Tax evasion is not OK | The Jackal

15 Mar 2013

Tax evasion is not OK

Today, the NZ Herald reported:

Recent research also confirms that the legal system treats beneficiaries more harshly than tax evaders.

In a pilot study comparing three years of tax evasion and welfare fraud, Victoria University lecturer Dr Lisa Marriott found welfare fraud was significantly more likely than tax crime to be prosecuted, even though the sums involved in tax offences were far larger. In 2010, it was calculated that tax evaders cheated New Zealand of up to $6 billion.

Benefit fraud involved an average of $70,000 and the offender had a 60 per cent chance of being jailed. Tax evaders, with an average fraud of $270,000, had only a 22 per cent chance of being imprisoned.

That's a huge difference that clearly shows our current political and judicial system is biased.

On February 20 this year, Associate Social Development Minister Chester Borrows announced new measures - not to crack down on the $2.6 billion owing in child support or the money lost through tax evasion, but to "prevent, detect and catch welfare fraud".

Chester Borrows is obviously playing to his constituency of beneficiary bashing tax evaders.

So it is not surprising that a UMR Research survey released last month found New Zealanders believed beneficiaries had now become the most discriminated-against group in the country.

Unfortunately having somebody to blame is a common human trait, and with the media and politicians invariably putting welfare instead of tax evasion at the top of their list, beneficiaries will continue to be unfairly persecuted.

That unfair discrimination has a detrimental effect on all people who are welfare dependent, which in turn costs the country in ways that most politicians don't often consider. Our high rate of youth suicide for instance can often be directly attributed to discrimination.

One way to help people out of poverty would be to ensure that tax evaders were pursued more vigorously, and that tax evasion became less acceptable within "polite" society.

In order to do that, we need to change the public focus away from beneficiary bashing and onto tax evasion, which is easier said than done when there's no political impetus to catch let alone prosecute more tax evaders.

Maybe that’s because many politicians also avoid paying their fair share of taxes as well.