There is an interesting kerfuffle brewing in the upper echelons of the UK tax industry, among senior tax barristers.  These men, Queen’s Counsel as they are known by virtue of their formal stamp of approval from no less than the UK head of state herself, are the be-all-and-end-all of UK tax advice.  Supposedly, no one speaks more authoritatively on the application of UK tax law than they do.  And it turns out that a number of them have been systematically giving wrong advice, because it pays much better to tell tax avoiders that their plans work than it does to tell tax avoiders to go away and pay their taxes.  This has all been revealed by whistle-blower Jolyon Maugham in a blog post – and the current state of the ensuing brou-ha-ha is described in this piece by the Society of Trusts and Estates Practitioners.

What we at Women For Tax Justice find interesting about this is the expressly gendered way in which the discussion has been framed.  All over the (admittedly obscure) corners of Twitter where such matters are debated, Maugham’s label for these tax-cheat’s-tax-cheats, “The Boys”, has been adopted without question.  And it is easy to see why if you look at membership of London’s five leading tax barrister outfits, Pump Court Tax Chambers, Gray’s Inn Tax Chambers, 15 Old Square, Temple Tax Chambers, and 11 New Square. There is only one female QC among them, and she appears to have a litigation-focused practice so probably has little time for telling expensive lies about the law to tax planners in order to buy herself another Bentley.

This is not to suggest that men are somehow genetically more likely than women to be venal, or to be drawn to professional practices that are low on integrity and high on personal reward, often at the expense of society’s poorest and most vulnerable.  But it does tell an important story about privilege.    Because no doubt these men do not feel that they are behaving wrongly, and their moral self-satisfaction comes in part from being top dogs in their field.  If your wrist cannot be slapped because you are the final arbiter, it is very easy to fall into a habit of thought whereby you cannot see it as needing to be slapped.  The exercise of power and privilege is self-legitimizing in the minds of those who exercise it.

This is no mere philosophising; it is the practical reality.  Suppose Mr. Maugham were to report this QC whose opinion was “at best incompetent, at worst criminally fraudulent” to the professional tribunal that could in theory call “The Boys” to account.  Who is to gainsay the QC when he says his advice represented a reasonably arguable position?  It is after all the job of these men to present what their clients do to ‘plan’ or avoid their taxes in as reasonable a light as possible, and tax QCs do it better than anyone.  For a tax QC to say that his advice represented a reasonably arguable position is for him to make what is in effect a self-truthifying statement.

This is what happens when accountability is sidelined and when privilege is permitted to be systematic and self-governing: truth and justice are subordinated to that privilege.  And as the gender make-up of the top end of the UK tax bar demonstrates, there is no more obviously systematic and self-governing privilege than male privilege.


Taxes and gender norms: who cares?


Taxes can seem far removed from women’s daily struggles; however in reality they play a crucial role not only in distributing wealth and resources, but also in perpetuating sexist gender stereotypes.

One of the major factors in defining women’s time, opportunities and income is their unpaid care work. This includes cooking, cleaning and care of children and the elderly – and also, in many developing countries, collecting water and fuel for domestic use. All over the world, women spend much more time than men on unpaid care, and indeed work longer hours overall when this unpaid work is taken into account. Unpaid care responsibilities profoundly impact women’s ability to take on paid work or pursue economic opportunities, and the types of work they are able to find and do. For many women and girls, their domestic duties also shape their educational opportunities and attainment. Many other important areas of women’s lives and rights are also affected, ranging from health to political participation.

Is this an inequality we are prepared to accept? As many development and human rights actors have argued recently (see Oxfam GB, ActionAid, the Gender & Development Network), tackling the gendered distribution of unpaid care work should actually be a core part of poverty reduction strategies – not to mention progress towards gender equality.

To achieve the change needed, it is certainly necessary to improve access to childcare, public service provision and workplace policies – but also to take a close look at tax systems.

Tax codes and tax policies are stuffed full of implicit and explicit assumptions about women’s role in society. In particular, income tax policies in many countries are based on the idea the men are/should be the breadwinners (and manage the household finances), while women are/should be carers and homemakers. Indeed, tax codes entrench and perpetuate this social arrangement. For example:

  • In countries with joint filing systems for couples, many women face a higher marginal tax rate on their first dollar earned than they would do as an individual (because their husband likely earns more than they do – hello, gender pay gap!). Faced with the prospect of low after-tax earnings, many women will decide it makes more financial sense not to enter the labour force at all.
  • When two-earner couples are taxed at a higher rate than one-earner couples, this may also be a disincentive to women working (given that the person who stays at home is usually a women, thanks again to pernicious gender stereotypes constraining the choices of both men and women).
  • Tax codes that attribute the non-labour income of a wife to her husband: e.g. the profits of a family business may be regarded as his income, regardless of her role in said business.
  • Tax exemptions and allowances that are automatically granted to the male spouse.
  • Tax allowances that favour households based on a male breadwinner/female carer model over a dual earner/dual carer model. For example, in many countries a taxpayer (implicitly envisaged in male form) can claim allowances for a household member who is financially dependent and contributes unpaid labour – representing a payment for unpaid work that goes to the spouse of the worker herself! These type of provisions may also create disincentives for men taking on more of the unpaid care work in the home – because if two parents split earning and care responsibilities more equally they would no longer be eligible for such support.

Simultaneously, measures on the expenditure side of fiscal policy that cut funding for health, care and social security (such as austerity measures) often increase women’s unpaid care work, as they step in to fill unavoidable care needs (for the sick, elderly, disabled people, or children) that the State will no longer meet. To politicians and policy-makers, women’s unpaid labour appears to be a cost-free, limitless resource – when in reality women have to make major sacrifices in order to increase their workload in the home, often at the expense of their health or financial security. (Meanwhile, serious measures to tackle tax evasion, close tax avoidance loopholes or raise taxes on the most wealthy could prevent the need for these cuts altogether.)

Tax systems do not exist in a vacuum. They embody and entrench all sorts of social norms and expectations. Some of these may be of social value: higher taxes on cigarettes, alcohol, or carbon emissions for example. However, others are profoundly damaging and discriminatory against those who do not conform to traditional family models or gender roles. It doesn’t have to be this way. If tax systems are capable of enshrining outdated gender norms it must be possible to design them to promote new, more egalitarian gender models. (One idea floated recently in the UK is redesigning tax credits to enable a separate work allowance for second earners, thereby encouraging more women in single earner couples to enter the labour market.) As Diane Elson says, the “design of income tax systems should proactively promote an equal sharing of both paid and unpaid work between women and men, not give incentives for the perpetuation of families with breadwinner husbands and dependent wives”.

Corporate inversions – the winners and losers


The debate over corporate ‘inversions’ (the practice of US businesses reincorporating overseas in order to avoid US taxes) has gone mainstream Stateside. Recently, both Jon Stewart (on the Daily Show) and Stephen Colbert have dedicated segments of their shows to inversions.  You can see both (funny and insightful) pieces on this page. (If the videos don’t work where you are – apologies, you should be able to find versions that will work for you on Comedy Central’s website or by Googling using the search engine of your choice.)

Stewart characterizes the inversions as “a win-win for everyone – and by everyone I mean only the corporations and their shareholders.” Congress estimates that inversions will cost the Treasury $19.5 billion over 10 years, but experts (and “communist rag” Fortune Magazine) say this estimate is far too low. What Colbert and Stewart do not mention are the victims of these schemes – tax avoidance in general being very far from a victimless practice. It is everyday people who feel the effects of these missing billions – from the burden of taxes shifted on to their labour and consumption to make up the revenue shortfall, to the declining quality of services and infrastructure funded from public resources. As we have outlined previously, women often take the biggest hits in this regard – and of course, are vastly under-represented among the corporate executives and shareholders who benefit.

A Republican senator shown in the Daily Show clip claims that “in a way, these corporations are economic refugees” from over-high taxes. Political blustering aside, what these inversions really mean is that there is less money to deal with the real refugees who are flooding into the US from Central America – tens of thousands of whom are unaccompanied children, who are being held and processed in woefully inadequate conditions.

[And here is a reminder that inversions aren’t the only way that US corporations avoid taxes.]