Legal vs. Right: Is It Right to Avoid Paying Taxes When You Can?

September 27, 2013 | By: TaxCure Staff

tax evasion fair or notOne of the debates that rages around taxes is whether it’s right for some people to do their best to avoid paying taxes if they can. Just because it’s legal to avoid paying taxes in some cases doesn’t mean that it is right.

The Wealthy and Paying Taxes

We talk a lot about the wealthy paying their “fair share” of taxes. However, what is fair? It’s hard to pinpoint that answer when those who make a lot of money are legally reducing their tax bills. There have been complaints lately about how the wealthy get too many tax breaks, but if they take advantage of the ability to legally lower their tax bills, is there anything wrong with that?

Can you blame them for taking all of the advantages that they can?

Many of those in the middle class, and in those that are poorer, look on their own tax advantages as above-board and “fair,” but become upset about the wealthy who, in their turn, take advantage of the system.

As a result of this conundrum, many suggest that changing the tax code is the way to go. After all, it’s not as though those who avoid taxes are all doing so illegally. Many of them are just working within the law to reduce their tax liability. Instead of blaming them for trying to keep as much of their money as legally possible, it makes sense to work toward changing the tax laws, if you’re upset about them.

What About Illegally Evading Taxes?

Avoiding taxes legally is different than evading them illegally. While it might not make much sense to become upset at someone legally avoiding taxes as much as they can, it is more understandable when someone is outright evading taxes by illegal means.

Stashing money away in a way that prevents it from being reported is different than using a legally accepted setup to change the way your income is reported to the government. There are a number of legal ways to portion out your income, and plenty of situations that make it possible for your to reduce your tax bill, while still reporting all of your income. It’s something different when you start hiding the money away so that the government doesn’t even know it exists without a little digging.

Bottom Line

Taxation is a hot-button issue right now. Many “regular” folks see stories of people legally reducing their tax burdens and become upset. Some even feel that the wealth owe a patriotic duty to pay taxes — even if they could legally get away with paying less. However, in the end, there is a difference between what is legal and what you might think is “right.” Many of us have our own definitions of right.

Is it right to pay more than you strictly owe in taxes, just because you earn more money? Or is it right to take full advantage of the tax laws and only pay the minimum required?