# Observed Financial Conduct



## Theoretical (Oct 13, 2006)

I'm not sure how to address this particular set of issues, but here goes. I've noticed a disturbing tendency among some Christians I know that does parallel many non-Christians' attitudes towards financial integrity.

Two individual cases come to mind, and there is a similarity in that both of the families are quite wealthy, both through inheritance and shrewd investing. "R" is the more serious case - and in his case, his actual Christianity is in question because of his strong Arminianism. He and his dad are very active stock and commodity traders, and both are extremely good at this sort of thing. Well, the problem is that there's all sorts of hints dropped of questionable tax-sheltering, and potentially some more serious issues otherwise. On a more basic level, both of them commit tremendous amounts of brazen piracy of DVDs (terabytes worth) and music, and do so quite shamelessly. Moreover, in a disturbing approach to the issue (especially for someone already possessing high wealth), he and his wife were trying to get another friend of mine in on an online poker scheme where the three of them would actively cooperate and share the earnings off the poor sop not in the same room as them.

"B" is a somewhat less serious issue that more involves pushing the limit than it does brazen illegality. This person and family's Christianity is strong, but I fear the implications of this possible blind spot. From what has been described to me, the family is quite frugal and makes numerous wise investments. However, something a bit disturbing was mentioned regarding buying small shares of ownership in various restaurants and enterprises around the country so that tax write-offs could occur due to provisions involving checking up on investments, when the main purpose of the trip was to visit family or friends. A justification used was that "well, taxes are too high anyway, why not work the system if there's provisions to do it".

I just worry about the implications of either of these leading to big IRS scandals and how it affects the appearances of the Church. I'm also curious as to what might be the root cause of some of this kind of thinking - like why this particular blind spot might exist. Also, any advice for dealing with this issue would be appreciated. My own family is fairly well-off, due to my mom's strong frugality and wise investments, but the distinction is that we work way beyond normal to ensure everything is completely in order with regard to records and otherwise. As such, I'm very, very sensitive to even the concept of financial improprieties.


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## Timothy William (Oct 28, 2006)

I know it is two weeks since you posted this topic, but if I could post my opinion in reply:

regarding tax sheltering, first, are they obeying all relevant laws, or are they hoping that they can be deceptive and the IRS will not notice? I do not think Christians are morally obligated to obey the so called "spirit" of the laws rather than the letter, but we are obliged to love our neighbour. Does the effort they put into (legally) avoiding taxes outweigh any benefit gained from doing so? As Christians, they should spend their money more wisely than the secular government would spend it. Unfortunately for many, perhaps most of us (myself included) this is not always the case. Do they spend their money with such wisdom and economy that it is worth their while, for the kingdom of God, for them to shelter it from the authorities, even taking into account the extra monies spent on lawyers, accountants etc? If, for example, they gain $0.50 for every $1 they deprive the government in revenue, once all costs on both sides are taken into account, is their spending so beneficial to the world at large and their fellow Chrisitans in particular that there is greater benefit from $0.50 of their spending than $1 of government spending? Are they motivated by genuine love, or by greed or pride in beating the authorities and being able to donate to their own favoured causes? 

I wouldn't have anything to do with such online gambling schemes as they propose. I would not say that gambling is itself immoral (I am unsure, do not take my word for it either way) and I think banning online gambling, as the US Congress recently attempted, is foolish and counterproductive, but this sounds like a scheme to profit from the ignorance of others. Ask them, does this produce any good anywhere, does it, for example, help to correct the odds involved in gambling towards true odds, or is it solely about creating and profiting from otherwise private information?

To be honest, the conduct of "B" sounds like brazen illegality. Most tax codes have, in the fine print somewhere, regulations to the extent that the primary or sole purpose of expenditure must relate to the business or investment for it to be considered a deduction. Also, regarding high tax rates, do the object to them because they morally oppose the government taking (stealing) from some to give to others, or are they the type who rant and rave about high taxes, but then are all in favour when the government spends on some scheme or payment of which the agree? If the latter, you might rebuke them for their hypocrisy; unfortunately such people are all to common in churches today. You may like to encourage them to greater honesty, but bear in mind that I am neither an accountant nor a lawyer, and I do not live in the US, so my knowledge is limited. 

I'm an economist of the Hayek / von Mises school, and no lover of big government, but I would be wary of both of these financial schemes.


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## Theoretical (Oct 29, 2006)

Thanks - I do greatly appreciate the reply - as it genuinely bothers me. And, since posting it, I did ponder about just how truly questionable B's activities really are.

A couple of follow-ups.

For R's case, I'd definitely say the family doesn't use the extra money for the kingdom of God and that it is mostly greed - the same basic motivation is behind the extraordinary piracy.

For B's case, I am unsure of the extent of the hypocrisy as to the moral opposition to such high taxes - though I'd suspect more hypocrisy on the parents' side of the occasion. My friend is more than a little bit naive about a lot of things (mostly in a good way, but bad with something like this), so I might well be able to talk at length with the person privately as to individual conduct described to me in confidence (which is why I'm being very anonymous here). On my friend's part, it's probably that level of informed ignorance whereby parents, crafty accountants, and lawyers convinced the person that this sort of thing was actually legal and OK. In that regard, especially since the information was shared in confidence to me by my friend (and the person does take my advice seriously - especially speaking as a Christian brother and mentor) - how should I proceed?


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