Is Avoiding Income Tax Moral?


The question of income tax is a thorny one. On one
hand everybody hates it, but on the other, no one
seriously considers challenging it. It’s like
gravity. We simply accept it as if it were a law
of nature.

Well it should be challenged, and here’s why. To
avoid income tax by whatever legal means possible
is entirely moral. And the reason lies in
understanding exactly what income tax is, and what
it is based on.

To tax a person’s income is to tax that person’s
life. For consider this: when you work you expend
time and energy. You devote forty or more hours
each week of your life to trading your life’s time
and energy for money. That money is therefore a
tradeoff for the time and energy you put in.

If the government takes 25% of that money as tax,
then it is actually taxing your life at the rate
of 25%, and saying in effect that one quarter of
your life belongs to the state. And if the
government takes 50% of your money in tax (as the
UK government has just announced as of writing),
then 50% of your life has been commandeered by the

In order to make this point as clear as possible,
consider the plight of black slaves in the early
days of America. A slave was someone who did not
own his life. His labour was expropriated by the
slave owner. Given this situation you could
consider the slave’s income tax rate to be around
80% – with the remaining 20% being taken off him
as the cost of food and board.

So if having an 80% tax rate is slavery – where
one’s whole life is bound up with a slave master –
then certainly having an income tax rate of 30% or
50% equates to exactly that same percentage of
slavery. Given a choice of being a 100% slave or a
50% slave, you may opt for the latter, but it
would hardly be moral.

To tax income is to tax one’s life. The higher the
tax rate, the higher the claim on one’s life. And
no matter what percentage of income tax is levied,
it represents a percentage of “slavery”. It’s like
the old story of boiling a frog in water slowly,
so it doesn’t realise it’s being boiled to death.
The long suffering tax payer is just like the frog
– being fleeced and enslaved by degree.

At what point does a self-respecting person stand
up and say “No!”? Should he accept a 25% rate
quietly, but get agitated when the rate creeps up
to 40%? Should the long-suffering tax payer only
complain when it reaches 50%? And if not, at what
point does anyone stand up and say “Enough is

The truth is, no matter what percentage, income
tax is a tax on one’s life. The more tax, the more
a person’s life is enslaved.

Apart from the moral argument against such tax,
there are compelling practical arguments also. As
already stated, an income tax is a levy on one’s
own effort. And as such it acts as a disincentive
to work. Just ask yourself the question – at what
rate of tax do you start losing the will to work?
And if the tax rates were lowered considerably,
wouldn’t you work harder, knowing you were keeping
more of your own money?

This fact is well known of course, and high taxing
countries are forever suffering a “brain drain” as
the entrepreneurial class pack up their bags and
head overseas to countries where their life and
money is more their own.

It’s not by sheer luck or coincidence that the
Chinese work hard. It’s because countries such as
Singapore, Hong Kong and China itself have very
low income tax rates in comparison with other
developed western countries.

As a resident of Singapore, for example, you are
taxed at a rate of between zero and 20%, with 20%
being the maximum. If you lived in Hong Kong you
would be taxed a maximum of 15%. That’s a big

It doesn’t take much thinking to realise that a
worker in either of these two countries is going
to be a whole lot better off than a high income
earner under the new United Kingdom tax regime –
where the top rate is now 50%.

Income tax is both immoral and impractical, and
when it gets out of control, it destroys the very
basis of any thriving economy. It also creates
demand for creative accounting services, to
mitigate such high taxes, and the demand for tax
havens and offshore bank accounts – where a
productive and hard-working person may seek some
respite from the clutches of the tax man.

So what’s the alternative?

There are a number of systems that could be put in
place to fund the activities of government – all
of which would be better than an income tax. And
here’s a few ideas just for starters.

Income tax could be replaced with sales tax. That
would have the effect of eliminating the
departments of inland revenue, abolishing the need
for tax returns, and leave every dollar of income
in a person’s hands – letting them decide what to
spend it on.

It could be replaced with a resident’s levy – like
a fee for services. This levy would be the same
for everybody, and would be paid say once a year –
or even in installments. The critical thing here
is that such a levy would be like any expense and
become part of a person’s normal expenditure. And
the great benefit of doing it this way would be
that, unlike the income tax, which is taken out at
source, the paying of such money would be noticed
by everyone. And if the government were to get too
greedy and increase the levy too much, then people
would notice it and rise up to change the

Any system for raising government revenue would be
preferable to the income tax. Without it, people
would get to keep what they earn. A massive
bureaucracy could be dismantled. And a much more
effective brake would be applied to spendthrift
governments everywhere.

Yours in freedom

David MacGregor