usually reside in tax-havens that give a nudge-nudge, wink-wink to the experts who teach big companies how to dodge taxes. In recent months, such heavyweights as Amazon, Starbucks, Apple and Google have all been nominated as first-team all-stars in this sport, but they are hardly alone.
When taxes go unpaid, whether by individuals or corporations, all of society suffers. Honest taxpayers must pick up the slack. That is unfair and irritating to fair-minded people in well-off nations but potentially crippling in poor or developing ones. When international corporations that operate in the developing world duck the taxman they wound fledgling economies that struggle to fund capital projects and social programs required to lift citizens from poverty.
Avoiding taxes through technically legal but devious methods, or evading them all together by fraud, is a significant global problem that contributes to the widening gap between the rich and the poor. Quite rightly, British Prime Minister David Cameron has made tax avoidance a top agenda item for the G-8 meeting that convenes June 17 in Northern Ireland. He will urge world leaders to close loopholes and confront cheaters as a step towards promoting tax fairness in the West and social justice in the developing world.
He faces a long and difficult battle, but it is a just one that, before it begins, has the support of the bishops of the G-8 nations. In a letter released June 3 and signed by cardinals and bishops representing every G-8 nation, Church leaders reminded the statesmen of a duty to assist the poor through fair taxation, trade and transparency.
Their statement reflected a sentiment Pope Francis has expressed consistently during the first three months of his pontificate. He has denounced the rise of “a throw-away culture” that is seduced by consumerism and the “cult of money.” It is a culture inclined to dismiss morality, disdain ethics and discard the poor.
“Money has to serve, not to rule,” the Pope has said. “To not share one’s goods with the poor is to rob them.”
Taxation that is reasonable and equitable is an important way for society to share with the poor. Individuals and corporations alike hold a moral and ethical duty to pay the taxman, and governments should use legislation and enforcement to ensure it happens.