‘If you prick us, do we not bleed?’ Well, not if we are a company. This was the point on which I was reduced to a state of heckling at the Lisbon conference described in my previous post. A Breakout ‘Conversation’ – Breakout ‘Sessions’ are SO last decade –  on ‘Tax and Morality’ was irresistible. (Look, when you are choosing between ‘Documentation requirements under BEPS’ and ‘Tax and Morality’,  irresistible is a relative concept.)

That the first question was simply whether tax and morality went together like a horse and  carriage (not precisely those words, but definitely the idea) was unacceptable. Corporate Tax and Personal Tax, as conceded by the moderator in dealing with my outburst, needed to be treated separately, even if the ultimate conclusion might be ‘yes’. Companies are Children of a Lesser God (their shareholders), and it is nigh impossible to pin anything high and mighty on them.

To me, all this populist corporate morality  posturing over the last few years, embarrassingly sparked off by a British Parliamentary Committee chaired by the alleged beneficiary of a Liechtenstein trust, has been one long yawn of poppycock. The most convincing argument regarding Corporate Morality came from a British colleague and old friend, who managed to dredge up the Parliamentary Proceedings leading to the enactment of certain joint-stock companies in the 17th century, that included some kind of public purpose. (I have been unable to confirm this in independent research, but he is a good bloke, so he probably knows what he is talking about.)

On returning home, thanks to an obituary in The Economist, the issue of Morality and Personal Tax was placed into focus. Irwin Schiff, who died in a Federal Prison last month, was a self-styled libertarian who refused to pay Federal Tax in the United States and, often with time on his hands in various open facilities financed by the idiots who did pay their taxes, wrote several books on the subject.

What was remarkable, and so typical of the different approaches of Europeans and Americans to tax, was that his lifelong struggle had nothing whatsoever to do with morality. In America, to this very day, morality is to taxation what a bicycle is to a fish. You pay taxes because the law forces you to. If the law is an ass and doesn’t close a loophole that allows you not to pay tax, you are an ass if you pay. C’est tout.

The late (literally, and with his tax filings) Mr Schiff attacked the income tax on the basis of it being unconstitutional. Now, I admit to not understanding this (and, neither, it appears did various US judges over the years who sent him to cool off in correctional facilities). The income tax was never popular. It was instituted during the Civil War when, to get at citizens clearing off from the land of the free and the home of the brave, it wasn’t escaped by leaving the US – a price still being paid by US Citizens overseas , and currently copied only by that other regional superpower, Eritrea. It was removed in the 1870s and only made it big-time when Congress passed the 16th Amendment to the Constitution in 1913 (the wrangle in recent years over Obamacare revolved around whether the required federal payments by individuals fell within the Amendment).

I personally do believe (as discussed in a number of earlier posts) that there is a moral responsibility on individuals to pay personal tax. However, there is something simple and attractive about the American approach. We Europeans could not begin to understand Mr Schiff. He lived (when not incarcerated) in Nevada, who few would dub the moral capital of the world. He dressed like a second-hand car salesman and represented himself in court (presumably because no self-respecting lawyer thought he had a case – his arguments  drew heavily on ridiculous sophistry).

Schiff made a fortune with such Pythonesque titles as ‘The Biggest Con: How the Government is Fleecing You’ and ‘How Anyone Can Stop Paying Income Taxes’, but the bit I find hardest to comprehend could best be summed up in that wonderful exchange between the legendary Jack Benny and a thug: “Your money or your life?….Look bud, I said ‘Your money of your life’.” …”I’m thinking, I’m thinking!” Forget morality, it seems even freedom has a price in the land of the free.