Evasion and Corruption, a Symbiotic Relationship

Disclaimer: It's important I let you know that this post is of an economical nature (or socio-economical nature) where I'll go on explaining in a very rudimentally way how the market functions, what's the role of the State and what's the role of taxes. It also goes political and heavily biased (as everything I post here because this is my blog, these are my ideas and opinions, and if you don't like it, fuck it), so if you are not an economist, or interested in economics, OR you are but you are of a more liberal tendency, and strong about it, you may want to skip this one and wait for my next fluffy post - which should be out soon, if I keep my current tempo. I promise lighter stuff for the next one, so if you don't feel like reading a lot about why I think tax evasion is evil - after a lenghty exposition about economics and why taxes are good - then turn around right now.

Last Warning!

The topic of tax evasion is one that we find around quite often. In the case of some because they evade taxes, and in the case of others, because they know or hear about people evading taxes or planning to. This doesn't mean that they are all surrounded by groups of libertarians who proudly evade taxes and consume only tax-evading products. Tax evasion, as it happens, isn't only something big companies do, or organized crime groups, but something a lot of people do, regular people like you me, and even uncle Pete. But just because "everybody does it" it's okay if we do it too? Well, let's explain some about taxes.

Taxes: What Are They?

The way societies are organized nowadays - economically speaking - there's a private component: you me, the companies... who interact to sell each other things. We - individuals - interact with companies to sell them our work force, for wich we are paid a price known as "wage" or "salary". That workforce is then used to make - along with other inputs - into goods and services we may or may not buy or use, paying for them a price, know as "price" or "fee", "fare" or any other name we may call it. We all interact in a the market. In it every transaction depends on two factors: money and need. If you have money you can access to the things you need, as long as you have enough to pay for them. However, if you really need something and the person or company who has it knows that you need that thing, it can push the price higher and higher, asking even more than what if costs to make it, simply because you really need it and have to pay for it in order to have it.

If you would let the companies act this way - since they produce all you need to live, and they are the ones who can decide to hire you and pay you whatever they want - things could come to a point where lots and lots of people would work a lot, earn too little and still don't have enough to cover their needs, while a few would profit from it, having more than what they need, both in products and services, but also in money.

Some say that this situation isn't sustainable as if most of people don't have enough to live, they won' be able to buy up the things the companies produce, and thus the companies would bankrupt. That's not true. Actually, hunger and need will keep pushing people to continue working (or start stealing, killing and getting involved in criminal organizations), while the companies hiring all that people would adapt to what the paying segment needs. This way, for instance, the food the poor people who work can't afford, would become biofuel for the cars and planes of the people who can afford it. Sure, people will start dropping dead of famine, but currently the planet is packed with people, and by some insane reason, the poorer segments are the ones having more and more children, so that would be perfectly okay for the economy.

A rebelion of the proletars? Yeah... not in these time, when we've been all subdued to laziness.

Now, in order to prevent this situation and keep a sense of balance, there's in the market a third party that makes an effort (or should make an effort) to keep the score balanced. That's the State. As it's job - economically speaking - , the State should make sure nobody is taking advantage of nobody. No company is too big to call the shots, no wage is so small people can't afford a decent living from it, no work schedules too long and so on. In order to do that, the State makes Laws and other rules, and to enforce them on society (because nobody is going to behave well because Simon says), the State needs money. Money to pay people to keep an eye on everybody making sure everybody is acting acording to the law, and if someone isn't, that person or company can be punished. For this you have to pay a Judge, prosecutors, a courthouse, maybe a jail with a set of guards, and then some people to asses the assets of the person or company if found guilty and so on.

Also, since the State can't (or won't) force companies to give services and products away for free to those who can't pay for them, it needs money to pay for these, or make them and give them to the people. These things are stuff like public education, roads, public healthcare (for those who have such a thing - I do), public parks, unemployment checks, food stamps, care for those who need it, shelters, orphanages... you name it. Things that basically a company wouldn't produce because the people for whom it would be can't pay for it, so it wouldn't yield a profit, only losses. To do this, the State need money, and how does the State gets money? It actually have three ways: 1. prints it - which if it does a lot makes the money lose its value, so it ain't a very clever solution (the correct term for making money isn't printing, it's "minting", but printing gives you a better idea of what I'm telling you ^_^), 2. makes companies and sales services, which some States did, but then were called "too communists" and "too inefficient" and all those State services were given to private hands who do things just as crappy, but for much more money and hardly give back to society - except for show (and except those companyies that actually are non-profit), and 3. through taxes.

So taxes have a purpose, and if you are not some selfish bastard that thinks everything in this planet is put there to suit your needs, then you see that the fact that you pay taxes means you are a very fortunate, lucky person, and you should be happy because that money you give to the State helps us all, and helps those you don't know and need it more than you. Aaaand yes, there's corruption, which takes that money (not all, but a part) and instead of putting a book in the hands of an underpriviledge kid, it stuffes it in the pocket of someone who would use it to give more money to someone who already has a lot, or buy themselves a nice car, or pay expensive trips and live a life of glamour.

Evasion and Corruption, Justify One Another?

So we've seen that taxes are needed in order to keep the State going and the State is needed to make our societies a livable place for all of us - and not all of us the starving slaves of a few ones. Though yes, the State could get money by selling services and goods, this has the downside that part of the income from the sales must cover the costs and only a part of it can be used to the things the State needs them. The other downside is that the current predominant social ideology prefers all that profit to fall on private hands (specially because most of the services that the State used to operate are very profitable, such as telecommunications, health, education and the production of several goods). So, since printing money is a very bad idea in the medium and long term, taxes are the income source of excellence, specially because the biggest chunck of the income goes straight to the State.

However it happens that some people and some companies don't like to pay taxes. This is basically money they've made and they want it all for themselves, or they say that they don't want to give it to the State so that the State - being a corrupted entity - can steal it and divert it to it's own profit. So they better keep that money for themselves.

If you look at it, most of the people who evade, say the same thing: "they don't pay taxes because it upsets them how that money goes to line the pockets of the corrupt". But, does this justify comitting a crime that has as victim not the corrupt pigs lining their pockets, but the whole of society, starving for State funded services and products? The way I see it - and as it has been obviously put this far - no.

The thing is that the corrupt will always steal, no matter the amount of the money collected from the tax payers. Also, as a matter of fact, this corruption allows in a way, the evasion to happen. How? Well, those deviating money are busy deviating a portion of the incoming flow, which leaves less money to the tasks that should be funded - among them a decent and working staff of tax collectors empowered enough to catch the evaders and get the money out of them. Assembling and keeping a well working system of tax collectors demands a lot of resources, and those resources are rather invested in personal profit - in the hands of the corrupt. So you evade, corruption adapts to keep getting its cut, you evade more, they adapt more and the ones suffering are those who would make use of the goods and services the State can't fund anymore. This could eventually lead us to that scenary where there's no State because it has no more money to function and the whole society is at the mercy of those who hog the money - who are not the evaders, but the corrupt (who can also be evaders!).

If the evader is also corrupt by the sheer evasion is another topic (and I do believe it is, but in this post we refer to the corrupt as the one diverting the funds from their destiny and profiting from it.. which is also what the tax evader does, but on the other end of the scope).

Evasion and the Stupidity of It

One thing that amazes me the most, is how a lot of people who evade taxes claims to do it for a reason (as I stated it previously), so this way they try to actually legitimate their crime by infusing in it a pseudo-ethical spine. Question: Are they stealing from the corrupt to give it to the poor? Is that tax money going directly to help the poor, the sick, those in need? Any good evader would say: "yes, that's me". Thing is that they don't. They could mask it, as if they were helping someone who needs it, but they don't.  Many down right hate systems based on solidarity, where those who have more share their fortune with those who have less. Their thought normally is "why should I help them if they are not my kin?" Well, in a way they are. The society in which you live has given you education, healthcare, roads... teachers taught you for your own personal growth, and nurses and doctors cared to make you feel better. Yes, maybe all those were paid for you, but does that mean that you have right to them because you can pay them, but those who don't have that money should not benefit from it? Stay ignorant and thus never get a chance to improve their lives? Or stay sick and die?

If the family is the base of the society, shouldn't then society behave like a family where we all care for each other? In the mind of the evader, no. You are out of the womb and that's no man's land, and everybody for him or herself. Well, that's certainly not the kind of world I'd like to live in, but in a world more caring and human, we all have to chip in, even to help those we don't know and may never meet. But evader don't see it that way.

Those who evade taxes, will probably do other things, cut corners and look for ways to get things withour paying for them, or paying the full price. Yes, there's a word for that, and that word is "stealing". And it's only natural: if they steal from someone as big and powerful as the State (that could send them on a whim to prison and take away their assets), why wouldn't they do it with someone less powerful? Steal cable signal, steal internet signal, steal phone service, energy, water, pay less on public transportation fares, less at the restaurant, the video rental... anything and everything is fair play as long as the can "outsmart" it, or in other words CHEAT.

So where's the moral fibre, the ethical stand according to which they evade taxes because the State steals that money? They don't want someone else to steal what they can steal? It upsets them that some corrupt asshole is stealing more than what they do?

If your problem is corruption, denounce it, demand the State to do something about it, but you can't fight crime with other types of crime, because that only fuels the circle. Yes, corruption shall be fought and eliminated, but what are we achieving with evasion towards that end? Cutting the fund to find a cure isn't the way. Nor is remain passive. Push for accountability, vote, get involved, do your best, refuse to join the long list of corrupts, and have a moral stand to demand transparency and honesty. Do your part as it should be done, and demand the State and everybody else to do the same. Teach that to the future generations, not only by words, but also by example.

Diclaimer: non of the pictures used for this post belong to me. They were taken from the Internet. If any of these belong to you and you want it back, let me know and I'll take it off.