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Rabbi I Have a Problem

Tax evasion through legal loopholes. Is it ethical?

Rabbi, I have a problem

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Question: A relative of mine whose mother has dementia was advised by a doctor to let her fade away on a saline drip rather than receive medical treatment. Does respect for parents require us to seek help to keep them alive in these circumstances — or let them go?

Rabbi Naftali Brawer

Naftali Brawer is rabbi at Borehamwood and Elstree United Synagogue.

The Mishnah (Nedarim 3:4) indicates that in certain circumstances it might be permissible to avoid paying tax by means of deception.
The Talmud (Nedarim 28a) challenges this, citing the rabbinic dictum that “the law of the land is the law”, and asks with incredulity how the Mishnah can give licence to cheat on one’s taxes?

The Talmud resolves its own challenge by explaining the Mishnah to be referring to an illegitimate tax such as where the tax collector is a fraud who lines his own pocket. Another situation in which it would be acceptable to avoid paying tax, explains the Talmud, is where the tax is purely arbitrary. This was the case with many ancient and medieval despots who levied unjustified, punitive taxes on certain segments of society — often the Jews — at whim.

However as long as the taxes are fair and legitimate, even if they are particularly heavy, Jewish law demands that they be paid (Maimonides, Laws of Theft 5:11). What emerges from this is that in a country such as ours, in which all are treated equally under the rule of law, a Jew is bound by the Torah to pay his taxes. Illegal tax avoidance violates not just secular law but religious law as well. Your advice enables your clients to minimise their tax bills within perfectly legal frameworks. As such there is no reason for you to withhold such advice or to feel guilty about giving it.

You raise the point concerning one’s ethical requirement to contribute as much as possible to the public finances in light of our current economic situation.

The underlying assumption of such an argument is that large government agencies can be trusted to spend our money wisely for our benefit. A notion that many will have difficulty with especially after the Westminster expenses scandal. It could be argued that the best place to “invest” extra money is not with big government but with local community-based charities and organisations. By all means encourage your wealthy clients to give something back to society.

But instead of handing over precious funds to faceless bureaucrats, advise them to make contributions to their local communities. It is there that the frontline battles are fought; against, poverty, crime, racism and illiteracy. And it is there that our investments — both in terms of time and money — produce the best returns.

Rabbi Jonathan Romain

Jonathan Romain is rabbi at Maidenhead (Reform) Synagogue.

Full marks to you for thinking in the right direction. With the issue of MPs’ expenses still ongoing, it is important that we do not just castigate them but also look at our behaviour and ask whether we are living up to the highest ethical standards.

Moreover, society as a whole can only survive if we put the wider social interests above our own personal gain. If we all found ways of not paying taxes — or a much diminished amount — hospitals would close, traffic lights would be turned off, and both the country and every individual would suffer.

That is what is so eternal about the command to “love your neighbour as yourself” (Leviticus 19.18), it is a double duty, starting with loving oneself and then, because we know what gives us pleasure and security, extending it to others.

Of course, even if your clients agree with that principle, they will probably feel it is ridiculous not to take advantage of legitimate tax avoidance schemes. A better strategy might be to advise them to donate the money you saved them to charity, be it a favourite cause of theirs or to organisations dedicated to helping those struggling financially, such as Debtline. Alternatively they could give to the Jewish helpline, Miyad (which covers other issues too), or the new Jewish organisation that helps people looking for a job or retraining for a career change, the Employment Resource Centre.

If your clients are employers facing tough economic decisions, encourage them to not cut costs by reducing staff, but instead to keep everyone in work by getting them to agree to a salary freeze, or even a salary reduction. A little discomfort for many is surely a better option than the pain of unemployment for a few, along with the possible knock-on effects on their mortgage and family life.

Still, it is not just a question of what you advise your clients, but how you conduct your own affairs too. You may be less wealthy than them, but are not exempt from the duty of care for others, serving fee-paying clients honestly and giving free time to assist those starting up a business or having difficulty maintaining an existing one. Society survives not on the wealthy giving, but on the mass of ordinary people playing their part too. We all have to look in the mirror and not flinch at what we see.

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