It is no limitation upon property rights or freedom of contract to require that when men receive from government the privilege of doing business under corporate form … they shall do so under absolutely truthful representations … Great corporations exist only because they were created and safeguarded by our institutions; and it is therefore our right and duty to see that they work in harmony with these institutions. Theodore Roosevelt, December 3, 1901
In debates about tax avoidance we often hear that company directors have a duty to maximise profits by minimising tax, so long as they act within the law.
In 1901 a Republican President was able to grasp that the corporate form is a privilege granted by the state. Corporations are not natural persons with inalienable rights, they are convenient fictions given substance by state power. Their directors can and should be required to ensure that their representations to the tax authorities are absolutely truthful. The avoidance of tax brings discord to the institutions that create and safeguard the corporation. This discord is undesirable and no principle of natural justice prevents us from applying the remedy.
The next time Jeremy Paxman tells someone from UK Uncut with an air of exasperated triumph that tax avoidance is legal, I hope they explain that they are campaigning for the law to change so that company officers are required to deal candidly with the tax authorities, according to the spirit as well as the letter of the law. Directors who do not do so will be disqualified and their companies wound up, with no limitation upon property rights or freedom of contract.