Why do peo­ple care more about ben­e­fit ‘scroungers’ than bil­lions lost to the rich?

The Guardian Australia - - Opinion - Robert de Vries and Aaron Reeves

The Par­adise Pa­pers have once again re­vealed the in­ge­nu­ity and en­ergy the su­per-rich are will­ing to de­ploy to keep their money away from the tax­man. By il­lu­mi­nat­ing the scale of this in­jus­tice, jour­nal­ists have pro­vided an in­valu­able ser­vice. And yet the rev­e­la­tions do not seem to have gen­er­ated the level of pub­lic out­rage that might have been ex­pected.

At a time of stag­ger­ing global in­equal­ity, it is per­haps sur­pris­ing that peo­ple are not more an­i­mated by the de­ter­mi­na­tion of the ul­tra­rich to avoid their obli­ga­tions to sup­port our roads, hos­pi­tals, soldiers and schools – when reg­u­lar cit­i­zens are un­able to take ad­van­tage of such ar­range­ments. How­ever, this rel­a­tive lack of con­cern is con­sis­tent with re­search on peo­ple’s at­ti­tudes towards tax avoid­ance.

Last year’s Bri­tish So­cial At­ti­tudes sur­vey asked Bri­tons about their feel­ings on this is­sue. Our anal­y­sis of this data (with Ben Baum­berg Geiger of the Univer­sity of Kent) re­vealed that the Bri­tish pub­lic be­lieves tax avoid­ance to be com­mon­place (around one third of tax­pay­ers are as­sumed to have ex­ploited a tax loop­hole). In moral terms, peo­ple seem rather am­biva­lent; less than half (48%) thought that le­gal tax avoid­ance was “usu­ally or al­ways wrong”.

By con­trast, more than 60% of Bri­tons be­lieve it is “usu­ally or al­ways wrong” for poorer peo­ple to use le­gal loop­holes to claim more ben­e­fits. In other words, peo­ple are sig­nif­i­cantly more likely to con­demn poor peo­ple for us­ing le­gal means to ob­tain more ben­e­fits than they are to con­demn rich peo­ple for avoid­ing tax. This is a con­sis­tent find­ing across many dif­fer­ent stud­ies. For ex­am­ple, de­tailed in­ter­views con­ducted by the Joseph Rown­tree Foun­da­tion in the wake of the 2008 fi­nan­cial cri­sis found that peo­ple “tended to be far more ex­er­cised by the prospect of low-in­come groups ex­ploit­ing the sys­tem than they were about high-in­come groups do­ing the same”.

This dis­crep­ancy is re­flected in gov­ern­ment pri­or­i­ties. Deep pub­lic an­tipa­thy towards ben­e­fit “scroungers” has been the rock upon which suc­ces­sive Con­ser­va­tive-led par­lia­ments have built the case for aus­ter­ity. Through­out his pre­mier­ship, David Cameron, along with his chan­cel­lor, Ge­orge Os­borne, kept the op­po­si­tion be­tween “hard­work­ing peo­ple” and lazy ben­e­fit claimants right at the cen­tre of their mes­sag­ing on spend­ing cuts. Though ges­tures have been made towards ad­dress­ing wide­spread tax avoid­ance by the wealthy, very lit­tle has ac­tu­ally been achieved. This stands in stark con­trast to the scale and speed with which changes have been made to wel­fare leg­is­la­tion.

Will the Par­adise Pa­pers shift the pub­lic’s fo­cus? The leaks alone are seem­ingly not enough. The 2016 Bri­tish So­cial At­ti­tudes sur­vey was con­ducted just four months af­ter the re­lease of the Panama Pa­pers. Even then, the Bri­tish pub­lic re­mained more con­cerned about ben­e­fit claimants than tax avoiders.

Fun­da­men­tally, the Par­adise Pa­pers are about num­bers – vast sums of money dis­ap­pear­ing off­shore that could be spent on pub­lic ser­vices here in the UK. How­ever, as the for­mer chair of the UK Statis­tics Au­thor­ity, An­drew Dil­not, has of­ten pointed out, peo­ple are bad at deal­ing with num­bers on this scale. Un­less you are an econ­o­mist or a statis­ti­cian, num­bers in the mil­lions and bil­lions are just not par­tic­u­larly mean­ing­ful.

The key is to link these num­bers to their con­se­quences. The money we lose be­cause peo­ple like Lewis Hamil­ton don’t pay some VAT

on their pri­vate jet means thou­sands more vis­its to food banks. The bud­get cuts lead­ing to ris­ing home­less­ness might not have been nec­es­sary if Ap­ple had paid more tax. Fewer peo­ple might have killed them­selves af­ter a work-ca­pa­bil­ity as­sess­ment if com­pa­nies like Al­pha­bet (Google) had not reg­is­tered their of­fices in Ber­muda, and the down­ward pres­sure on ben­e­fits pay­ments was not so in­tense.

The causal chains con­nect­ing these events are com­plex and of­ten opaque, but that does not make their con­se­quences any less real, es­pe­cially for those who have felt the hard edge of aus­ter­ity.

The Par­adise Pa­pers have dragged the murky world of off­shore fi­nance into the spot­light. How­ever, calls for change may founder against the Bri­tish pub­lic’s per­sis­tent fo­cus on the per­ceived crimes of the poor. That is, un­less we – as aca­demics, politi­cians, jour­nal­ists and oth­ers – can ar­tic­u­late how the de­ci­sions of the very rich con­trib­ute to the ex­pul­sion of the vul­ner­a­ble from the pro­tec­tion of state-funded pub­lic ser­vices. Quite sim­ply, peo­ple get hurt when the rich don’t pay their taxes.

• Robert de Vries is a lec­turer at the Univer­sity of Kent; Aaron Reeves is a re­search fel­low at LSE’s In­ter­na­tional In­equal­i­ties In­sti­tute

‘Fewer peo­ple may have killed them­selves af­ter a work-ca­pa­bil­ity as­sess­ment if Al­pha­bet (Google) had not reg­is­tered its of­fices in Ber­muda, and the down­ward pres­sure on ben­e­fits pay­ments was not so in­tense.’ Pho­to­graph: Drew An­gerer/Getty Images

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