Tax evasion is considered a serious criminal offense in many parts of the world. There are laws that are put in place to ensure that people comply and pay taxes promptly as required. Those who are found to have contravened these provisions of law on tax face severe penalties which in most cases include heavy fines and many years imprisonment. In most cases however, it is always difficult to identify and arrest those who engaged in tax evasion due to corrupt systems that are in place. Both citizens and employees who are expected to ensure tax compliance more than often engage in corrupt practices and dealings. This therefore leads to many organizations; institutions as well as individuals avoid paying tax hence denying the government the much needed revenue.
Many institutions and individuals sometimes find themselves in a dilemma on whether to choose to pay the full tax required of them or avoid paying tax and instead choose to bribe the tax collector. For example in our case, being the Manager in a Dominican campus I am torn in between going the Roman way of paying taxes which involves bribing the tax collector to enable me lie about my income. If I chose to do this, I will save the university a large amount of money. On the other hand however, I am expected to comply with the American way of paying the full amount of tax required of me which definitely means that the university wouldn’t save any money. This case can be described as an ethical or moral dilemma, it entails choosing between what is considered morally right and in line with the set principles of morality. Ethics is an important tool with a set of principles and values that are helpful in making decisions when confronted by various difficult situations that require decisions to be made (Dunbar 15). It is a very important tool since making decisions is a daily requirement in various organizations, governments as well as by individuals. This decisions that are made can either improve the quality of life if they are right and can also ruin our lives if we make wrong decisions.
There are a number of ethical theories that have been put forth by philosophers that can best explain my scenario above, for our case I will choose the teleological ethics theory. The theory proposes ways through which an action can be described as either right or wrong. It draws conclusion on to whether an act or action is good or bad by observing its end results or consequences that an action bring about. Theoretically, actions that improve the general wellbeing of individuals are said to be good while actions that bring negative impacts are said to be bad. This theory therefore guides us on what we should do or not based on the consequences our actions are set to bring. Under teleological theory, I will focus my attention on the utilitarianism.
Utilitarianism in ethics describes an action as good if it only brings about maximum benefit to many people and is at times referred to as social hedonism (Tim 110). The origin of this theory dates back to late 18th to early 19th century. It is a theory that was developed by Jeremy Bentham and John Stuart Mill. Bentham was an English philosopher while Mill was an economist. The utilitarian theory is mostly used in making ethical resolutions that its end results affect many people. In analyzing an action or conduct using utilitarian theory, we need to choose from the available options the action that will result in maximum benefits to many people and produce the least damage or harm (Stuart 11). Such an action according to utilitarianism is referred to as an ethical action. This theory helps us to make the best decision knowing that whatever action we undertake will ultimately result in either good or bad consequences. This theory therefore acts as a guide to choosing an action that will produce best results and does no or least harm to either individual, the community, an institution/organization or the government.
The utilitarian theory is therefore applicable to our hypothetical issue above concerning tax payment in America and Rome by the Dominican campus manager. The manager should consider a number of factors before settling on a decision of whether to pay the full tax or not. On one hand, choosing to lie about his/her income and bribing the tax collector so as to pay less or no tax will benefit him and the university alone. This act is however unethical according to the utilitarian theory because it will benefit a few people and cause a big lose or harm to many people who in this case is the state or the government (Robert 201). Money or revenue collected from tax remittances are always used to carry out activities that are always beneficial to many people.
Some of the activities which the tax money does to a state is providing quality healthcare services to its citizens, provision of safe drinking water and sanitation, improved infrastructure e.g. good road networks and communication as well as paying salaries to its staff. If many individuals, institutions or organizations engage itself in such unethical acts of avoiding to pay tax, it will eventually lead to severe interference with the normal running of the above highlighted services and activities hence causing a lot of suffering to many people or citizens of the state in question. For our example above, the act of the campus manager avoiding to pay the full required tax will deny the Italian government the money it needs to offer various services to its citizens. It will be therefore important that the Dominican campus manager consider it ethically and morally right based on utilitarian theory to pay full amount of tax the American way and ignore the Roman way of bribing the tax collector because it is a wrong action to do and will not bring greatest benefit to many but instead, will only benefit the university and the tax collector only.
Broad, Charlie Dunbar. Five types of ethical theory. Vol. 2. Routledge, 2014.
Mill, John Stuart. Utilitarianism. 2015.
Mulgan, Tim. Understanding utilitarianism. Routledge, 2014.
McGee, Robert W. "Christian views on the ethics of tax evasion." The Ethics of Tax Evasion. Springer New York, 2012. 201-210.