Status Anxiety: Morally taxed

Since the coalition came to power, a consensus seems to have sprung up on the left that tax avoidance is wrong. Not tax evasion — which everyone agrees is wrong — but avoidance. A campaigning organisation called UK Uncut has sprung up that uses social media to organise sit-ins in high street branches of Top Shop, Boots and Vodafone to protest about it.

Last week, I questioned this thinking in a review of a book on tax havens in the Mail on Sunday. I pointed out that when we buy orange juice made from concentrate, which is zero-rated for VAT, because it’s cheaper than the freshly squeezed variety, we are avoiding paying tax. Far from being wrong, this is perfectly rational and governments often increase the duty on certain goods — cigarettes and petrol, for instance — in the expectation that we will alter our behaviour accordingly.

Why is it right for ordinary citizens to avoid paying taxes but wrong for the rich? The simple answer is because there’s more money at stake.