Taxing Citizens: Hegel On Having the Right Attitude.

P1000443We hear a lot about tax, and about how people dislike paying it. But while there’s general agreement that there is a big difference between tax evasion (illegal:  breaching the law to escape paying tax) and tax avoidance (minimising one’s tax liabilities in a legal way), there seems to be a lot of confusion about what one’s duties are in relation to tax. Is it enough to not break the law? Here I am going to argue that it isn’t. I expect this will chime with a lot of people’s intuitions, and I want to support and justify these. I want to go a bit further than that, however: it’s my contention that we have to have the right attitude to tax, and that failure to have that right attitude on the part of a lot of people is a sign that something is badly amiss with the society we live in. So tax avoidance should be viewed not only as wrong, but as a symptom of a social pathology. This goes beyond issues of tax law and even those of morality: it concerns our very nature as social creatures, and what it means to be free. To make that argument I am going to call on the ideas of a German philosopher: G.W.F. Hegel.

Before we get to that, I’d like to quickly review some of the things people say about tax that are clearly wrong. The first is the idea that your income is simply and uncomplicatedly yours before the taxman comes along and takes it. On this view, tax is a kind of evil, necessary, maybe, up to a point, but a kind of intrusion into one’s property. This isn’t true, and it isn’t so whether we are thinking of salaries, profits or bonuses. You do not own all your income before it’s taxed. This is because ownership itself has no meaning unless it can be enforced, and for that you need police, courts, lawyers, and all the other things the state provides. These all come at a cost, and that cost is paid by tax. Ownership is a legal right and laws imply government and thus taxation. The existence of contracts, pay, property itself (not to mention roads, schools, police etc.) presuppose the existence of taxation. So ownership and tax are inseparable. This is still true for those libertarians who want a minimal state, paying only for the police and the very basic functions of security that one might need. In any case, most of us want more than this: we want schools, libraries, pensions and so on, the fabric of a modern society. And this is before we get to thinking about tax as a form of wealth redistribution. Tax is part of property, not the antithesis of it. The exact level of the tax you pay is the one set by society; but the principle is clear: property and tax are inseparable. Will one and you will the other.

There is another fallacious argument in support of tax avoidance. We sometimes hear people arguing that it is hypocritical to complain about ‘off shore’ tax havens, or other legal dodges like redefining one’s employees as self employed (to avoid paying national insurance) since most people will do analogous things if they can. Isn’t investing in a tax free ISA or similar the same thing? or buying something duty-free? Major tax evaders and avoiders make much of this, but they are being quite disingenuous here. Tax avoidance is bending the rules in order to avoid tax parliament intended you to pay. An ISA, in contrast , has been set up with the express intention of encouraging people to save. You aren’t going against the spirit of the thing if you put your money there; you are if you invent a clever instrument for avoiding the tax parliament expected you to pay.

We get quite a number of stories in the media about how little tax some people pay, and how far large corporations will go to avoid paying it at all.  The typical line of any CEO who finds him or herself having to answer questions about the various tax avoidance dodges a company has embarked on is to respond that yes, they’ve done all they can to limit tax liability and that no, they haven’t breached the tax laws of the country.  We sometimes then get the semi rhetorical question: are you saying that legal tax avoidance is a moral issue?  The answer is clearly supposed to be in the negative. The assumption, apparently, is that it is just fine to avoid tax unless one has actually broken any laws, and that there is an unjustifiable moralism around the issue. The company seeks to maximise returns for the shareholder and the state, if it doesn’t like it, must change the tax laws. I think that a lot of people have the uneasy feeling that there is something wrong with line of thought, yet can’t quite put their finger on what it is. If the law hasn’t been broken, what can one say?

One could say this: there is something immoral about the approach. But what, exactly, would that be? The problem with the ‘moral’ approach is, it seems to me, that it is too easily countered by the accountant or CEO that law and morality are quite different things, and that the latter is subjective (your moral view isn’t his). That’s a facile argument, and it can be countered by making the point that if anything has to be shared, i.e. not subjective, it is morality. You could back that up by arguing that one has moral duties, and that those duties demand, minimally, that one should be consistent in applying the rules one lives by: lying can’t be OK for you and not for me; you should treat others in ways which reflect their rights and dignity and persons. A popular version of this is the golden rule: ‘do unto others as you would have them do unto you’. Alternatively, one might go for a broadly consequences based approach: the effects of widespread tax avoidance are bad for society as a whole. The problem is that if the CEO can show he hasn’t got his fingers in the till, hasn’t actually lied and has kept strictly within the law both arguments may fall flat.

The CEO may be the perfect example of the man or woman  of integrity, a person whose word is their bond, who is loving to their children, donates to charity and so on. And he or she  may be perfectly sincere in claiming not only that there is nothing wrong in avoiding tax, but that their legal, contractual and moral duty point to the rightness of doing everything possible to minimise the tax liability of  the company and the shareholders. Their conscience is clear and they can recommend to others that they do likewise. And they might dispute the argument that their tax avoidance schemes are bad for society: tax, they might argue, blunts the incentive to build a flourishing business which is just the thing society needs. So perhaps inequality and smaller state are outcomes we should aim at, not avoid, if the rewards incentivise the individuals to enrich themselves. Such claims are of course open to debate and contradiction, but the point here is that ‘moral’ arguments alone are unlikely to proved decisive, assuming the CEO is prepared to enter a moral debate at all. A likelier response would be the retort that you are moralising on a topic that is not essentially about morality. This is business. It’s here we come to Hegel.

Hegel’s Philosophy of Right represents a major challenge to the kind of thinking I’ve just been describing. It’s a rich text with a great deal to say about how we should think about law, habit, custom, property, morality and the state. All I will do here is take a key concept from that text and apply to the issue of tax.  This is worth doing, despite the unavoidable oversimplification because it helps us to think again about the kind of society that can tolerate tax avoidance, not to mention our vast disparities of wealth and power. The concept I want us to consider is that of the ethical life of a community, what he calls sittlichkeit. It is a conception that has its origins well before Hegel’s time – in Montesquieu and long before that in Plato and Aristotle. However, in Hegel’s hands in becomes a very interesting way of thinking about modern societies, ours included.


Let’s suppose there is a fairly typical adult person living in a modern, economically developed and democratic society (large assumptions, I know). This person, we will call her Jane Doe, can be considered in a variety of ways. We can think of her as an individual, a free agent striving to get on in life, trying to make a living, getting by at least, and perhaps doing better than that. To live any kind of stable life, she is going to need a society that has rules which will safeguard her life and possessions, and let her get on with her life without interference from others, as she in turn will have to accept that she must not interfere with those other people. This is the realm of what Hegel calls abstract right. We might sum it up by saying: the rule is do as you like as long as you neither do nor harm others. One conception of the state, popular in many Anglo-Saxon countries, is that it is the external agency responsible for enforcing those rules. Much liberal political thought is tempted to stop at about this point.

Yet there is something one-sided about this picture of Jane as a bearer of abstract right, bumping up against others, making contracts, alliances, competing or co-operating as she and they choose. She is also a moral being: a subject with values, ideas and ideals who makes judgments about what is  right. This is a vital counterweight to the idea of Jane as simply yet another legal object, moving through social space as she tries to maximise her advantages. She has a conscience, and she may regard her conscience as sovereign. The problem is one we have already encountered: everyone has a conscience, everyone can tell you what they think is right. But not everyone will agree on what that right thing is. Imagine a world in which Jane simply follows her conscience, her inner voice that tells her what is right : she will come up against Bob, Fatima and Harry who also have consciences and ideas of what is absolutely good or right. They may well clash. Perhaps she will meet the CEO we discussed earlier: s/he may well have very different ideas to Jane about how much tax they should be paying. How can there be agreement here, if everyone’s conscience is authoritative?

If we view Jane Doe as a desiring, striving ego, doing her best against all the others in the same constricted space in which rules are enforced in order to impose a minimum of order we have something not much better than a war of all each against all (I often feel like this while commuting to and from work). Jane will seek to maximise results for herself, balanced against the need to reach some kind of deal with all the other egos. Presumably she will pay as little tax as possible,  just enough to keep the rules being enforced that keep the streets safe at night. But if we think of Jane as an individual who follows her conscience and her personal vision of what is good for all we have something potentially as bad if not worse: a kind of war of the righteous. If Jane can’t get her way, will she impose it on the rest of us by force? will the CEO? The fact that Jane and the CEO may both be sincere won’t help us here: sincerity is no guarantee that one is on the right track. It is certainly no formula for living with others who disagree. In the first case Jane is driven by her desire to survive, in the other she is potentially condemned to beat her head fruitlessly against a world which won’t listen to her demands for justice, goodness and fair taxes. In neither case is she truly free, according to Hegel.

Sittlichkeit is the context in which it is possible to attain real freedom and self-determination. It is not a term that has a straightforward equivalent in English, but it is often conveyed by terms like ‘ethical substance’ or ‘ethical substrate’. What it signifies is familiar enough. The idea directs our attention to the  real structure of human interaction, which is based on a range of things: laws, customs, obligations, even etiquette and common politeness. It is the life lived in practice by people who  have been socialised into a community. This is the world of shared ideals, notions of decency and fairness – and their opposites. It is the normative soil in which abstract right and morality grow: they depend on it, and any conception of Jane Doe’s life that emphasises abstract right or moral intuition alone is seriously lacking. And these norms imply duties, which include, but are not limited by, explicit laws and  personal conceptions of what is right thing to do.

When Jane gets up in the morning she is immediately plunged into a world which involves duties arising out of her concrete social position: her  relations with others: as a wife, say, as mother, as an employee or employer, voter, teacher or student – and as a tax payer. These duties aren’t abstract moral ones and they don’t spring arbitrarily from Jane’s breast: they are all arising out of the social contexts in which Jane lives, moves and has her being. Insofar as she has internalised these duties, that is, so far as she identifies with them as things she wants, they are her volitions, things she freely wills. Complex modern societies  envelop all their citizens in a dense matrix of such duties. Most of it is unwritten, and includes the tacit rules by which people live – and which imply that the individual can read between the lines of what is being explicitly said, can grasp spirit as well as letter and understands when something is implicit, or is meant metaphorically (Slavoj Žižek is illuminating on the psychoanalytical dimension of this). She wills them in as the kinds of things one wills in order to live a life. According to Hegel, this acceptance of duty is also freedom. But how?

On the face of it, sittlichkeit as  a dense mass of duties and norms would seem to be the opposite of freedom. Hegel, however, does not agree. Duties do not bind and restrict: ‘in duty the individual finds his liberation’ (Philosophy of Right, S. 149). For Hegel, the duties of the ethical world provide us with a way out of the merely natural impulses of the individual and the hopelessness of the moral self that can never see the goodness it wants reflected in the world around it. This can sound ominous. Is Hegel advocating a kind of authoritarian state? The answer is no: for Hegel modern sittlichkeit (in contrast to that of earlier epochs) must include autonomy, personal rights and must be able to be reflectively endorsed by an individual. One must find that one’s conscience is not at war with one’s duties. That this could be so should be no surprise, since the individual -our Jane Doe – has been formed, socialised, by that very sittlichkeit within which she lives. Freedom, for Hegel, is not something one just has, it is something one achieves through the development of the self, which grows on the soil of sittlichkeit. One cannot be free if one just follows natural impulses, as it will lead to a war of all against all, a clash of egos. Nor can one be free if one is alienated morally from the shared, really existing structures and institutions of society, for in such a case one will either be in a futile war with it, or one will retreat into the lonely satisfactions of being a ‘beautiful soul’, living in and on such a society while refining one’s impotent contempt for its sinfulness. For Hegel, it is only in and through the right kind of really existing social life that one can achieve freedom.

The beautiful soul is unfree

The beautiful soul is unfree.

I have said nothing here about the other aspects of social life Hegel talk about in the Philosophy of Right: the formative role of the family, civil society, in which the individual pursues his or her career (or fails to pursue it: unemployment and poverty are still possibilities in this vision of society) and political realm, in which public authority and law have their place. For Hegel, civil society is the social context in which our private interests are promoted (still grounded in the ethical substance, remember) and political community is where we focus on the good of the community itself, the common good, or public interest. It is this that the self conscious, self-determined citizen will promote for its own sake; it is here that she will be a truly communal and universal being. But this can only occur if the self has been nurtured into a genuine web of norms by which notions of decency, fairness, and happiness can be lived, and not merely dreamed about.

But sittlichkeit is also a problem. Rather than a benign web of duties and norms, forming the happy citizen in a benign matrix of habit and attitude, it can have quite other meanings. I said earlier that for Hegel the ethical substrate had to be responsive to the needs and wishes of the self-aware modern citizen: something she can reflectively endorse, something which finds a place in it for her autonomy, and which guarantees her rights as a person and a citizen. But what if it doesn’t do this? It might well be one in which individuals and groups do not find their place, because they experience the ethical substance as alien, oppressive and constrictive:  Law, which simply perpetuates itself. Or just ideology, a kind of waking dream, driving  bland consumerism and obedience to a class or elite that manipulates rather than serves the social whole. Here the ‘ethicality’ of society becomes a kind of trap or cage, the thing that needs to be overcome to achieve true emancipation.

But perhaps not. Rather than viewing this state of affairs as a ‘toxic sittlichkeit,’ the enemy of true liberation, it might be better be conceived as the antithesis of true ethicality. In Hegel’s terms, there can be nothing truly ethical about a society that cramps and crushes the human subject. Hegel saw the demand for freedom as the distinguishing mark of modern societies. We could see the  sittlichkeit of moderns as an imperfectly realised thing, as yet unachieved in our unjust societies. Hegel famously, or infamously, wrote that ‘the rational is actual, the actual is rational’. What he did not mean by this was that whatever we’ve got must be as it is, and is therefore right. He was at pains to distinguish between the rational essence of a thing and its possibly inadequate expression in the contingencies of ordinary life.  In Hegel’s terms, a modern society that does not promote human freedom is one in which its rational essence has not been ‘actualised’. What happens merely to exist in such a flawed society (a society of alienation and exploitation) is out of kilter with what a fully rational state would truly be. Hegel is not an apologist for the status quo. The kind of state Hegel outlines in the Philosophy of Right is one he thinks is the rational one demanded by modernity. It is not a guarantee that what we have now is rational and thus OK, anymore than, say, the creaking transport infrastructure that Britain groans under is the rationally ‘integrated transport system’ of a modern state.. In this sense, we don’t have an actual transport system. One might be might extend examples of this kind quite a long way, to include housing, education – and tax.

It’s important not to think of sittlichkeit as an inert thing, timeless and seamless. It is deeply historical, and subject to change; it is also always incomplete and open to dispute. Historical memory is embedded in that web or norms and meanings. But culture is something that is constantly made and remade. Laws, norms and ideals are the deposit of the actions of previous generations, and are thus open to being revised by the present, for the future.  It is thus  also the womb in which the form of a better society can be discerned in the hopes and dreams of yesterday and today. If the sittlichkeit is in some sense invaded by something else,  like a virus or poison invading an organism, it is also itself the place from which everything hopeful comes, from the utopian dimension in art and religion to the simple cry of outrage at injustice. Thinkers like Marx, Gramsci and Bloch understood it, not a neutral thing, but as a site of struggle. It is, ultimately, where the justification for the outrage at inequality and oppression come from, and where we find the basis for a response to the complacent CEO or accountant who can’t see why it isn’t OK to avoid tax.

So let us return to the tax problem. What should you or I or Jane Doe make of the sense of outrage felt at the tax avoidance measure put in place by corporations and rich individuals? If we use Hegel’s notions of an ethical community we can see that there is justification in that outrage. The CEO who denies the moral claims on him or her is both right and disingenuous. For there is more than morality at stake here: there is the notion of social life itself. The anger that we feel is that of the person who senses that the ethical substance has been damaged or subverted. In isolated cases such subversions can be seen for what they are, isolated breaches in the fabric of our common lives, which social pressure and legislation can fix. The problem we face, I suggest, is when the breaches are so numerous and repeated that the sittlichkeit itself is brought into contention. The question of what one does in an unjust society, one that denies human freedom through the lawless activities of a self-interested class and the workings of an economy based on exploitation is one for Marx rather than Hegel. Hegel was aware that workings of civil society (the economy) would lead to the immiseration of a class of people, but never found a convincing solution to the problem. We can wait or better work for the kind of large scale change in the economy and society as a whole that would represent some kind of revolution in the long run. But in the long run, as the saying goes, we are all dead. What should one do now?

In the short term we can point out that tax is part of the price for civilised life, and demand that the law reflect this. The key  is to build on people’s justified sense of outrage at goings on at e.g. the banks, to push back against the Me First ideology that’s been dominant since the neoliberal surge in the 1980s. It’s a question of working for  change in the ethical substance of our society by drawing on the the norms of justice and fairness that already exist there.  This is desirable and practicable, and the basis for it already exists in the anger at the unfairness we see all around us. What is seen as acceptable can change. Struggles against sexism, racism and abuse of all kinds have made progress, although that progress can never be taken for granted.  Law, here, will not be enough unless the sense of what is intolerable is made manifest, if necessary by direct action by groups like UK Uncut It doesn’t happen overnight, but it can be done. Think of the changes we’ve seen on Green issues, child abuse,racial and sexual discrimination, homophobia,  hate speech, passive smoking and so on. The fact that that very large numbers of people already feel a sense of outrage at the existence of food-banks in a rich country, obscenely large bonuses paid to bankers, people being denied housing, zero contracts,  corporate tax dodging and escalating inequality is  a sign that that the ethical sense can be a source of radical change – if we mobilise and fight for it. Ensuring that such changes move in an enlightened way, promoting freedom rather than oppressing it, is what progressive political and social action should be all about.

The fact that ethics doesn’t always motivate isn’t an argument against this shift, any more than the fact people steal is an argument for thieving. We need to have something deeper than law: a shared orientation towards the common Good (ethics) and not merely either tax law or so called ‘private morality’. This concerns Raymond Williams’ ‘structures of feeling’, and Hegel’s ‘ethical substance’, ways of life and feeling. The idea that since the taxman is the enemy, one is justified in avoiding tax, via off shores, tricks in accounting etc. has to be fought. And as we also know, these practices heavily favour the rich. Their motto is ‘only the little people pay tax’. It’s got to stop.



About Chris Horner

teaches, studies and writes about philosophy and many other things. He is the co-uthor (with Emrys Westacott) of the CUP book 'Thinking Through Philosophy'. He has studied at the University of Sheffield, UEA, Goldsmiths and Roehampton University and has a PhD, the subject of which was Hannah Arendt and Kant's theory of reflective judgment. He has a strong interest in politics, history, literature, the visual arts and music.
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