Let us begin by analysing the idea of inheritance tax as it represents one of the most contested types of tax (Gaisbauer et al. 2013). Inheritance tax provides a window into fiscal ethics because it is by its very nature embedded in the question of redistribution and common-good considerations. The actual process of inheriting can be reconstructed as follows (Sedmak 2013a)—A inherits x from B:

A standard argument against inheritance tax is often expressed as follows: x is N’s (or B’s) property, based on merits and/or achievements and/or efforts by N-members (or B) and inheritance tax is akin to robbery by an unrelated agent (F). Seen in this light, the key question to be asked is the following: What is the relationship between (“thin”) F and (“thick”) N? (e.g., what is the relationship between “System” and “Life world”, between “group” and “grid”?). There are three possible answers to this one question: (a) F-N are parallel social constellations with occasional points of contact that can (and should perhaps) be minimized or can at least be forged ad libitum; (b) F-N are mutually dependent on each other, thus the relationship is characterized by reciprocity; (c) the relationship F-N is asymmetrical (characterized either by F-predominance or by N-predominance). “N” is a set of personal contacts based on personal acquaintance and face-to-face interactions. N provides special levels of interpersonal trust and trustful relationships with a component of special obligations. N is based on “face-based trust”, that is trust connected with persons in their respective particularity. “F” is a (“thin”) legal, political and social framework based on a type of trust that is formal, institutional and follows the dynamics of “trust in systems”.

The question: “What is the relationship between (‘thin’) F and (‘thick’) N?” can be assumed to be the key question in the justification of any tax. Taxation as a process by which individuals, institutions, and communities are forced to make a contribution, via tax, to the authorities for the administration and development of society refers primarily to the ‘thin’ framework F. F is financed through taxes, i.e. through the compulsory exaction of money by a public authority for public purposes. Two core points of view are fundamental in motivating tax avoidance or even tax evasion: (1) Income is basically self-made and people should be free to support N as a preferential capital-commitment option; (2) Representatives of F will squander the money, and F is not an economically viable way of working with resources. These points relate to issues of trust: (1) either points to a form of self-trust that could be described as unjustified self-trust based on self-deception (see Govier 1993, p. 115 f.), or on the idea that, because of their bonds with N, people are prepared to contribute more capital towards N than towards F—and feel justified in doing so. In other words: greater trust in N than in F justifies a corresponding allocation of resources. (2) points to a culture of suspicion of state authorities; based on such lack of trust in any policies outlining careful and prudential spending, people will justify tax avoidance or even tax evasion by arguing: “I could make better use of the money, even better use for the sake of the common good”.

In the following contribution, we will address this question of the relationship between taxation and trust with special reference to the relationship between thick networks (“N”) and thin frameworks (“F”).

The idea of “self-made” wealth is prominent in debates about the myth of a pre-tax income and the myth of “self-made wealth”, i.e. wealth without framework or community support (Collins et al. 2004). We will examine two examples in this section on the premise that an example transcends the function of mere illustration. Examples can “tell” us something, especially how to close the gap between a rule and its application (Kroß 1999). Examples can serve as “windows into contexts” (cf. Chambers 1984, p. 66 f.). Examples can reject universally held truths and they can pinpoint crucial issues that can be used for further analysis. (Sedmak 2013b, pp. 11–18). In the light of these observations, let us take a look at two examples. In his autobiography (Sugar 2011; abbreviation: SWS) Alan Sugar (Lord Sugar of Clapton) describes his business success in terms of the self-made man: “No one actually started me off” (SWS 84). He describes his childhood as having laid the foundation stone for his ambitions: “My parents did their best, but not being able to have what I wanted made me determined to do something for myself—to be self-sufficient” (SWS 11). He engaged in business activities at an early age, identifying seemingly useless waste in a textile factory as something which could be put to good use elsewhere: “Basically, I’d spotted some stuff in one place and seen another place to sell it. And what’s more, I really enjoyed doing it” (SWS 13). His keen sense of recognizing opportunity made him realize the potential value of old wooden blocks destined to be dumped after street renovation: “Bingo! It occurred to me that these discarded wooden blocks could be made into fire-lightning sticks”; (SWS 15). In addition, Sugar soon proved he had a nose for business, or more precisely, marketing, in the store where he was working part time: “I introduced one of my marketing ideas … When asked by the customer for a bottle of, say, Milk of Magnesia, if you were to reply, ‘Small or large?’ most punters would say, ‘Small’. Much better to ask, ‘Do you want the small 1s 6d one or the extra-value 2s 6d one?’ I applied this to lots of things in the shop … and it worked nine times out of ten”; (SWS 29). Thirdly, apart from a keen sense of opportunity and marketing acumen, he demonstrated the courage to initiate business and accept the risks involved, e.g., by starting up a shampoo production business with Steve Pomeroy and Geoff Salt. “Steve’s family business was lemonade, so they knew where to buy bottles and labels. I could source the ingredients to make the hair lacquer and the shampoo—a soap detergent with a little bit of perfume in it” (SWS 51). Soon he left his government job (much to the disappointment of his father) and became a sales person in electronics. The turning point came when he accidentally spotted some broken TV sets: “I thought of my mate Malcolm, who was a TV Engineer. He could fix the sets and I could flog them. I said, ‘I’ll take them.’” (SWS 74). Here we can clearly see Alan Sugar’s sense of opportunity at work, but we can also see how he found help in realizing opportunity by means of an informal, thick network of friends. He developed a simple business model: you take a discarded, broken item, fix it and then sell it—he followed this model for TV sets then record players and went on to found his own company. When he handed in his notice, his employer warned him: “Let me tell you, you haven’t got very good contacts”, (SWS 83) which plainly indicates the magnitude of the informal and thick network, N. Alan Sugar started up his own brand by putting a label on imported cigarette lighters: “I decided that I would use my own brand name on some products, even though I bought them from an importer”; (SWS 87)—“AMS Trading” was born. Obviously, Alan Sugar owed the possibility for implementing this business strategy to the fact that there were legal provisions in place to make that possible. At some point—here again, we see a personal trait in his inventiveness—Sugar had a break-through idea: “Ann and I visited my mum and dad’s for tea and I noticed they had a plastic butter dish—a red-tinted one. As I lifted the lid up, I saw a moulding mark, known to me now as a sprue mark—the place where the plastic is injected—and in that moment, something clicked in my brain. Here we had a coloured, see-through plastic butter lid, and all I needed to do was to make a similar item but much bigger, also see-through, with a nice grey tint to it” (SWS 107). He ordered a factory to produce the goods and sold them at a high price—“That was it—the start of the big time for me”, (SWS 109). After that he produced amplifiers, where success depended on sourcing the right technicians and managing to get into a mail order catalogue; and finally, he managed to enlarge his network, N, by establishing direct contacts with Japanese business partners. This was the basis for the huge economic success of Alan Sugar’s companies.

What does this story tell us about the relationship between “F” and “N”? (a) Alan Sugar’s capabilities can be identified as key elements in the process of wealth creation (creativity, persistence, flexibility, openness, ability to learn and adapt, and to make and maintain contacts, marketing and sales skills, inventiveness, sense of opportunity). While we do not want to underestimate the importance of those character traits, they alone would not have brought him the business success he experienced without the appropriate environment. We could compare the dynamics at work here with a Wittgensteinian observation on the importance of the appropriate surroundings for meaningful linguistic devices and communicative acts (Wittgenstein 1972, p. 250, 584). Similarly, Alan Sugar could not have developed his skills without the appropriate context; this is not only a developmental statement about the basis of his self-trust but also refers to the flourishing of his capabilities: capability-building is based on informal and structural conditions (cf. Sedmak 2011). (b) N turns out to be a necessary condition in Sugar’s business journey (his parents and friends provide him with a start-up loan, his parents’ flat serves as his first storage space, his friends support him as business partners, business mediators as well as mentors; his friends together with their expertise and contacts are crucial to his success. In other words, Alan Sugar needed social capital to be able to build his business existence. “Social capital”, as a set of social connections based on access to networks, norms, and trust, enables people who control them to pursue their goals more effectively. Social capital consists of trust-based connections with an expectation of reliability and reciprocity (cf. Putnam et al. 1993). Alan Sugar made ample use of his social connections thus investing trust. (c) F can be shown to be a necessary element in Sugar’s success story: (i) Alan Sugar uses both tangible infrastructures (e.g. transportation, communication) and intangible infrastructures (e.g. education, access to credit) to build his business empire. A significant moment in his business life is the miners’ strike in 1972 with the ensuing electricity cuts as a consequence: this taught him a lesson about dependency on a thin framework F. (ii) Sugar operated and still operates in a legally structured space (import and labelling freedom, little quality control mechanisms in place, no price regulation, possibility to hire and fire, possibility to found enterprise with little capital). He could not have started his business on the basis of N alone; without larger structural and infrastructural conditions in place he would not have had the environment and he would not have been able to convert his social capital into any operation, let alone large scale operations.

Alan Sugar’s story is the story of a self-proclaimed “self-made” man whereby a close reading of his autobiography unambiguously reveals a twofold dependence on N and F. Sugar could trust his family and his friends and he could also trust the structural systems (transport, communication, legal system) in place.

A second example could be the rise of the House of Rothschild in the eighteenth and early nineteenth centuries. The economic and social rise of Mayer Amschel Rothschild (1744–1812) was the beginning of the wealth of the House of Rothschild (cf. Ferguson 1998; Backhaus 2012, pp. 80–96; Elon 1996, Chap. 3; Wilson 1988, pp. 38–44). Mayer Amschel Rothschild came from a family of small textile merchants and grew up in Frankfurt’s Judengasse. He learned the basics of commerce in the business of Wolf Jakob Oppenheimer where he worked as an apprentice in Hannover, a position mediated by relatives. After that he started his own business dealing in rare coins. The basis for this branch of business was twofold: expertise in numismatics and social capital, i.e. good contacts with the aristocracy. It was crucial for Rothschild that he won the patronage of Crown Prince William of Hesse (for whom his father had also worked). Access to the Court and gaining the title “Court Factor” in 1770 were major stepping-stones. In the same year, Rothschild entered into a strategic marriage with Gutle Schapper, another Court Factor’s daughter, who provided him not only with access to economic capital but also access to social capital and contacts. Hence, even at this stage, we can see that three factors played a major role in the business success of Mayer Amschel Rothschild: social capital (access to the Court and other strategic social contacts), access to economic capital, and personal skills such as reliability, discretion, learnedness. He was also known for his detailed catalogues and accommodating flexibility in pricing policy. On the basis of these three factors alone, Rothschild was able to enlarge his portfolio and enter the market of antiques. The business expanded and increasingly included established figures of a high social background. The business thus far made Rothschild prosperous, but he was by no means a man of fortune. His major breakthrough was his entering the world of finance through the provision of banking services to Crown Prince Wilhelm. The “smooth” transition took place on well-prepared ground and according to Niall Ferguson’s analysis: “In some ways, the transition was a natural one. An antique-dealer with a growing circle of suppliers and customers naturally would extend credit to some of these”, (Ferguson 1998, p. 45). By 1797 Mayer Amschel Rothschild was definitely well-off. In the throes of the French Revolution, business rapidly expanded, Rothschild handled payments from Britain for the hire of Hessian mercenaries, thus profiting from the war. He built up a position as an international banker to Wilhelm IX and was thus able to gain profitable contracts. In 1798 he sent his son Nathan to England so that Nathan could get first-hand experience of the textile business—this was the first foreign branch of his business. Nathan entered a strategic marriage to the daughter of a leading merchant as well, thus gaining social and economic capital in London. Soon after 1807 Nathan was forced to work illegally, entering the smuggling business: “in October 1807 he was sending a consignment of coffee to Sweden via Amsterdam, using an American registered ship and fake Dutch documents”, (Ferguson 1998, p. 58; see also Morton 1962