How a Utilitarian thinks about tax avoidance.

Tax avoidance is the legal use of the tax law to one’s own advantage, to reduce the amount of tax payable. For example, it is up to the taxpayer whether the business is started as a partnership or company.

In the case of partnership tax rates is lower than that of the company. Another example is, starting a business in a tax-free zone.

A utilitarian, concerned with aggregate welfare, might be willing to tax avoidance. If tax is avoided, wealth is kept in the private sector (which means it will not go to Government ).

The utilitarian says that charging taxes will put more burden on the middle class who cannot afford to hire tax lawyers. The dissatisfaction of the middle class will be more as compared to the satisfaction achieved by the rich class.