Tax, psychology and the good life.

The recent hoo-haa over Apple and back tax which the European Commission says should be paid to the tune of £11 billion is a strange twist on what is now a very familiar theme. Rich or corporate tax avoiders can often enlist support from governments who may have very understandable reasons for seeking their business, and the Irish government’s wish to protect jobs and investment in Cork and elsewhere is a particularly striking example. But behind such cases, and the issues of inequality in general, there lies a deeper problem. Simply, tax is difficult psychologically and always has been. It’s easier to persuade people to accept paying the provider directly for a product or service than paying taxes, which even if they are being spent on services everyone agrees are important or indeed essential to their lives, nevertheless are being paid at a distance from those services. Even if the ‘private’ provider is a large corporation (or, for that matter, a state-owned enterprise) its employees are charging people directly or invoicing them on forms with the corporation logo detailing a specific sale and the charge for the product or service concerned. Governments do not invoice people directly for their tax to cover specific functions which they have carried out, so the connection remains more distant.

Here is a practical detail which needs to be addressed, but to my knowledge has not been, by philosophers who talk of the ‘good life’ as being social and communal, sometimes citing the Aristotelian tradition. The complexity of modern living and technology ensures that even small countries or communities are both more complicated and more interconnected with the outside world than would have been in earlier times, even the seafaring classical Greeks. With that comes a host of items ranging from nursery education to social care for the elderly and disabled, which the philosophical argument would certainly count as relevant for the ‘good life’, that are liable to end up either as paid for out of taxation at national or local level or else left to private operators in a competitive market. The philosophical argument will rightly point to problems, for instance of unequal or patchy provision, which can be expected if provision is left to commercial contractors, but they still need to address the psychological problem of paying for them through taxes.

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