This morning international news was all a flutter about Stuart Gulliver, chief executive of HSBC, who sheltered millions of pounds in a Swiss bank account, the funds to which came ostensibly via a registered company in Panama.
That a corporate executive of his stature has a Swiss account is on its own of little account. That he has money slushing about between different banks in different countries is also not uncommon. It would indeed be more surprising if he hadn’t such accounts – except for the fact HSBC has been the center of a “we provide our clients “dodgy” tax shelters and sometimes money-laundering” services controversy for some time now.
“Income tax has made more liars out of the American people than golf.” — Will Rogers, humorist
Has Gulliver been purposely avoiding taxes? Of course he has. No bank executive these days doesn’t. But there are lines of acceptable in tax avoidance — from the murky grey just-bad-form but still-okay, to the you’ve-stepped-over-into-dark shadows often illegal ones.
Did Gulliver stray into the shadows? Legally, probably not. Did he cross from good to poor citizenship? Undoubtedly.
Paying taxes is after all a measure of good citizenship. Good citizens pay them where some might say bad citizens set up foreign companies to funnel income through to unidentifiable Swiss bank accounts, and/or all sorts of other financial gyrations to avoid them.
“Taxes are what we pay for civilized society.” — Oliver Wendell Holmes, Jr., U.S. Supreme Court Justice
I am not saying Mr. Gulliver is a bad citizen. Not at all. But many find it ludicrous why already very well off people typically work so hard to avoid paying taxes. If you are rich you get this; if you’re not, the of culture wealth is often just too far beyond us to understand.
But if you care about sustainability and/or you have lived or worked in a country where tax avoidance is common, you will notice life is hard for many, many more than it is easy. That is to say, good tax systems seem to correlate with decent general welfare.
Most studies on tax avoidance and the common good, unfortunately, are ambiguous at best. Yet one can’t help but eyeball a tax-human welfare correlation in Norway, Sweden, Canada and the like, where more people are doing o.k. than naught and tax avoidance gymnastic are generally frowned upon.
Sidebar to think about – Is it outlandish to hypothesize an association between growing tax avoidance, concentration of wealth, and deteriorating national infrastructure even in well-off countries?
We can’t blame Gulliver for the practice of tax avoidance, income disparity, or the state of our bridges, roads, educational systems etc. But we can question his civic spirit as business leader. Given recent revelations/allegations of HSBC’s conduct we might also want to question his bank’s commitment to anything on the sustainability front as well.
“Where there is an income tax, the just man will pay more and the unjust less on the same amount of income.” — Plato
Gulliver? He didn’t do anything outrageous or uncommon for someone in his position. Mucky yes, illegal no. Even so, if enough people – particularly influential people –condone tax avoidance through words or action, well, bad things are going to happen to civilization, that much is clear.
Let’s not kid ourselves, Mr. Gulliver is a poor example on many fronts. He let his employees, clients (including me), company and country down.
Perhaps HSBC should show a little civic spirit of their own (not to mention protect their brand) and let him go, free to wander over the lines of his own choosing without them.