Some moral dilemmas which confront us in the everyday course of our lives are rather common and mundane; we may not even be aware of their implications. On April 15, however, we may become aware of a dilemma which involves our honesty. The federal, state, and local revenue services force us to fill out numerous forms, answer dozens of questions, and make countless calculations. They may want to know our income and see our calculations that ascertain our income. We must reveal our expenses of advertisement, depletion, depreciation, insurance, repairs, maintenance, travel, meals, entertainment, utilities, telephone, etc., etc. Every question places us in a dilemma situation testing our honesty.
Sometimes other people unintentionally aggravate our dilemma by tempting us to be dishonest. Our income tax preparer unknowingly mixes our private travel expenses with business expenses or overlooks our foreign royalty income. He may apply a seven-year property depreciation which should be a ten-year schedule. Should I point out his errors? If he neglects to report the wages I paid to an occasional household employee, to a babysitter, maid, nurse, or yard worker, should I bring it to his attention? Or may I assume that it is all right to "fiddle the system"?
Dishonesty designed to enrich me or otherwise promote my interest is clearly wrong, but what if it might compensate me for a loss I believe to have suffered in the past or if I am convinced that the tax levy is arbitrary, destructive, and immoral? The IRS may have overcharged me in the past; the IRS auditor may have arbitrarily assessed a tax liability with interest and fine just below the amount it would have cost me to engage accountants and attorneys and to take the IRS to court. To save myself much hassle and aggravation, I did not choose to litigate but now seek to get even. Do two wrongs make a right?
I may be convinced that my tax burden is excessive and immoral. Most productive Americans lose more than one-half of their incomes to various tax collectors. At the present, the top federal rate which applies to many professional people is 39.6 percent (it was as much as 91 percent during the 1940s). If we add the state and local exactions, the total rate may exceed 50 percent. In addition to various income taxes there are payroll taxes, consumption taxes, property and wealth taxes, death duties, self-employment taxes, school and real estate taxes levied by various taxing authorities. And finally, we must not overlook numerous corporation taxes which we pay when we purchase corporate products. The price of a cup of coffee we buy in the morning embodies a dozen business taxes. It is fair to conclude that professional Americans lose more than one-half of their incomes to numerous taxing authorities many of which use their share to regulate and direct the taxpayers who support them.
The potential scope for such exactions from productive Americans is limited because the producers may withdraw from the taxpayer rolls by joining a huge growth industry: retirement in Hawaii, Arizona, or Florida. Or they may descend to the "shadow economy" which works quietly and efficiently, relying on black- market cash-and-carry transactions. Is it natural justice when I join the shadow economy? Or is it true that two wrongs don't make a right?
Most Americans seem to be numb to the ethics of the tax issue and rather cynical about tax-cutting talk by their political leaders. They are dismayed and offended by the obvious insincerity of political candidates who promise sizeable tax cuts together with new spending initiatives. Government spending, which is the true measure of government consumption of economic resources, has risen unrelentingly for half a century and taxes have risen during every presidency except the Reagan years. In 1980 Ronald Reagan campaigned for and subsequently delivered a 30-percent-across-the-board cut in income tax rates and, in 1986, managed to reduce the top rate to 28 percent, although federal spending and the national debt accelerated. At the beginning of his presidency, federal spending was estimated at $632 billion per year and the national debt at some $950 billion; when he left office, eight years later, annual federal spending exceeded one trillion dollars and the national debt stood at $2.7 trillion. In short, the federal consumption of economic resources grew significantly, but a growing share of this consumption was shifted from the shoulders of present taxpayers to those of future payers. Since then, Congress has added new taxes and raised the top rate to 39.6 percent. Recent presidents managed to create outright cynicism about any promises to cut taxes. George Bush flagrantly violated his famous "watch-my-lips," no- new-taxes pledge in 1991; and Bill Clinton broke his promise of a middle-class tax cut. When, in 1996, Bob Dole proposed a 15- percent-tax-cut as part of his Presidential campaign, few voters believed him. The present team of office holders promise tax cuts and spending boosts in the same breath.
While most politicians make promises they readily forget after an election, the agents of government may labor diligently to create an economic command order. IRS agents in particular may be guided by envy about another's desirable possessions; IRS agents with a Master's degree may resent the million-dollar income of a speculator who dropped out of college or even high school. Or they may be guided by ideologies hostile to the private property order. They may agree with the French socialist Pierre Proudhon that private property is theft and property owners are thieves, or they may concur with Karl Marx that private property in the means of production is the ill-gotten gain of the exploitation of workers. Inner-directed by such notions about private property, some agents may have joined the revenue service with the intent to change the social order.
No matter how politicians may act in their pursuit of power and largesse, we must be guided by the principles of morality. Yet, the obligation to follow principles may at times point to contrasting courses of action and leave us confused and perplexed. The normal duty to speak the truth may come into conflict with the duty to avoid harm to others. The normal duty to answer truthfully all IRS questions may conflict with the duty to take no part in evil policies. To resolve this conflict of obligations we may need to reflect on ethical theories and establish a hierarchy of duties.
I may obey the law out of fear of the consequences of my disobedience; most people are guided by this fear of prosecution and punishment without giving much thought to moral dilemmas. But these actually exist in the minds of all individuals who reflect on the morality of their actions. They may agree with Immanuel Kant's universal duty to tell the truth regardless of consequences or they may be guided by the principle that human beings ought always consider the consequences and support that which is moral.
In the spirit of Kantian deontology of what ought to be under all circumstances, I may obey the tax law without any further reflection or discussion. But if I should hold to a consequentialist view about moral decision-making, I may reflect on the consequences of my tax declaration and payment and agonize about my choices. If these prove to be unpalatable, I may search for modified versions of the two positions and hopefully find a mediatory solution. I may, for instance, embark upon legal tax avoidance such as investing my funds in tax-exempt obligations and creating and supporting charitable foundations. I may rearrange my business in such a way that it no longer produces a taxable income. I may even decide to leave the country and move to a place with fewer tax collectors. Where there is liberty there is home.
Telling the truth is a basic duty, but it cannot possibly cover every conceivable situation and outrank all other obligations, not even in tax matters. Where it comes into conflict with the duty to save human life, for instance, it must give way to the latter; the preservation of human life ranks higher on the hierarchical scale. I may deceive, betray, and fool an assassin in pursuit of his victim. But may I deceive and outwit a robber who is about to "make off with my or my neighbor's automobile? May I mislead a thief who occasionally takes my newspaper? Private property is an important factor in the preservation of life, the productivity of labor, and peaceful social cooperation. Stealing possessions is therefore an assault not only on the person but also on society. But we must guard against the temptation to elevate property to the status of an idol higher than human life itself. It is conceivable that, as with lying, stealing becomes morally defensible when the alternative is a risk to life itself. A Kosovo family may become so destitute and the police so brutal that they have no choice but to steal food in order to survive.
Stealing is not defensible morally even if it is done by majority vote. In a society of three individuals, the vote of two to plunder the third member is evil-minded and immoral. Similarly, in a society of 275 million people, the vote of the majority to pillage its affluent members is unscrupulous and immoral. Yet, political majorities all over the globe practice it, calling it "redistribution" and citing notions of "fairness," "justice," or "welfare." In politics, the prohibitory rule not to steal readily gives way to majority rule. The will of the majority as managed and manipulated by political leaders suffers no moral dilemma; might is the measure of right.
Without civic morality society is bound to suffer; without private morality we wrong ourselves with our own action and afflict and corrupt civic morality.