Human Rights, Tax Evasion, and Our Moral Imperatives

October 18th, 2013

Tom Cardamone, Managing Director of Global Financial Integrity, recently published a piece in Reuters on the connections between human rights and tax evasion. He references a recent report Tax Abuses, Poverty, and Human Rights, published by the International Bar Association’s Human Rights Institute (IBAHRI) Task Force on Illicit Financial Flows, Poverty, and Human Rights. The report finds that the evasion of taxes “has considerable negative impacts on the enjoyment of human rights.”

The IBAHRI report goes beyond this connection, however. Developed nations, they write, have an “obligation to assess and address the domestic and international impacts of corporate, fiscal and tax policies on human rights.” These ideas are worth fleshing out.

Much of the IBAHRI report reflects the philosophies of Thomas Pogge, a member of IBAHRI and a chair of Tax Force on Illicit Financial Flows, Poverty, and Human Rights. Pogge’s philosophies are grounded in the philosophical principal on the two types of moral imperatives: negative duty and positive duty.  Negative duty is the moral obligation not to cause harm (that is, non-interference), whereas positive duty is the moral responsibility to prevent harm (that is, assistance).  For example, you have a negative duty not to push another person in front of a speeding train.  You might also have a positive duty to pull an injured man out from in front of a speeding train.

Pogge believes we have a negative duty to not make worldwide poverty worse, but he also believes this minimal moral obligation is not being fulfilled.  Pogge argues rich countries are actively harming “many in the poor countries through the global economic order they impose.”

This idea falls out from the IBAHRI report. As Pogge points out in an interview about the report:

The fact that sophisticated tax planning strategies are technically legal is no longer a justification for their use. The impact of tax abuses, facilitated by secrecy jurisdictions, on global poverty is tremendous. The international community has not only a legal obligation but also a moral duty to ensure that states use the maximum resources available to fulfill the civil, political, economic and social rights of citizens.

Pogge also believes that we have a moral duty to be just in an unjust world. In this context, Pogge argues we cannot merely accept the terms of the world’s international financial system as given. On this idea, the IBAHI paper notes that “merely complying with tax law is not enough when this results in the violation of human rights.” Tom Cardamone expounds, noting that “business as usual” should no longer be tolerated and, in the near future, we may achieve a “new normal” in which “callous disregard for the implications of tax abuse will no longer be perceived as the benign activity of the wealthy or powerful.”

From a policy perspective, it is important for the world understand the direct links between human rights and tax evasion. However, this connection is even more important to our culture and dialogue.

As Cardamone hints, under the status quo, tax evasion is considered “benign.”  This may even be putting it lightly. Think to the 2012 campaign when Americans discovered Romney was avoiding taxes using loopholes and secrecy jurisdictions. Many people were outraged. But others, including the Romney campaign, argued Romney was doing no more than a savvy businessman would do. “Why pay more for a cup of coffee—or a tax bill—if you don’t have to?” they argued.

The answer is that getting a discount on a cup of coffee is not a human rights violation. In that case, from a moral perspective, we do not have a negative duty to pay the higher price. But, as the IBAHRI report can now resolutely tell us, evading taxes is a human rights violation. And so we do have a negative duty not to tolerate it. In order for the status quo to change, our attitude toward these implications also must shift. Luckily, the IBAHRI report is a great place to start.

Written by Ann Hollingshead

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