The morality and tax avoidance: A sentiment and position taking analysis

Abstract

This paper examines the moral and legal underpinnings of corporate tax avoidance. Cast in terms of a totemic symbol that brand tax avoidance as within the purview of the law, the paper invokes the attributional frames of the new sociology of morality to examine the position of both the moral advocates and the amoral critics of aggressive tax avoidance. The paper uses the United Kingdom as a jurisdiction where complex tax planning by tax advisors serves as a measure of protection for corporations who may have already conceived that they are paying too much tax. Data for the paper came from semi-structured interviews conducted with tax accountants, consultants, parliamentarians, and government officials. To supplement the interviews, data from the Parliamentary Commission on Banking Standards were collected and analyzed to provide useful insights. The findings reveal that through effective tax planning, companies can reduce the present values of future tax payments. Given the singular justification of their actions within the contours of the tax rules, the moral culpability of organized tax avoidance is minimized, with very little liability attached. Tax avoidance is a morally charged area that is slowly drifting away from conventional social norms of what is right or wrong. It is hard not to see those in charge of tax regulation not using the findings of this paper to provide a more nuanced understanding of the intractable problems associated with corporate tax avoidance and use it as a reference point for regulatory reforms.