Sunday, July 29, 2007

Sunday dollars+sense: What makes a tax evader?

I grew up on the music of Johnny Farnham, Masters Apprentices, Little River Band, and later John Farnham.

Through it all behind the scenes and sometimes in front of the scenes was the bass guitarist and rock industry manager Glenn Wheatley. He mortgaged his house to fund Whispering Jack.

Now that he's in jail after being convicted of dodging $318,092 in tax through a series of fake Swiss loans, I'm wondering whether other people I've admired have acted the same way.

In fact I am wondering whether all of us would, given the opportunity..

It seems that the answer is no. An Australian academic now teaching in the United Arab Emirates has just co-authored an international study of attitudes to tax evasion. Dr Sanjoy Bose finds that Australians are less approving of it than are our cousins in the US and New Zealand. But he finds that our overseas cousins are not particularly impressed with it either. In each country, the women were more opposed to tax evasion than the men, but again even the men weren't particularly keen on it.

Then he tried to work out why the people who did approve of tax evasion thought it was okay. In an Australia-only survey he fired 18 questions at university students along the lines of "is tax evasion ethical if the tax rates are too high?", "is tax evasion ethical if much of the money is wasted", "is tax evasion ethical is everyone else is doing it?" and so on.

He found that the questions didn't much matter. For most Australian students the answer was always "no".

But then he discovered that not all types of students thought the same way. The Melbourne students most likely to approve of tax evasion were those studying business and economics. The students least likely to approve of tax evasion were those studying for religious ministry.

(There was no category for aspiring rock musicians so we can't draw any conclusions about the attitudes that shaped Glenn Wheatley.)

The findings fit in with other research suggesting that economics students are more self-centred and less generous than are other students.

What I want to know is why they are like that. Did studying economics make those students more greedy, or were they always like that and so naturally drawn to the study of money?


Robert W. Mcgee, Barry University - Andreas School of Business, Sanjoy Bose, Zayed University
The Ethics of Tax Evasion: A Survey of Australian Opinion, April 2007

Robert W. Mcgee, Barry University - Andreas School of Business, Sanjoy Bose, Zayed University
The Ethics of Tax Evasion: A Comparative Study of Australian, New Zealand and U.S.A. Opinion, April 2007

Clive Hamilton ,
Paying our dues to society, The Age July 23, 2007

Hat Tip: Andrew Leigh