There has been much discussion about whether government treats benefit cheats relative to tax cheats fairly.
Both set out to worsen the public finances by deception – the one by withholding money due, the other by taking money they are not entitled to. Most of us think they should both be traced and dealt with by the authorities. I see no moral superiority or inferiority in the tax evader over the benefit thief.
For both categories of criminal I think the penalties should usually be financial. Their crime is financial. The reason we do not like their crime is because it leaves the rest of us worse off, as we have to pay for the falsely claimed benefit and make good the shortfall on tax from the evaders. Putting them in prison would mean we will be even worse off, as we will then have to pay to maintain them in prison, and they will not be able to earn to make a contribution. Prison would only be appropriate if there were aggravating factors, like using threats of violence or repeat offences.
There is then the difficult issue of the size of the fine or financial penalty. Clearly the fine a rich tax evader can pay could be a lot larger than the fine a benefit cheat could pay. The benefit cheat should not be expected to pay such a sum that it removed their incentive to go to work and get themselves sorted out financially. The fine a tax evader has to pay should be a penalty rate so that it hurts financially.
The benefit cheat may need assistance to go to work and to pay more of his or her own bills. Getting the balance right is difficult. There should be a penalty for theft, but success surely is getting them to eschew benefit theft in future and to provide more for themselves. We want the taxpayer to pay less for them, not to end up paying more. The tax evader needs a strong warning that cheats do not prosper.Making him pay say twice the amount of tax evaded as a penalty on top of the original bill should hurt. Putting him on to tougher and tighter financial reporting requirements in future would also be a good idea.