Ethics of tax planning

[Berkut]

OK, if I ran a company in some country making chemicals, and it turns out that due to a loophole in the law some nasty chemical by product my plant produces can be legally (and secretly) dumped into the local river, saving my company millions of dollars in costs to dispose of this waste properly, is this ethical if I know that doing so will cause serious damage to the local environment, possibly even death or long term diseases in the local population? It will, eventually, cost billions to clean up once it is realized, but for now, it is clearly perfectly legal, and you won't be on the hook to clean it up in two decades anyway.

For whatever reason, we know for certain that there is absolutely nothing illegal about this -- is it my ethical and fiduciary responsibility to my company and stock holders to go ahead and dump this in order to make them more money, even if the consequences for others is extremely dangerous or costly?

I would argue that even if this is perfectly legal, it is clearly unethical. And I think this exact scenario actually played out many times.

And I see the types of tax evasion taken by Trump the same way. Sure, you can get away with it and pass those costs on to others, but I sure as hell am not going to give you an ATTABOY! for it.

[DGuller]

General question: if legal and ethical are the same thing, why have two different words?

[garbon]

General question: if legal and ethical are the same thing, why have two different words?

Well, I'm not sure that's a good determinant. We've many english words that mean the same thing...or at least degrees of the same thing.

[Valmy]

Well it is perfectly legal to turn those political dissidents over to the state secret police and will certainly make you safer in the long term. Must be ethical to do whatever the KGB tells you.

[Berkut]

A fine example of a company ethically working for the fiduciary responsibility of their owners:

https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire#Consequences_and_legacy

The owners, were acquitted at trial for the murder of their employees, because they "didn't know" the doors were locked. A few hundred people died.

They were found civilly responsible for the deaths, to the tune of $75 per dead employee. They were paid $400 per employee by the insurance company, so bully for them on their fiduciary responsibility to themselves.

They did nothing illegal, and were not punished in any significant way, so I guess we can conclude that they acted ethically when they locked their employees into a 8th floor factory with inadequate fire prevention and burned nearly 150 people alive. Nothing unethical about that! Legal == ethical!

[alfred russel]

And I would argue that that position is basically that there are no possible un-ethical actions at all, and hence the term simply doesn't apply to tax law (or any law I guess) at all. If you can get away with it, or if the cost of not getting away with it is less than the cost of compliance, then it is by your definition "ethical". And since the law itself is arbitrary, then even clearly illegal actions are just as ethical...as long as you can get away with it...

If you were to argue that, I think you would be stupid.

Ethics are about what is morally good and bad, legality is about what is legal. It might be legal to pass by an injured man in a remote area without offering help, but would say it is unethical. There is a clear difference in the words.

Regarding taxes, I think the ethical requirement is to pay what is owed. And what is owed is defined by law.

[alfred russel]

A fine example of a company ethically working for the fiduciary responsibility of their owners:

https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire#Consequences_and_legacy

The owners, were acquitted at trial for the murder of their employees, because they "didn't know" the doors were locked. A few hundred people died.

They were found civilly responsible for the deaths, to the tune of $75 per dead employee. They were paid $400 per employee by the insurance company, so bully for them on their fiduciary responsibility to themselves.

They did nothing illegal, and were not punished in any significant way, so I guess we can conclude that they acted ethically when they locked their employees into a 8th floor factory with inadequate fire prevention and burned nearly 150 people alive. Nothing unethical about that! Legal == ethical!

That is reprehensible Berkut. Logic like this gets atheists a bad rap. Such conduct was highly unethical.

[Oexmelin]

Regarding taxes, I think the ethical requirement is to pay what is owed. And what is owed is defined by law.

What muddies the water is the blurry connection between law, justice, and the community in a Republic, an alchemy that has had taxation as its catalyst since the 18th century.

[Berkut]

A fine example of a company ethically working for the fiduciary responsibility of their owners:

https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire#Consequences_and_legacy

The owners, were acquitted at trial for the murder of their employees, because they "didn't know" the doors were locked. A few hundred people died.

They were found civilly responsible for the deaths, to the tune of $75 per dead employee. They were paid $400 per employee by the insurance company, so bully for them on their fiduciary responsibility to themselves.

They did nothing illegal, and were not punished in any significant way, so I guess we can conclude that they acted ethically when they locked their employees into a 8th floor factory with inadequate fire prevention and burned nearly 150 people alive. Nothing unethical about that! Legal == ethical!

That is reprehensible Berkut. Logic like this gets atheists a bad rap. Such conduct was highly unethical.

<boggle>

Of course it was highly unethical! That is the point!

It was incredibly unethical, yet by the laws of the day was legal. They changed the laws of course afterwards, because they realized that the laws allowed behavior that was grossly unethical and immoral.

The ethics of the behavior exist outside the laws restricting the behavior.

The same is true, albeit with less overtly egregious consequences, when it comes to laws governing taxes, or real estate, or anything.

You cannot hide behind "I broke no law, so it was ethical".

[Valmy]

Well it is perfectly legal to turn those political dissidents over to the state secret police and will certainly make you safer in the long term. Must be ethical to do whatever the KGB tells you.

Ok reflecting on the thread it seems Berkut led me astray here. I think the point was that this principle, legality is ethics, only applies in the narrow world of tax law. I don't agree but that is different from this.

[Valmy]

Regarding taxes, I think the ethical requirement is to pay what is owed. And what is owed is defined by law.

What muddies the water is the blurry connection between law, justice, and the community in a Republic, an alchemy that has had taxation as its catalyst since the 18th century.

Yep. Aren't there ethical considerations as a citizen and/or institution in a Republic with regards to taxation?

[Berkut]

Well it is perfectly legal to turn those political dissidents over to the state secret police and will certainly make you safer in the long term. Must be ethical to do whatever the KGB tells you.

Ok reflecting on the thread it seems Berkut led me astray here. I think the point was that this principle, legality is ethics, only applies in the narrow world of tax law. I don't agree but that is different from this.

In that part I agree with grumbler - there is nothing "special" about tax law that makes it different from other law.

It is perfectly possible, IMO, to engage in unethical behavior in regards to how you go about paying your taxes, even if you manage to keep from being held legally accountable for actually breaking that law.

[CountDeMoney]

Binary my ass. If it was that simple, they wouldn't have entire law firms doing nothing but figuring out how to help the wealthy not pay taxes.

All the more hilarious considering Marti's law firm pretty much does exactly that in Murders & Acquisitions.

[Martinus]

General question: if legal and ethical are the same thing, why have two different words?

They are not in general, but in case of taxes they, ultimately, are, because paying taxes is not an ethical proposition. It is a purely legal obligation.

[alfred russel]

<boggle>

Of course it was highly unethical! That is the point!

It was incredibly unethical, yet by the laws of the day was legal. They changed the laws of course afterwards, because they realized that the laws allowed behavior that was grossly unethical and immoral.

The ethics of the behavior exist outside the laws restricting the behavior.

The same is true, albeit with less overtly egregious consequences, when it comes to laws governing taxes, or real estate, or anything.

You cannot hide behind "I broke no law, so it was ethical".

I understood your point. You apparently did not understand mine.