Wednesday, 15 January 2014

Tax Avoidance is not the Same as Tax Evasion


Many governments all over the world seem intent on blurring the lines between tax avoidance and tax evasion. Lawmakers are gumming it up to the abuse of benefits and exemptions by many people. Sure it is quite unfair that celebrities could hire professional accountants that help them reduce the amount of taxes they pay, but it is really because they could manage the finances effectively that they could reduce their taxes.


With the lack of knowledge of tax avoidance, a blue-collar worker pays 10% of his or her salary to the government. A celebrity with professional accountants could reduce that amount to 3% at best by tax returns, exemptions and benefits.

We’ve heard of people marrying for convenience because bearing children could effectively reduce the taxes couples pay. Add to that the combination of declaring the lower-rate taxpaying partner being the primary breadwinner, then their taxes are effectively reduced as well.

Declaring that tax avoidance is the same as tax evasion is declaring that knowledge is something damnable. I think that a better solution to the problem would be the reduction of the beneficiary taxes based on income, not declaring those who understand the law to be abusing the system.