A sign that I probably lived in Switzerland too long — a country where even tax evasion isn’t a crime — is that I’m mildly amused by the flap surrounding Gov. Jared Polis not having paid income tax in many years. Why the shock or anger if someone, in full compliance with the law, avoids paying taxes? Or rather, why direct the shock and anger toward an individual instead of the tax system?
The Denver Post in particular was up in arms over Polis’ tax avoidance, calling it “aggressive” and “unethical.”
“The Moral Maze” is a BBC Radio 4 podcast I enjoy, where panelists and “experts” tackle moral questions of the day, and this debate over whether taxes are a moral or legal obligation, was recently featured.
Some felt it was immoral to avoid tax, similar to the Post’s point of view. But ultimately paying tax is simply part of the social contract between citizens and government. If we want the wealthy to pay more tax, we need to reform the tax code. No one is going to pay more tax than required just because it may be the moral thing to do.
One avoidance tool specifically mentioned were family foundations, which, again, made me chuckle as these have long been used in Switzerland to avoid tax. But these things are often more complex than they may first appear.
Family foundations, if well run and values oriented, are enormously effective philanthropic tools, funding the kinds of projects that governments either don’t have the resources to, or are not allowed to do.
For example, in Switzerland, I worked for a nonprofit that monitored German-language media and government bodies for potential anti-Israel bias. Our work helped change the way the Swiss Foreign Ministry funds UNRWA (the UN Relief and Works Agency, which has also embedded and financed the concept of permanent refugee status for Palestinians and incited anti-Israel hate in its schools). The nonprofit would not have existed without the family foundation that funded it.
Then there are the people who don’t even believe federal tax is constitutional, the most famous being Irwin Schiff who died in prison rather than pay federal tax.
I’m not a tax expert, and I have no idea whether Polis’ net fiscal contribution to society through his foundations is equal to what his income tax would be without using loopholes.
I do know this: It’s extremely unlikely I’ll ever find myself in a situation where I’ll need to find out.
Shana Goldberg may be reached at [email protected]
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