ABC Taxes, Tips & Tools

What is Ethics?

Ethics is con­ven­tion­ally defined as a sys­tem of moral prin­ci­ples gov­ern­ing the appro­pri­ate con­duct for a per­son or group.  But this def­i­n­i­tion is kind of vague as it doesn’t really address appli­ca­tion in real life.  How does one arrive at per­sonal gov­ern­ing prin­ci­pals, and why?  That is the ques­tion of ethics in a nutshell. 

Real­ize ethics oper­ates in con­text.  In any given sit­u­a­tion, even if you are liv­ing in a cave by your­self, you will have inter­ac­tions with your envi­ron­ment.  What do you eat? What resources do you use and how do you man­age them?   What do you do with your waste? Add another per­son to the mix and you have to worry about their rights, feel­ings and the social con­text as well.  Make one or more wrong deci­sions and you will find your­self freez­ing, alone, in the dark, up to your eyes in your own excre­ment with noth­ing to eat.

What Ethics is not. What Ethics Is.

Ethics can­not be equated with feel­ings, laws, reli­gion or even soci­etal norms; it is easy to find cases where eth­i­cal con­duct is not nec­es­sar­ily equated these things.  Con­sider that a per­son enjoys dri­ving a car very fast; if this dri­ver decides to race through a neigh­bor­hood it may feel good, but it makes this uneth­i­cal dri­ver very dan­ger­ous to all those around him or her.  As for fol­low­ing the law, slav­ery was a part of US law, but clearly slav­ery devi­ates from eth­i­cal norms as well. If ethics were a mat­ter of reli­gion, then only reli­gious peo­ple could be eth­i­cal, but ethics must apply to all peo­ple of all faiths and to peo­ple who are not reli­gious at all. Finally if soci­ety itself drove ethics then we would merely have to poll the entire soci­ety to find out what was right, and then do that, but entire soci­eties can be cor­rupt as in the case of Hitler’s Third Reich; blindly fol­low­ing the pack does not make for eth­i­cal deci­sions either. 

Since we can’t rely on the law, our feel­ings, reli­gion or soci­ety to tell us what ethics is we must find a well-reasoned basis for defin­ing what is right and what is wrong. Right and wrong involves not only intro­spec­tion, but also eval­u­at­ing our rela­tion­ship with our envi­ron­ment via per­ceived rights, oblig­a­tions, ben­e­fits to soci­ety, fair­ness and other virtues.  For exam­ple there are eth­i­cal stan­dards not to rape, steal, mur­der, assault, slan­der and defraud.  Eth­i­cal stan­dards embrace cer­tain virtues of hon­esty, com­pas­sion and loy­alty.  Fur­ther­more eth­i­cal stan­dards include stan­dards relat­ing to rights, such as the right to life, the right to free­dom from injury and the right to pri­vacy.  Such stan­dards are stan­dards of ethics because they are sup­ported by well-founded rea­son­ing. Fur­ther­more, we need to keep eval­u­at­ing our posi­tions with respect to right and wrong as we gar­ner more infor­ma­tion through our per­sonal experiences.

Ethics is the cor­ner­stone to mak­ing good decisions.

One can­not leg­is­late moral­ity or intel­li­gence, but ethics attempts to address both of these things on a per­sonal level.  Ethics sup­ports good deci­sion mak­ing.  When mak­ing a deci­sion one should not only con­sider the con­se­quences and util­ity of a deci­sion, but also oth­ers’ rights, whether a deci­sion is fair and just, and whether it serves the com­mon good or not. 

Ethics and deci­sion mak­ing in the BP Disaster

Clearly BP con­sid­ered the util­ity of their deci­sion.  They are a com­pany who has an oblig­a­tion to its share­hold­ers to use their money wisely.  Drilling where they did seems like it was a good idea; it appears there is a lot of oil there.  They knew they were drilling in a dan­ger­ous place and they had been handed down rig­or­ous stan­dards to deal with the dan­gers of that sit­u­a­tion.   They knew the con­se­quences would be dire if they failed.  So why did they fail? 

I con­fess I know noth­ing of about oil-well drilling in the deep ocean, and my opin­ion rests on the con­clu­sions of experts describ­ing what went wrong. If the con­clu­sions of these wit­nesses and experts ulti­mately prove to be true, then, in my opinion, this dis­as­ter occurred because the peo­ple empow­ered to make deci­sions did not make eth­i­cal decisions.  They were work­ing in a dan­ger­ous place; they com­pounded the sit­u­a­tion by being mak­ing stu­pid deci­sions to save a lit­tle bit of money. They appar­ently did not ade­quately incor­po­rate all of the infor­ma­tion at hand and ignored the very real con­se­quences of a fail­ure; they appar­ently did not con­sider the rights of those who would be injured by their decision. Had they made eth­i­cal deci­sions, this dis­as­ter might not have happened. 

Deci­sions based on hubris, greed and the avoid­ance of unpleas­ant emo­tions are com­pletely under­stand­able human fail­ings.  That is why it is vital for the peo­ple at the top of the deci­sion mak­ing trees, espe­cially those who can impact the lives and liveli­hoods of so many others, to make eth­i­cal decisions.

Ethics, Taxes & the Indi­vid­ual Tax­payer & Small Busi­ness Owner

I am sure as you are read­ing this you are think­ing,” I am not British Petro­leum.  If I decide to cut a cor­ner or bend a tax law for finan­cial rea­sons, I am not going to pre­cip­i­tate a national dis­as­ter; I am not hurt­ing any­one one.”  We disagree. 

Every time an employer col­lects his employ­ees’ pay­roll taxes and does not send them into the gov­ern­ment, that employer is steal­ing from that employee-it’s was not the employer’s money to begin with.  It’s not only unfair, it’s thiev­ery.  Fur­ther­more this employer is steal­ing from every tax­payer who does fol­low the rules, because it falls on those who do pay into the sys­tem to cover the short­fall.  A com­pany that does not pay into the unem­ploy­ment sys­tem is steal­ing from every employer who does pay as those pay­ing into the sys­tem cover the short fall and pay higher taxes as a result.  A tax payer who cheats on their taxes is steal­ing from every tax­payer who does pay what they owe.  

A sin­gle drop of water raises the sea; a large enough num­ber of indi­vid­u­als not pay­ing their fair share do make a dif­fer­ence to the rest of us.  It is nei­ther fair nor just for a sin­gle tax­payer to expect every­one else to cover their oblig­a­tions. Theft does not serve the greater good.  Bilking the sys­tem is dishonest.  Failure to deposit pay­roll taxes is a heart­less act; the gov­ern­ment may make an employee pay taxes they already paid once again. 

Fail­ure to pay taxes is also short-sighted.  There are very real pun­ish­ments asso­ci­ated with defraud­ing the gov­ern­ment and fail­ing to pay taxes: Penal­ties, inter­est, poten­tial seizure of assets, gar­nish­ment of wages & bank accounts, and even jail time.  From a risk-reward assess­ment, sav­ing a few bucks here and there can cost big later on, not to men­tion the costs of hir­ing pro­fes­sion­als to deal with the prob­lem once the IRS catches on. 

A busi­ness owner is a per­son in a posi­tion of lead­er­ship.  How a busi­ness owner behaves does influ­ence the behav­ior of their employ­ees and ven­dors.  If the busi­ness owner thinks it is okay not to pay taxes, then their employ­ees may think steal­ing from the boss is okay too. 

In con­clu­sion, being a tax cheat does not even serve vested-self inter­est over the long haul. 

Whereas we at Art & Busi­ness Con­sult­ing, LLC can help you get back every dime in taxes you are enti­tled to and can assist you in resolv­ing your tax prob­lems, we are kind of like an exec­u­tive at the top of a deci­sion mak­ing tree.  We are oblig­ated to serve not only our clients, but our soci­ety as a whole. We must make eth­i­cal decisions.  As always Art and Busi­ness Con­sult­ing is here to help.  If you find your­self in an eth­i­cal quandary, or need help with another small busi­ness and or tax issue, please give us a call.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.