Poll
Question:
Assuming it is legal and worth expense and effort, tax planning to reduce tax paid on your income is
Option 1: Reasonable and thus ethical
votes: 10
Option 2: Neither ethical nor unethical
votes: 15
Option 3: Unethical
votes: 14
In light of some things said in the elections thread.
Thread closed in light of some things said in this thread.
Stop trying to kill the thread. <_<
Depends. Are you struggling to feed your family of seven? Then maybe you should be taking advantage of writing off your kids as dependents.
Quote from: Baron von Schtinkenbutt on October 01, 2016, 03:25:41 PM
Stop trying to kill the thread. <_<
Stop being a cunt. It's a stupid fucking poll.
Posters only follow the strong, khaleesi. A mod who cannot lock is no mod.
I am surprised 3 people have voted it is unethical already. :huh:
"Reasonable and thus ethical." Fuck does that even mean.
Quote from: CountDeMoney on October 01, 2016, 04:03:16 PM
"Reasonable and thus ethical." Fuck does that even mean.
Basically, there are systems of ethics where wasting your own resources or not performing at the top of your ability (aka laziness) is considered to be unethical. So if you are wasting your own resources by paying more taxes than you have to, you are behaving unethically.
I wouldn't say its unethical, its just kind of a shitty thing to do. Or as your lord and savior says, it makes you smart.
Hopefully they fix and rewrite the tax code within my lifetime.
Just pay your tax and spend your time on something more rewarding.
Quote from: CountDeMoney on October 01, 2016, 01:27:33 AM
Thread closed in light of some things said in this thread.
I loled.
Quote from: Maladict on October 01, 2016, 04:23:50 PM
Just pay your tax and spend your time on something more rewarding.
Well if you are rich you just hire Marty and then go do something more rewarding.
Nothing wrong with tax planning as long as legal means are used. If you outright lie in the tax return and under-report income, that's not ethical. Otherwise it is fair game.
Quote from: Martinus on October 01, 2016, 04:05:20 PM
Quote from: CountDeMoney on October 01, 2016, 04:03:16 PM
"Reasonable and thus ethical." Fuck does that even mean.
Basically, there are systems of ethics where wasting your own resources or not performing at the top of your ability (aka laziness) is considered to be unethical. So if you are wasting your own resources by paying more taxes than you have to, you are behaving unethically.
Oh, I know what you think it means. Because you're a fucktard.
Damn. Seeds be castrated. Momma vM won't let him take any independent actions.
"Tax planning" seems like a euphemism.
Quote from: garbon on October 01, 2016, 05:21:41 PM
Damn. Seeds be castrated. Momma vM won't let him take any independent actions.
No shit, right? What an asshole.
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.
Quote from: CountDeMoney on October 01, 2016, 07:10:29 PM
Quote from: garbon on October 01, 2016, 05:21:41 PM
Damn. Seeds be castrated. Momma vM won't let him take any independent actions.
No shit, right? What an asshole.
As he keeps doing it for Marti, perhaps he just wants to get his concrete up in that.
Quote from: alfred russel on October 01, 2016, 07:23:14 PM
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.
Of course.
However, there is a point at which tax evasion becomes ethically suspect.
And if you claim to be one of the richest men in America, while at the same time don't actually pay taxes, it is a safe bet that while you might be strictly legal, you are very likely well beyond the level of ethical.
More importantly, it puts your plan of reducing taxes on people like you even more into a very different light than otherwise.
Unethical, but given the burden it can place on lower incomes, it does also beg the question of how ethical our current tax structure is. No vote because none of the options allow for that level of nuance (unethical, but necessary to deal with an already-unethical system).
Quote from: Berkut on October 01, 2016, 08:11:07 PM
Quote from: alfred russel on October 01, 2016, 07:23:14 PM
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.
Of course.
However, there is a point at which tax evasion becomes ethically suspect.
And if you claim to be one of the richest men in America, while at the same time don't actually pay taxes, it is a safe bet that while you might be strictly legal, you are very likely well beyond the level of ethical.
More importantly, it puts your plan of reducing taxes on people like you even more into a very different light than otherwise.
I think your post is a bit of a logical muddle.
-You agree that people can arrange affairs to be as low as possible
-You toss in the concept of tax evasion, which is a crime, and associate it with unethical behavior
-Then you come back to the idea that the idea that a man's tax arrangements might be strictly legal, which by definition means it is not tax evasion
-Then you connect the potentially legal nonpayment of taxes with the illegal behavior you considered unethical
Then on top of that you connect it to a public policy position, for which I don't see a connection.
For example, I don't think the home mortgage interest deduction is sound public policy, but if you think that means I'm unethical because I take advantage of it, I think you are being nonsensical.
Contextually unethical, in that all of Trump's assets should be seized. And then his body should be placed in a big centrifuge and separated into its raw materials, which should then be sold on the open market with the proceeds redistributed equally among the population.
Quote from: Grinning_Colossus on October 01, 2016, 11:42:29 PM
Contextually unethical, in that all of Trump's assets should be seized. And then his body should be placed in a big centrifuge and separated into its raw materials, which should then be sold on the open market with the proceeds redistributed equally among the population.
Certainly the raw materials that constitute his body were not illicitly obtained, and should therefore transfer to his family.
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
I don't know. Pretending you are a company from the Cayman Islands when you are not seems a bit unethical. Not sure if that is covered under the 'fraud' thing though.
To fail to plan is to plan to fail.
Quote from: Valmy on October 02, 2016, 01:14:13 AM
I don't know. Pretending you are a company from the Cayman Islands when you are not seems a bit unethical. Not sure if that is covered under the 'fraud' thing though.
It depends what you mean by "pretending you are a company". If you lie e.g. by saying your management sits in the Cayman Islands etc. then it is a fraud. But if you just set up a vehicle to benefit from better tax treatment without lying, then why should it be unethical? Blame legislators for allowing that to happen legally.
Tax rules are technical rules, there is no inherent ethics to them (and there is nothing ethical about paying more taxes than you have to). It's like rules for driving on the road. If the legislators set up a rule that, if you are coming from the right side at an intersection, you have right of way before someone who comes from the left, then it would be bizarre to argue that you should nonetheless not use that right of way and that letting someone coming from the left side go first is somehow more ethical.
I find it reasonable to set up your affairs in a way to pay the least legal amount of taxes. Tax advisory is a normal profession here.
I don't see how that would be unethical as long as you only use legal means.
A lot of policy making here also revolves around tax breaks for certain behavior the state wants to support. So it is well published how you need to e.g. save money for retirement in the most tax friendly way.
That said corporate tax avoidance through complicated shell firms etc. doesn't seem to serve any societal purpose and I would not mind seeing it reduced. Go Vestager!
Quote from: Zanza on October 02, 2016, 03:19:39 AM
I find it reasonable to set up your affairs in a way to pay the least legal amount of taxes. Tax advisory is a normal profession here.
I don't see how that would be unethical as long as you only use legal means.
A lot of policy making here also revolves around tax breaks for certain behavior the state wants to support. So it is well published how you need to e.g. save money for retirement in the most tax friendly way.
That said corporate tax avoidance through complicated shell firms etc. doesn't seem to serve any societal purpose and I would not mind seeing it reduced. Go Vestager!
I agree - I think a lot of it needs a reform. But I don't believe you can hold it against a businessman that he or she uses legally available ways of reducing the taxes.
Exploiting negligence of mentally undeveloped individuals is indeed unethical, but I don't believe this should include the state.
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
I'm strongly in favour of various tax loopholes being closed. However, the onus can hardly be on the taxpayer to divine the intent of legislators when they produced their (perhaps badly-written) tax codes. It is either legal or it isn't, a simple binary position.
Quote from: Zanza on October 02, 2016, 03:19:39 AM
I find it reasonable to set up your affairs in a way to pay the least legal amount of taxes. Tax advisory is a normal profession here.
I don't see how that would be unethical as long as you only use legal means.
A lot of policy making here also revolves around tax breaks for certain behavior the state wants to support. So it is well published how you need to e.g. save money for retirement in the most tax friendly way.
That said corporate tax avoidance through complicated shell firms etc. doesn't seem to serve any societal purpose and I would not mind seeing it reduced. Go Vestager!
100% agree.
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
Few legal systems list all the things you may do.
Quote from: CountDeMoney on October 01, 2016, 01:27:33 AM
Thread closed in light of some things said in this thread.
This is the CdM we know and love.
As to the question, it is not tax planning that is unethical but a tax structure which allows the most wealthy to pay the least in tax probably is.
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
Quote from: Martinus on October 02, 2016, 09:15:43 AM
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
I assume he is referring to the fact that there is often a fine line between effective tax planning and non compliant structures. Of such things tax litigators make their living.
I grab everything not nailed down.
Quote from: Ed Anger on October 02, 2016, 09:30:49 AM
I grab everything not nailed down.
Note to self:
* nail everything down.
* purchase more nails.
Ed's already nailed everything that moves.
Quote from: CountDeMoney on October 02, 2016, 09:38:38 AM
Ed's already nailed everything that moves.
I imagine that there's a dead zone around Casa Ed similar to the forests around Chernobyl.
Quote from: CountDeMoney on October 02, 2016, 09:38:38 AM
Ed's already nailed everything that moves.
My avatar says it all.
And a cheetos like complexion.
Quote from: Hamilcar on October 02, 2016, 09:39:26 AM
Quote from: CountDeMoney on October 02, 2016, 09:38:38 AM
Ed's already nailed everything that moves.
I imagine that there's a dead zone around Casa Ed similar to the forests around Chernobyl.
Wildlife is thriving. :)
Thank you.
Also,this thread was raped and left behind a dumpster.
It's not unethical, unless you had a hand in influencing the system to make it easier to abuse, but it is unfortunate. It is unreasonable to expect people to counter bad policy with individual sacrifice.
That said, my view of tax planners who specialize in tax avoidance schemes is similar to my view of the tobacco marketing people. It's not illegal to do that job, and someone will probably do it, but you are still a disgusting human being who deserves the worst kind of karma for being the one to do it.
Quote from: crazy canuck on October 02, 2016, 09:21:37 AM
Quote from: Martinus on October 02, 2016, 09:15:43 AM
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
I assume he is referring to the fact that there is often a fine line between effective tax planning and non compliant structures. Of such things tax litigators make their living.
Yeah but that the latter would be illegal, wouldn't they?
I also believe that laymen like him do not appreciate the amount of intellectual effort that goes into developing an effective tax structure. I mean, in what other industry it is unethical to use an idea unless it is "clearly highlighted and well known"? All innovation and development is based on coming up with ideas nobody else has thought of. It does not make them "shady".
Quote from: DGuller on October 02, 2016, 09:56:32 AM
It's not unethical, unless you had a hand in influencing the system to make it easier to abuse, but it is unfortunate. It is unreasonable to expect people to counter bad policy with individual sacrifice.
That said, my view of tax planners who specialize in tax avoidance schemes is similar to my view of the tobacco marketing people. It's not illegal to do that job, and someone will probably do it, but you are still a disgusting human being who deserves the worst kind of karma for being the one to do it.
I disagree. Tobacco marketing actually leads to deaths. I don't think you can see it as equivalent to tax planning.
Hunting for example is to me much much worse than tax planning.
Quote from: Martinus on October 02, 2016, 09:59:56 AM
Quote from: DGuller on October 02, 2016, 09:56:32 AM
It's not unethical, unless you had a hand in influencing the system to make it easier to abuse, but it is unfortunate. It is unreasonable to expect people to counter bad policy with individual sacrifice.
That said, my view of tax planners who specialize in tax avoidance schemes is similar to my view of the tobacco marketing people. It's not illegal to do that job, and someone will probably do it, but you are still a disgusting human being who deserves the worst kind of karma for being the one to do it.
I disagree. Tobacco marketing actually leads to deaths. I don't think you can see it as equivalent to tax planning.
Hunting for example is to me much much worse than tax planning.
Hunting has accidents just like almost all human activities. BFD.
Quote from: Ed Anger on October 02, 2016, 09:52:01 AM
Thank you.
Also,this thread was raped and left behind a dumpster.
Blame Concrete Boy.
Quote from: Martinus on October 02, 2016, 09:57:59 AM
Quote from: crazy canuck on October 02, 2016, 09:21:37 AM
Quote from: Martinus on October 02, 2016, 09:15:43 AM
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
I assume he is referring to the fact that there is often a fine line between effective tax planning and non compliant structures. Of such things tax litigators make their living.
Yeah but that the latter would be illegal, wouldn't they?
I also believe that laymen like him do not appreciate the amount of intellectual effort that goes into developing an effective tax structure. I mean, in what other industry it is unethical to use an idea unless it is "clearly highlighted and well known"? All innovation and development is based on coming up with ideas nobody else has thought of. It does not make them "shady".
No, it is only illegal if the intent was tax evasion. He was talking about shady dealings. Exactly the sort of thing that is taking up the kind of intellectual effort you referred to - how close to the line can one come by exploiting the tax code. And how well can your lawyers defend against the tax authority when the structure is challenged. I don't think "laymen" are particularly far off when they view the whole thing with some skepticism.
Dorsey: does US global taxation of US citizens and residents apply to earned and unearned income, or just earned?
Quote from: Admiral Yi on October 02, 2016, 01:08:10 PM
Dorsey: does US global taxation of US citizens and residents apply to earned and unearned income, or just earned?
I am pretty sure the reporting requirements are extensive. It's extremely difficult for Americans in Switzerland to even open a bank account. The banks require total and ongoing proof of tax compliance.
So what have we learnt from this thread?
Marty apparently does tax avoidance/evasion for Hami and the proceeds are siphoned through some Icelandic banks belonging to Legbiter's relatives.
Quote from: Admiral Yi on October 02, 2016, 01:08:10 PM
Dorsey: does US global taxation of US citizens and residents apply to earned and unearned income, or just earned?
I know you prefer not to respond to my posts but the US taxes on all income.
Quote from: Martinus on October 02, 2016, 09:57:59 AM
Quote from: crazy canuck on October 02, 2016, 09:21:37 AM
Quote from: Martinus on October 02, 2016, 09:15:43 AM
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
I assume he is referring to the fact that there is often a fine line between effective tax planning and non compliant structures. Of such things tax litigators make their living.
Yeah but that the latter would be illegal, wouldn't they?
I also believe that laymen like him do not appreciate the amount of intellectual effort that goes into developing an effective tax structure. I mean, in what other industry it is unethical to use an idea unless it is "clearly highlighted and well known"? All innovation and development is based on coming up with ideas nobody else has thought of. It does not make them "shady".
Hi Grumbler.
Quote from: DontSayBanana on October 01, 2016, 09:28:13 PM
Unethical, but given the burden it can place on lower incomes, it does also beg the question of how ethical our current tax structure is. No vote because none of the options allow for that level of nuance (unethical, but necessary to deal with an already-unethical system).
No, it doesn't "beg the question" at all. Your answer begs the question of how unethical the current tax structure is.
Quote from: Tyr on October 02, 2016, 03:11:44 PM
Quote from: Martinus on October 02, 2016, 09:57:59 AM
Quote from: crazy canuck on October 02, 2016, 09:21:37 AM
Quote from: Martinus on October 02, 2016, 09:15:43 AM
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
I assume he is referring to the fact that there is often a fine line between effective tax planning and non compliant structures. Of such things tax litigators make their living.
Yeah but that the latter would be illegal, wouldn't they?
I also believe that laymen like him do not appreciate the amount of intellectual effort that goes into developing an effective tax structure. I mean, in what other industry it is unethical to use an idea unless it is "clearly highlighted and well known"? All innovation and development is based on coming up with ideas nobody else has thought of. It does not make them "shady".
Hi Grumbler.
Hi, Raz!
This begs the question: what does begging the question actually mean?
Quote from: crazy canuck on October 02, 2016, 02:54:27 PM
Quote from: Admiral Yi on October 02, 2016, 01:08:10 PM
Dorsey: does US global taxation of US citizens and residents apply to earned and unearned income, or just earned?
I know you prefer not to respond to my posts but the US taxes on all income.
It does, although the first $80k or so of earned taxable income is deductible, and you get a tax credit for any foreign taxes paid.
Quote from: grumbler on October 02, 2016, 08:21:49 PM
Quote from: Tyr on October 02, 2016, 03:11:44 PM
Quote from: Martinus on October 02, 2016, 09:57:59 AM
Quote from: crazy canuck on October 02, 2016, 09:21:37 AM
Quote from: Martinus on October 02, 2016, 09:15:43 AM
Quote from: Tyr on October 02, 2016, 04:11:57 AM
"Legally available" how?
It's there and clearly highlighted and well known, designed to b a way to reduce taxes for valid reasons?
Or it's a shady loop hole that requires jumping through a bunch of hoops that nobody would ever use for legitimate reasons?
This type of response shows a fundamental misunderstanding of how tax planning works.
What's a "shady loop hole"?
I assume he is referring to the fact that there is often a fine line between effective tax planning and non compliant structures. Of such things tax litigators make their living.
Yeah but that the latter would be illegal, wouldn't they?
I also believe that laymen like him do not appreciate the amount of intellectual effort that goes into developing an effective tax structure. I mean, in what other industry it is unethical to use an idea unless it is "clearly highlighted and well known"? All innovation and development is based on coming up with ideas nobody else has thought of. It does not make them "shady".
Hi Grumbler.
Hi, Raz!
So have you stopped ignoring me and are just confused or what?
It's funny because you are clearly more like grumbler and Tyr more like Marty.
Quote from: Martinus on October 02, 2016, 01:07:24 AM
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Quote from: Berkut on October 02, 2016, 11:35:22 PM
Quote from: Martinus on October 02, 2016, 01:07:24 AM
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Being able to get away with something doesn't make it legal.
I voted option 2 because taxes are not in the ethical realm. You pay them because you have to. Paying them does not make you good and avoiding them does not make you bad.
Quote from: Berkut on October 02, 2016, 11:35:22 PM
Quote from: Martinus on October 02, 2016, 01:07:24 AM
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Legality is really a binary situation. Either something is legal or it isn't. And the idea of tax advisors "assuring" people something is legal, when there is a chance it isn't, is largely a myth - they have too much skin in the game if they get it wrong.
Quote from: MadImmortalMan on October 03, 2016, 03:12:59 AM
I voted option 2 because taxes are not in the ethical realm. You pay them because you have to. Paying them does not make you good and avoiding them does not make you bad.
They kind of are. Taxes are how society pitches in to get things done that are in common interests. Someone who avoids taxes via loopholes or worse is shirking the arrangement.
Quote from: Martinus on October 03, 2016, 03:18:28 AM
Quote from: Berkut on October 02, 2016, 11:35:22 PM
Quote from: Martinus on October 02, 2016, 01:07:24 AM
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Legality is really a binary situation. Either something is legal or it isn't. And the idea of tax advisors "assuring" people something is legal, when there is a chance it isn't, is largely a myth - they have too much skin in the game if they get it wrong.
Bullshit.
There is a huge grey area in what is and is not strictly kosher when it comes to taxes. I know this because I myself am often wondering what I can and can not write off, and I suspect that when it comes to people with millions at stake, the "skin in the game" is all about the risk of a fine or penalty versus the reward of current value of cash in your pocket.
It is not at all binary, and a tax advisors job is to figure out how to skirt the line as best they can without the projected cost of an audit and fine becoming greater than the potential tax savings.
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.
Quote from: dps on October 03, 2016, 02:53:41 AM
Quote from: Berkut on October 02, 2016, 11:35:22 PM
Quote from: Martinus on October 02, 2016, 01:07:24 AM
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Being able to get away with something doesn't make it legal.
Indeed. But I suspect that when it comes to taxes, the wealthy drive their practices based mostly on what they can get away with, rather than any rigorous attempt to meet the letter and spirit of the law.
Just like all of us, of course - except that the non-rich don't have nearly the same resource to devote to the problem, or the mechanism by which our pathetic income and wealth can be hidden and sheltered.
Quote from: Martinus on October 03, 2016, 03:18:28 AM
Quote from: Berkut on October 02, 2016, 11:35:22 PM
Quote from: Martinus on October 02, 2016, 01:07:24 AM
Where I differ from Berkut is that when dealing with the state treasury/tax collection apparatus there is, imo, no area which can be described as "legal but unethical" (which is obviously different from dealing with individuals, where such area exists). If you obey the law (which means also that you are committing no fraud), you are not - and should not - be accused of any unethical activity if you seek to reduce your taxation.
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Legality is really a binary situation. Either something is legal or it isn't.
I'm honestly flabbergasted that a lawyer at a big international firm could have written this.
Quote from: Berkut on October 02, 2016, 11:35:22 PM
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Speaking for major corporations, I think the idea of tax advisors pitching illegal structures is more myth than reality. Working on the edge of the tax world and spending lots of time with tax attorneys, what I see is this:
-unlike personal returns, major corporations are often under continuous audit, so the question of an auditor looking at something is very high
-even if an auditor doesn't find something, there are signficant whistleblower benefits, including IRS bounties, that can turn a whistleblower into a multimillionaire
-the incentive to do something illegal is lower than you might think--if caught destroy your career and possibly go to jail, versus a windfall going to your employer?
-the tax code has lots of ambiguities, to the extent that outright illegal activity tends to be an issue far less than a topic of multiyear litigation regarding whether the corporate taxpayer underpaid.
Quote from: DGuller on October 03, 2016, 07:06:16 AM
They kind of are. Taxes are how society pitches in to get things done that are in common interests. Someone who avoids taxes via loopholes or worse is shirking the arrangement.
But what is a loophole?
When I was in public accounting, I audited (financial not tax) a publicly traded company that made paper and packaging products.
An environmental bill was passed at that time, that gave generous tax benefits to companies that used organic materials and recycling in manufacturing processes. It turned out that the law was worded in a way that certain normal paper and packaging processes could get the benefit, and the effect on tax revenues was in the billions. It was, imo, a classic loophole--there was no public policy purpose for this to apply to the existing industry.
There were a couple theories I heard why the "loophole" for paper and packaging companies came about:
1) Congress made amendments to the bill at the last minute, and fucked up.
2) A lobbyist for the industry with a sympathetic congressman got language into the bill at the last minute and know one noticed.
Either way, the company I audited took advantage as did the rest of the industry. On conference calls, the CEO said, "hey, this is not going to last forever, eventually congress will cut this off."
And for a few years congress did nothing. It eventually got closed as a part of Obamacare - it was one of the tax loopholes closed to provide additional revenue to offset the cost of the bill. The cynical part of me wonders if congress didn't let it sit out there as a kind of piggybank to pay for a future spending program like obamacare.
I don't think the company i audited did anything unethical. In fact, management probably had no choice. All their competitors were taking advantage, and I suspect investors would have pushed for a management change had they decided not to take advantage.
Quote from: alfred russel on October 03, 2016, 09:26:23 AM
Quote from: Berkut on October 02, 2016, 11:35:22 PM
WHat about something that is possibly illegal, or even certainly illegal, but your tax advisor assures you that you can get away with it?
Speaking for major corporations, I think the idea of tax advisors pitching illegal structures is more myth than reality. Working on the edge of the tax world and spending lots of time with tax attorneys, what I see is this:
-unlike personal returns, major corporations are often under continuous audit, so the question of an auditor looking at something is very high
-even if an auditor doesn't find something, there are signficant whistleblower benefits, including IRS bounties, that can turn a whistleblower into a multimillionaire
-the incentive to do something illegal is lower than you might think--if caught destroy your career and possibly go to jail, versus a windfall going to your employer?
-the tax code has lots of ambiguities, to the extent that outright illegal activity tends to be an issue far less than a topic of multiyear litigation regarding whether the corporate taxpayer underpaid.
I think the last bit is the key - there are a lot of ambiguities, and hence a lot of stuff that is technically legal while clearly being outside the intent of the law, and hence rich ground for tax lawyers to save their clients millions.
And if you get audited? So what - like you said, these guys are under audit pretty much all the time anyway.
It's "ambiguous" after all! So we were not breaking the law, we thought that was perfectly fine! Indeed, we still do! Let's fight about it in court for the next five years! And if we lose, we will pay the tax we were supposed to pay along with a fine a decade later, and so what - we got to keep all that money and invest it for the decade!
This is the point though - tax law is complicated, so of course it is open to "interpretation". Hence the idea that anything you can get away with is by definition not just legal but actually ethical? It takes a pretty mercenary view of the word "ethics" to come to that conclusion.
Not that business people like Trump give two shits about ethics anyway.
The complicated thing about ethics is that bad systems can force you into unethical behaviors. Doping is unethical, but in 2000's in cycling you would have no future without it.
Quote from: alfred russel on October 03, 2016, 09:40:17 AM
Quote from: DGuller on October 03, 2016, 07:06:16 AM
They kind of are. Taxes are how society pitches in to get things done that are in common interests. Someone who avoids taxes via loopholes or worse is shirking the arrangement.
But what is a loophole?
When I was in public accounting, I audited (financial not tax) a publicly traded company that made paper and packaging products.
An environmental bill was passed at that time, that gave generous tax benefits to companies that used organic materials and recycling in manufacturing processes. It turned out that the law was worded in a way that certain normal paper and packaging processes could get the benefit, and the effect on tax revenues was in the billions. It was, imo, a classic loophole--there was no public policy purpose for this to apply to the existing industry.
There were a couple theories I heard why the "loophole" for paper and packaging companies came about:
1) Congress made amendments to the bill at the last minute, and fucked up.
2) A lobbyist for the industry with a sympathetic congressman got language into the bill at the last minute and know one noticed.
Either way, the company I audited took advantage as did the rest of the industry. On conference calls, the CEO said, "hey, this is not going to last forever, eventually congress will cut this off."
And for a few years congress did nothing. It eventually got closed as a part of Obamacare - it was one of the tax loopholes closed to provide additional revenue to offset the cost of the bill. The cynical part of me wonders if congress didn't let it sit out there as a kind of piggybank to pay for a future spending program like obamacare.
I don't think the company i audited did anything unethical. In fact, management probably had no choice. All their competitors were taking advantage, and I suspect investors would have pushed for a management change had they decided not to take advantage.
Yeah, "everyone is doing it" is the best defense to an accusation that you might be doing something unethical.
Second only to "I had no choice! They would have fired me!"
Quote from: DGuller on October 03, 2016, 09:49:47 AM
The complicated thing about ethics is that bad systems can force you into unethical behaviors. Doping is unethical, but in 2000's in cycling you would have no future without it.
Ahhh, finally someone gets it!
Indeed - and doping is a great example.
But the system forcing you into acting unethically doesn't suddenly make the action ethical.
If some cyclist had stood up and said "I am quitting cycling because I am not willing to make the personal compromises with my integrity necessary to compete" we would not sit around and call them a fool - in fact, we would call them a paragon of ethics.
Indeed, the very best example of integrity and ethics is when your stance actually costs you something. Ethics without a cost are shallow indeed.
It's not always that simple. Sometimes taking a stand is an act of suicide with nothing good coming from it.
Quote from: Berkut on October 03, 2016, 09:50:41 AM
Yeah, "everyone is doing it" is the best defense to an accusation that you might be doing something unethical.
Second only to "I had no choice! They would have fired me!"
Why is it unethical to take advantage of a tax code that makes it possible to pay less taxes through a bizarre provision?
Quote from: DGuller on October 03, 2016, 09:57:36 AM
It's not always that simple. Sometimes taking a stand is an act of suicide with nothing good coming from it.
In which case you should not do it, and that would be understandable.
But it doesn't make it ethical to do something you know is wrong.
And there is a big difference between doing something in order to avoid harm, and doing something that will help you...
Of course it isn't "simple" though - who ever said ethics were simple?
Quote from: alfred russel on October 03, 2016, 10:11:14 AM
Quote from: Berkut on October 03, 2016, 09:50:41 AM
Yeah, "everyone is doing it" is the best defense to an accusation that you might be doing something unethical.
Second only to "I had no choice! They would have fired me!"
Why is it unethical to take advantage of a tax code that makes it possible to pay less taxes through a bizarre provision?
If you cannot even imagine why that *might* be unethical, then I don't think there is anything I can possibly say that would matter.
You simply don't understand what the term means in any meaningful sense.
Going back to my original example if you claim you are headquartered in the Cayman Islands but you are, in practical fact, headquartered in Frankfurt it seems to me you are gaining all the advantages of being in Frankfurt while not having to pay for it like everybody else does. Strikes me as unethical and a bit like stealing, even if not technically illegal. But I don't know how all these weird shell company gymnastics works.
I don't think some in this discussion (Berkut, for example) have really thought through what the concept of "ethical" means. For him, and others, "unethical" seems to mean "outrages me" and ethical means "does not outrage me."
The ethics of running a business are different from the ethics of writing posts to an online forum. A corporation officer has a fiduciary responsibility to act in the best interests of corporate owners, so the officer that deliberately forgoes taking advantage of tax breaks due the corporation under the law, because the officer believes that these tax breaks were not intended by the legislators writing the law, is acting unethically.
There are lots of unethical behaviors related to taxation, but taking advantage of tax breaks is not one of them. Like all matters regarding the law, there are going to be grey areas, because law drafting/enactment is never perfect. Tax laws are nothing special in this regard, though.
Quote from: Berkut on October 03, 2016, 10:16:28 AM
Quote from: alfred russel on October 03, 2016, 10:11:14 AM
Quote from: Berkut on October 03, 2016, 09:50:41 AM
Yeah, "everyone is doing it" is the best defense to an accusation that you might be doing something unethical.
Second only to "I had no choice! They would have fired me!"
Why is it unethical to take advantage of a tax code that makes it possible to pay less taxes through a bizarre provision?
If you cannot even imagine why that *might* be unethical, then I don't think there is anything I can possibly say that would matter.
You simply don't understand what the term means in any meaningful sense.
One of you doesn't.....
Quote from: grumbler on October 03, 2016, 10:19:16 AM
I don't think some in this discussion (Berkut, for example) have really thought through what the concept of "ethical" means. For him, and others, "unethical" seems to mean "outrages me" and ethical means "does not outrage me."
You've nailed my entire argument perfectly.
Quote from: Berkut on October 03, 2016, 10:21:35 AM
You've nailed my entire argument perfectly.
Thanks. It wasn't hard.
Quote from: Berkut on October 03, 2016, 09:48:50 AM
It's "ambiguous" after all! So we were not breaking the law, we thought that was perfectly fine! Indeed, we still do! Let's fight about it in court for the next five years! And if we lose, we will pay the tax we were supposed to pay along with a fine a decade later, and so what - we got to keep all that money and invest it for the decade!
I don't think that is the attitude of most companies. Fighting in court for five years and then paying interest and penalties is an expensive proposition. Also, losing cases (or even winning them) can be bad publicity.
The publicity thing is actually quite important. I've heard tax attorneys say that the IRS is more aggressive with companies more sensitive to bad publicity, as they know they will be more likely to settle cases that are contestable before they hit the papers.
Quote
This is the point though - tax law is complicated, so of course it is open to "interpretation". Hence the idea that anything you can get away with is by definition not just legal but actually ethical? It takes a pretty mercenary view of the word "ethics" to come to that conclusion.
Not that business people like Trump give two shits about ethics anyway.
I'd say that any legal and sustainable tax position is ethical by definition. The tax code is completely arbitrary. If we are talking about corporate taxes, even the existence of corporations is just a legal fiction.
Quote from: alfred russel on October 03, 2016, 10:31:18 AM
Quote from: Berkut on October 03, 2016, 09:48:50 AM
It's "ambiguous" after all! So we were not breaking the law, we thought that was perfectly fine! Indeed, we still do! Let's fight about it in court for the next five years! And if we lose, we will pay the tax we were supposed to pay along with a fine a decade later, and so what - we got to keep all that money and invest it for the decade!
I don't think that is the attitude of most companies. Fighting in court for five years and then paying interest and penalties is an expensive proposition. Also, losing cases (or even winning them) can be bad publicity.
That just goes into the cost-benefit analysis though. If the publicity isn't a concern, or the costs of litigating are less than the cost of paying the taxes, then it makes business sense to go ahead and not pay them.
This is the same argument made for why some car company might decide it isn't worth the cost to fix some defective part that is going to kill some people. Maybe they are wrong about that publicity cost, but I would argue that if you decide to leave the defect and accept the lawsuits because your analysis says that even with the publicity it is simply cheaper than fixing it that is NOT ethical.
Indeed, the reason they get the bad publicity is because the public innately understands that it is unethical.
Quote
The publicity thing is actually quite important. I've heard tax attorneys say that the IRS is more aggressive with companies more sensitive to bad publicity, as they know they will be more likely to settle cases that are contestable before they hit the papers.
I don't doubt it - but bad publicity is, at the end of the day, just another financial cost. You bear it if it is worth it, and you don't otherwise.
Quote
Quote
This is the point though - tax law is complicated, so of course it is open to "interpretation". Hence the idea that anything you can get away with is by definition not just legal but actually ethical? It takes a pretty mercenary view of the word "ethics" to come to that conclusion.
Not that business people like Trump give two shits about ethics anyway.
I'd say that any legal and sustainable tax position is ethical by definition. The tax code is completely arbitrary. If we are talking about corporate taxes, even the existence of corporations is just a legal fiction.
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...
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.
General question: if legal and ethical are the same thing, why have two different words?
Quote from: DGuller on October 03, 2016, 11:13:06 AM
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.
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.
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!
Quote from: Berkut on October 03, 2016, 10:39:38 AM
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.
Quote from: Berkut on October 03, 2016, 12:00:53 PM
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.
Quote from: alfred russel on October 03, 2016, 12:05:51 PM
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.
Quote from: alfred russel on October 03, 2016, 12:07:13 PM
Quote from: Berkut on October 03, 2016, 12:00:53 PM
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".
Quote from: Valmy on October 03, 2016, 11:29:29 AM
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.
Quote from: Oexmelin on October 03, 2016, 12:09:25 PM
Quote from: alfred russel on October 03, 2016, 12:05:51 PM
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?
Quote from: Valmy on October 03, 2016, 12:43:04 PM
Quote from: Valmy on October 03, 2016, 11:29:29 AM
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.
Quote from: Berkut on October 03, 2016, 08:03:20 AM
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.
Quote from: DGuller on October 03, 2016, 11:13:06 AM
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.
Quote from: Berkut on October 03, 2016, 12:38:10 PM
<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.
Quote from: Berkut on October 03, 2016, 12:00:53 PM
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!
It's a strawman. Nobody here is arguing that any legal action is ethical.
However, the obligation to pay taxes does not exist outside of law - it is defined exhaustively by what the law says it is (or have you ever paid more sales or VAT tax at a store than was required?).
Quote from: CountDeMoney on October 03, 2016, 01:19:35 PM
Quote from: Berkut on October 03, 2016, 08:03:20 AM
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.
Only because something is not obvious to a layman it does not mean it is not binary.
There are many things we do not know yet about the universe, and which require considerable research to determine. It does not mean there is no objective truth either.
Quote from: Martinus on October 03, 2016, 01:39:38 PM
Quote from: Berkut on October 03, 2016, 12:00:53 PM
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!
It's a strawman. Nobody here is arguing that any legal action is ethical.
However, the obligation to pay taxes does not exist outside of law - it is defined exhaustively by what the law says it is (or have you ever paid more sales or VAT tax at a store than was required?).
The obligation to pay for your share of shared resources most certainly does exist outside of the law, and taxes are simply a means to collect on that shared obligation.
The obligation to not steal exists outside the law as well, even though we have laws that cover stealing.
Paying taxes is not some special set of legal obligations different from all others. Tax law is simply those laws that lay out how we collect from each other in order to sustain the public and shared good that we as a social creatures have decided is needed.
It is not some special category of law that gets exempted from ethical consideration.
Not really. There is no obligation to pay taxes outside of a legal system.
Quote from: Valmy on October 03, 2016, 12:43:04 PM
Quote from: Valmy on October 03, 2016, 11:29:29 AM
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.
I think that there's an important distinction here between things that might be called "natural" crimes--things like rape, murder, robbery, etc. that most people would consider "wrong" even if there were no laws against them; and what might be called "status" offenses--things that aren't necessarilly considered morally wrong
per se, but which are criminal acts because there are laws against them--truancy, jaywalking, etc. Of course, things aren't always completely clear-cut--for example, some people consider the consumption of alcohol immoral, some don't; and among those who don't, there's room for a lot of different ideas about minors consuming alcohol. Berkut, I think, is in effect arguing that income tax evasion is inherently morally wrong, i.e., unethical (though he probably wouldn't put it quite that way, and may very well take exception to my interpretation of his position), while a r is arguing that tax avoidance is perfectly legal and therefore ethical.
Both are at least partly wrong, IMO. Berkut is wrong because, taken at face value, he appears at least to be disregarding the difference between income tax avoidance and income tax evasion. (He also may be classifying income tax evasion as a "natural" crime instead of a "status" offense, and I'm not sure where I stand on that.) Alfred russell is wrong because he seems to be ignoring Berkut's point that the line between avoidance and evasion is not particularly clear. Maybe "wrong" isn't exactly the correct term here--I think mostly they're discussing two different points and talking past each other.
EDIT: and of course Berkut addresses some of my points while I was typing.
re: dps
It certainly is a spectrum, of course.
Tax avoidance certainly is not un-ethical of course, at least not in theory, since we structure our tax codes in order to actually encourage behavior. How could it be unethical to engage in behavior we as a society have decided we want to encourage?
But there is a line, and of course it is a blurry line. But there is some point at which you are basically just shirking your responsibility to society to pay a reasonable share by exploiting loopholes and the structure of the rules intended to make the system as fair and un-onerous as possible to actual evade paying taxes.
What annoys me about this is that people like Trump will bitch and moan about the Laffer curve, and demand that they get special dispensations, and then when they get them, turn around and exploit them in order to pay even less - which just makes us more inclined to ditching the complexity altogether.
I'm not aware of any ethical requirement to maximize government revenue.
Quote from: Berkut on October 03, 2016, 12:38:10 PM
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.
As even your source shows, this statement is untrue. The behavior was illegal even by the laws of the day, which is why the owners went to trial.
I'm not sure why you are riding this bombastic position (that it is unethical for companies to pay only such taxes as the law requires) down in flames, but good luck with that. try using better examples to avoid that singed feeling.
Quote from: dps on October 03, 2016, 02:01:15 PM
Alfred russell is wrong because he seems to be ignoring Berkut's point that the line between avoidance and evasion is not particularly clear.
Berkut is in part arguing that certain legal tax positions are unethical. I'm disputing that. and that alone.
I dispute your statement that I become wrong by limiting the scope of my argument.
Quote from: The Brain on October 03, 2016, 02:16:26 PM
I'm not aware of any ethical requirement to maximize government revenue.
What if you are a tax collector? :hmm:
Quote from: Valmy on October 03, 2016, 02:21:58 PM
Quote from: The Brain on October 03, 2016, 02:16:26 PM
I'm not aware of any ethical requirement to maximize government revenue.
What if you are a tax collector? :hmm:
I don't think they should collect more than what's owed.
Quote from: alfred russel on October 03, 2016, 02:17:59 PM
Quote from: dps on October 03, 2016, 02:01:15 PM
Alfred russell is wrong because he seems to be ignoring Berkut's point that the line between avoidance and evasion is not particularly clear.
Berkut is in part arguing that certain legal tax positions are unethical. I'm disputing that. and that alone.
I think that is a fair assessment of my position. If nothing else, it is refreshing to see someone disagree with someone without the need to strawman their position.
My argument is that tax codes are not "special" laws that exist in any manner that is different from any other laws, and just like other laws, there are plenty of things that could be legal that are not ethical.
Quote from: alfred russel on October 03, 2016, 02:17:59 PM
Berkut is in part arguing that certain legal tax positions are unethical. I'm disputing that. and that alone.
You're a CPA, right, Dorsey? Should I understand from this that there is nothing in your code of professional ethics concerning taxes beyond what the law states?
Same question to Martinus, or any other lawyer who does tax work.
Quote from: Savonarola on October 03, 2016, 02:48:16 PM
Quote from: alfred russel on October 03, 2016, 02:17:59 PM
Berkut is in part arguing that certain legal tax positions are unethical. I'm disputing that. and that alone.
You're a CPA, right, Dorsey? Should I understand from this that there is nothing in your code of professional ethics concerning taxes beyond what the law states?
Same question to Martinus, or any other lawyer who does tax work.
I don't know about CPAs, but it is a bit off-putting to see "Dorsey" and "ethics" mentioned in the same paragraph.
Quote from: Savonarola on October 03, 2016, 02:48:16 PM
Quote from: alfred russel on October 03, 2016, 02:17:59 PM
Berkut is in part arguing that certain legal tax positions are unethical. I'm disputing that. and that alone.
You're a CPA, right, Dorsey? Should I understand from this that there is nothing in your code of professional ethics concerning taxes beyond what the law states?
Same question to Martinus, or any other lawyer who does tax work.
In essence, no.
Now, most jurisdictions (including Poland) have broad anti-tax evasion legal clauses which essentially state that it is illegal to undertake an artificial transaction purely or predominantly for the purpose of reducing the amount of payable taxes, where no reasonable entrepreneur would take such an action if the tax benefit was absent (e.g. you are transferring an asset between two subsidiaries to reduce your tax, where such transaction has no commercial justification of any kind). Such clauses would, most likely, catch most of what the laymen consider "shady". But this is entirely within the confines of my original argument - that when it comes to taxes you are not supposed to do what is illegal.
However if, for example, the client who wants to buy a company comes to me, and there are two ways of doing so (say, in a cash-for-shares transaction and a shares-for-shares transaction), the structures are equivalent in commercial terms but one allows him to pay lower tax on the acquisition (or subsequent disposal) than the other, there is absolutely nothing preventing me from advising him to choose the beneficial structure.
Quote from: Martinus on October 03, 2016, 01:46:21 PM
Quote from: CountDeMoney on October 03, 2016, 01:19:35 PM
Quote from: Berkut on October 03, 2016, 08:03:20 AM
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.
Only because something is not obvious to a layman it does not mean it is not binary.
There are many things we do not know yet about the universe, and which require considerable research to determine. It does not mean there is no objective truth either.
Lawyers shouldn't bring up "objective truth". It's unseemly and facetious.
Quote from: Berkut on October 03, 2016, 02:29:07 PM
I think that is a fair assessment of my position. If nothing else, it is refreshing to see someone disagree with someone without the need to strawman their position.
My argument is that tax codes are not "special" laws that exist in any manner that is different from any other laws, and just like other laws, there are plenty of things that could be legal that are not ethical.
There is no way to assess what is a "fair" amount of tax to pay other than following the rules as they are written. It isn't hard to imagine the current tax regime restructured so that corporate taxes are very low and the lost tax revenue recovered through higher personal income taxes on high earners. In that case, is it unethical for corporations to not pay much in terms of tax? What if the taxes aren't even offset, and President Trump decides to slash corporate tax rates super low, not through a rate change, but a plethora of deductions?
When you put together all the laws, regulations, and relevant case law that make up our tax system, you might be talking about millions of pages. It is highly complex. It has more rationality to it than many give it credit for, but it isn't completely rationally constructed either. A lot of the structures that sound highly dubious at first mention are common business practice that are known about and/or enabled by legislators who want businesses in their jurisdictions to be advantaged.
Quote from: Savonarola on October 03, 2016, 02:48:16 PM
Quote from: alfred russel on October 03, 2016, 02:17:59 PM
Berkut is in part arguing that certain legal tax positions are unethical. I'm disputing that. and that alone.
You're a CPA, right, Dorsey? Should I understand from this that there is nothing in your code of professional ethics concerning taxes beyond what the law states?
Same question to Martinus, or any other lawyer who does tax work.
I am a CPA, but I do financial accounting and not tax work (though I work closely with tax people to financially account for what they are doing).
I don't think there is anything in the professional ethics to prevent signing off on a tax return that meets legal requirements, though this isn't something I do so it isn't something I worry about.
Quote from: Berkut on October 03, 2016, 02:29:07 PM
I think that is a fair assessment of my position. If nothing else, it is refreshing to see someone disagree with someone without the need to strawman their position.
My argument is that tax codes are not "special" laws that exist in any manner that is different from any other laws, and just like other laws, there are plenty of things that could be legal that are not ethical.
I don't think the division is between tax laws and "any other laws." There are laws that have ethical components and laws that do not. Speed laws, or vehicle registration laws, are examples of the latter. They exist only because they provide a necessary regulation under a system of laws, and some places don't even have them (places without cars). I'd argue that tax laws fall into the latter category. If you don't have taxes, you don't need the laws. If you do have such laws, then they are obeyed for coercive reasons, not ethical ones. No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
Quote from: grumbler on October 03, 2016, 03:48:53 PM
Quote from: Berkut on October 03, 2016, 02:29:07 PM
I think that is a fair assessment of my position. If nothing else, it is refreshing to see someone disagree with someone without the need to strawman their position.
My argument is that tax codes are not "special" laws that exist in any manner that is different from any other laws, and just like other laws, there are plenty of things that could be legal that are not ethical.
I don't think the division is between tax laws and "any other laws." There are laws that have ethical components and laws that do not. Speed laws, or vehicle registration laws, are examples of the latter. They exist only because they provide a necessary regulation under a system of laws, and some places don't even have them (places without cars). I'd argue that tax laws fall into the latter category. If you don't have taxes, you don't need the laws. If you do have such laws, then they are obeyed for coercive reasons, not ethical ones. No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
I think that is too simplistic. Tax compliance is largely voluntary for most people. Coercive reasons are not a particularly big motivator for most people. That changes substantially which we get into the area of corporate tax structures. In that area it is very much the way you have described it.
Quote from: crazy canuck on October 03, 2016, 06:01:17 PM
Quote from: grumbler on October 03, 2016, 03:48:53 PM
Quote from: Berkut on October 03, 2016, 02:29:07 PM
I think that is a fair assessment of my position. If nothing else, it is refreshing to see someone disagree with someone without the need to strawman their position.
My argument is that tax codes are not "special" laws that exist in any manner that is different from any other laws, and just like other laws, there are plenty of things that could be legal that are not ethical.
I don't think the division is between tax laws and "any other laws." There are laws that have ethical components and laws that do not. Speed laws, or vehicle registration laws, are examples of the latter. They exist only because they provide a necessary regulation under a system of laws, and some places don't even have them (places without cars). I'd argue that tax laws fall into the latter category. If you don't have taxes, you don't need the laws. If you do have such laws, then they are obeyed for coercive reasons, not ethical ones. No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
I think that is too simplistic. Tax compliance is largely voluntary for most people. Coercive reasons are not a particularly big motivator for most people. That changes substantially which we get into the area of corporate tax structures. In that area it is very much the way you have described it.
If there was no coercive element at all to income taxes, hardly anyone in the US would pay anything in income tax.
I agree with grumbler on this; what he posted is basically the same thing I posted earlier, just worded differently. Most of us have a moral code of some sort that tells us not rape women or to run over pedestrians for kicks, even if there weren't laws against that sort of thing (I hope so anyway). We don't have a moral code that tells us to drive no more than a certain arbitrary speed on a given stretch of road or to give our money to the government. We only do so because there are laws that compel us to do so.
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Quote from: grumbler on October 03, 2016, 03:48:53 PM
No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
You don't have a moral obligation to not put other people in danger?
Quote from: crazy canuck on October 03, 2016, 06:01:17 PM
I think that is too simplistic. Tax compliance is largely voluntary for most people. Coercive reasons are not a particularly big motivator for most people. That changes substantially which we get into the area of corporate tax structures. In that area it is very much the way you have described it.
That is why I've focused on corporate tax. However, coercive reasons are I still think a major motivator on personal returns. I suspect the tax compliance for bartenders, waiters, and waitresses is extremely low, while probably quite high for salaried people in a corporation. If employers were not mandated to report salary information and withhold taxes, I bet compliance would plummet.
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Assuming the war is just and necessary, no.
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Dying is for poors.
*puts a toaster strudel in toaster*
Quote from: alfred russel on October 03, 2016, 08:13:06 PM
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Assuming the war is just and necessary, no.
So substitute life for property, and how is this different to tax obligations?
Quote from: DGuller on October 03, 2016, 07:52:27 PM
Quote from: grumbler on October 03, 2016, 03:48:53 PM
No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
You don't have a moral obligation to not put other people in danger?
Thanks. I needed an example of a
non sequitur for my students, and this is a textbook example of one. :thumbsup:
Quote from: dps on October 03, 2016, 06:32:49 PM
I agree with grumbler on this; what he posted is basically the same thing I posted earlier, just worded differently.
I should have pointed out that you had made this argument earlier and that I was agreeing with it. Sorry.
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
It is not up to the taxpayer to determine which is a loophole and which isn't. If there are loopholes, then it is the responsibility of the lawmakers to close them. The taxpayers' responsibility is to pay taxes as required under the tax code.
Quote from: grumbler on October 03, 2016, 09:05:42 PM
Quote from: DGuller on October 03, 2016, 07:52:27 PM
Quote from: grumbler on October 03, 2016, 03:48:53 PM
No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
You don't have a moral obligation to not put other people in danger?
Thanks. I needed an example of a non sequitur for my students, and this is a textbook example of one. :thumbsup:
:yeahright: Something tells me that your students have already been lectured on hundreds of examples of non sequiturs.
Quote from: alfred russel on October 03, 2016, 08:06:02 PM
Quote from: crazy canuck on October 03, 2016, 06:01:17 PM
I think that is too simplistic. Tax compliance is largely voluntary for most people. Coercive reasons are not a particularly big motivator for most people. That changes substantially which we get into the area of corporate tax structures. In that area it is very much the way you have described it.
That is why I've focused on corporate tax. However, coercive reasons are I still think a major motivator on personal returns. I suspect the tax compliance for bartenders, waiters, and waitresses is extremely low, while probably quite high for salaried people in a corporation. If employers were not mandated to report salary information and withhold taxes, I bet compliance would plummet.
Perhaps a difference between our countries. Employers here do not report salary information but instead issue statements which the employee provides to the tax authority. Auditing of salaried and hourly wage earners is very rare. Voluntary compliance among that group of tax payers is very high.
Quote from: DGuller on October 03, 2016, 09:25:49 PM
Quote from: grumbler on October 03, 2016, 09:05:42 PM
Quote from: DGuller on October 03, 2016, 07:52:27 PM
Quote from: grumbler on October 03, 2016, 03:48:53 PM
No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
You don't have a moral obligation to not put other people in danger?
Thanks. I needed an example of a non sequitur for my students, and this is a textbook example of one. :thumbsup:
:yeahright: Something tells me that your students have already been lectured on hundreds of examples of non sequiturs.
I have always felt sorry for those poor kids
Quote from: DGuller on October 03, 2016, 08:46:06 PM
Quote from: alfred russel on October 03, 2016, 08:13:06 PM
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Assuming the war is just and necessary, no.
So substitute life for property, and how is this different to tax obligations?
Because there is a long standing historical ethic of "doing one's duty" in fighting evil, being patriotic, etc. when Nazis are at the gates.
I'm not aware of a similar ethic to not take advantage of accelerated depreciation on an SUV, or to have an effective tax rate of 25% when the tax code makes it possible to legally have a tax rate of 22%. You simply need to pay what you owe, and what you owe is defined by statute.
Quote from: Razgovory on October 03, 2016, 09:34:35 PM
Quote from: DGuller on October 03, 2016, 09:25:49 PM
Quote from: grumbler on October 03, 2016, 09:05:42 PM
Quote from: DGuller on October 03, 2016, 07:52:27 PM
Quote from: grumbler on October 03, 2016, 03:48:53 PM
No one has a moral obligation to drive slower than the speed limit demands, nor to pay more taxes than are required.
You don't have a moral obligation to not put other people in danger?
Thanks. I needed an example of a non sequitur for my students, and this is a textbook example of one. :thumbsup:
:yeahright: Something tells me that your students have already been lectured on hundreds of examples of non sequiturs.
I have always felt sorry for those poor kids
Let's pretend I have some reply to this, to make it easier for grumbler to respond.
He is molding Young Minds. Like Larry King and Wilford Brimley.
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
What does it mean "you know shouldn't have been there"? How do you know these things?
Quote from: Martinus on October 03, 2016, 11:33:45 PM
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
What does it mean "you know shouldn't have been there"? How do you know these things?
You often can know if you have common sense and don't have an overriding desire to not know such things.
Quote from: DGuller on October 03, 2016, 08:46:06 PM
Quote from: alfred russel on October 03, 2016, 08:13:06 PM
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Assuming the war is just and necessary, no.
So substitute life for property, and how is this different to tax obligations?
Newsflash: our morality frequently differentiates between the treatment of human life and property. :huh:
For example, if I create human life (by having a child), I cannot then destroy it or turn it into something else. I can do it with things I create.
Ultimately, I think the reason people think it's okay to get one over the IRS is the same reason people think it's okay to get one over an insurance company. You're not "creatively interpreting the rules" to cheat a fellow human being, you're cheating a faceless organization. Except you really are cheating other regular people, just not in an obvious way; the feedback that causes the other people to finance your creative interpretation has just enough intermediate steps to keep your conscience at bay (if you have any).
Quote from: DGuller on October 04, 2016, 12:47:37 AM
Ultimately, I think the reason people think it's okay to get one over the IRS is the same reason people think it's okay to get one over an insurance company. You're not "creatively interpreting the rules" to cheat a fellow human being, you're cheating a faceless organization. Except you really are cheating other regular people, just not in an obvious way; the feedback that causes the other people to finance your creative interpretation has just enough intermediate steps to keep your conscience at bay (if you have any).
Ultimately, I think that you are being ridiculous in arguing that taking advantage of all legal means to reduce taxes is thinking that "it's okay to get one over the IRS."
Ultimately, I think the reason people think the way you do is because they want, desperately, to feel morally superior to other people, and have no objective basis for doing so.*
* (This is, of course, just a spoof of your ridiculous argument.)
Whether trump acted ethical sort of misses the point here. Trump proposes an enormous tax cut for the rich in order to create new jobs. Since "smart" businessmen like Trump don't pay taxes, to begin with, what's the point of a tax cut?
Quote from: Razgovory on October 04, 2016, 06:27:31 AM
Whether trump acted ethical sort of misses the point here. Trump proposes an enormous tax cut for the rich in order to create new jobs. Since "smart" businessmen like Trump don't pay taxes, to begin with, what's the point of a tax cut?
:thumbsup:
Quote from: grumbler on October 04, 2016, 05:00:08 AM
Ultimately, I think the reason people think the way you do is because they want, desperately, to feel morally superior to other people, and have no objective basis for doing so.*
I often wonder if this is Grumbler's true self and he hides it (I hope) in the classroom or if he has just been trolling us all these years - as I assume Marti has been doing.
What if I just want to kind of casually feel morally superior, but am not particularly desperate about it? How would one discern the difference there?
Or what if I am desperate to feel morally equivalent?
Quote from: Razgovory on October 04, 2016, 06:27:31 AM
Whether trump acted ethical sort of misses the point here. Trump proposes an enormous tax cut for the rich in order to create new jobs. Since "smart" businessmen like Trump don't pay taxes, to begin with, what's the point of a tax cut?
To allow dumb businessmen to create jobs, too. D'oh. :)
Quote from: crazy canuck on October 04, 2016, 09:11:47 AM
Quote from: grumbler on October 04, 2016, 05:00:08 AM
Ultimately, I think the reason people think the way you do is because they want, desperately, to feel morally superior to other people, and have no objective basis for doing so.*
I often wonder if this is Grumbler's true self and he hides it (I hope) in the classroom or if he has just been trolling us all these years - as I assume Marti has been doing.
:lmfao: Wow, now there's a reading comprehension fail! No wonder you fall for thse Onion stories all the time: you can't tell a spoof even when it is explicitly labelled as one!
Quote from: dps on October 04, 2016, 10:48:25 AM
Quote from: Razgovory on October 04, 2016, 06:27:31 AM
Whether trump acted ethical sort of misses the point here. Trump proposes an enormous tax cut for the rich in order to create new jobs. Since "smart" businessmen like Trump don't pay taxes, to begin with, what's the point of a tax cut?
To allow dumb businessmen to create jobs, too. D'oh. :)
To answer it seriously, it is not the case that smart businessmen don't pay taxes: at least if you look at the proportion of taxes high earners pay, it is quite high.
However, even in a system where that was the case, it could make sense to reduce taxes. In a business of any size, any significant decisions involving the supply chain, acquisitions, divestitures, major investments, etc. will have tax people sitting at the table and providing significant input. That isn't the most economically efficient state of affairs. Even if a company is avoiding most taxes, by reducing the tax rate you reduce their incentive to structure operations in a tax driven manner.
QuoteTo answer it seriously, it is not the case that smart businessmen don't pay taxes: at least if you look at the proportion of taxes high earners pay, it is quite high.
High compared to what? I mean it would be weird if the proportion of taxes that come from penniless people living in the streets was high. 'Most of this country's taxes are collected from single parents with five or more children and who lack a high school education'
QuoteHowever, even in a system where that was the case, it could make sense to reduce taxes. In a business of any size, any significant decisions involving the supply chain, acquisitions, divestitures, major investments, etc. will have tax people sitting at the table and providing significant input. That isn't the most economically efficient state of affairs. Even if a company is avoiding most taxes, by reducing the tax rate you reduce their incentive to structure operations in a tax driven manner.
How far exactly do we need to cut things before all these great benefits kick in?
I guess I am worried about the deficit. So how many amazing high paying jobs were added last time we seriously cut taxes? Was it worth the huge growth in federal debt?
He isn't saying we should cut taxes on the wealthy, he is saying that it is possible that doing so might have some positive side effects that you might not realize.
The particulars of whether you should or not in some specific circumstance is not the same.
At least, I think that is what he is saying.
Quote from: Berkut on October 04, 2016, 11:36:02 AM
He isn't saying we should cut taxes on the wealthy, he is saying that it is possible that doing so might have some positive side effects that you might not realize.
The particulars of whether you should or not in some specific circumstance is not the same.
At least, I think that is what he is saying.
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Now some tax rates are so burdensome that companies will just get out of dodge but I have yet to see that federal taxes are high enough to have that sort of impact. Sometimes the states drive them away though.
Quote from: Valmy on October 04, 2016, 11:39:03 AM
Quote from: Berkut on October 04, 2016, 11:36:02 AM
He isn't saying we should cut taxes on the wealthy, he is saying that it is possible that doing so might have some positive side effects that you might not realize.
The particulars of whether you should or not in some specific circumstance is not the same.
At least, I think that is what he is saying.
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Now some tax rates are so burdensome that companies will just get out of dodge but I have yet to see that federal taxes are high enough to have that sort of impact. Sometimes the states drive them away though.
Companies plan around all of their expenses, of course. And the extent that they plan around them is of course directly related to how much those expenses are, and how elastic they are to being planned around.
That is the only part I think Dorsey is leaving out - that the reason they spend considerable resources planning around them is not just because of the amount, but because that amount is vulnerable to being adjusted radically by creative accounting. That is the real problem with our system - that people like Trump can lose a billion dollars of someone elses money, then use that to offset paying taxes himself for a couple decades.
The never ending battle between people who write tax law, and people who are paid to exploit tax law, will always be won by the lawyers and business people. They are, simply, smarter and better equipped to win that fight. Not to mention the corruption involved in those same people being responsible for the law writers having their jobs to begin with...
Quote from: Valmy on October 04, 2016, 11:31:29 AM
QuoteTo answer it seriously, it is not the case that smart businessmen don't pay taxes: at least if you look at the proportion of taxes high earners pay, it is quite high.
High compared to what? I mean it would be weird if the proportion of taxes that come from penniless people living in the streets was high. 'Most of this country's taxes are collected from single parents with five or more children and who lack a high school education'
I meant something like the top 5% pay like 40% of income taxes or something. Not saying that is unfair, just saying it is evidence of rich people being smart enough not to pay taxes.
Quote from: Berkut on October 04, 2016, 11:36:02 AM
He isn't saying we should cut taxes on the wealthy, he is saying that it is possible that doing so might have some positive side effects that you might not realize.
The particulars of whether you should or not in some specific circumstance is not the same.
At least, I think that is what he is saying.
Yeah, just making a theoretical point.
FWIW, I think that all else being equal, corporate taxes should be cut and offset with higher tax rates on high earners. Corporate taxes are generally much easier to plan around than personal, and the effects of planning are generally negative.
I think we need to re-evaluate our entire tax structure. It is just a mess.
I don't think we should go to some flat tax bullshit, but I do think a radical simplifying is in order, and a much simpler understanding of how we want to collect revenue, and from whom.
This won't happen, of course. Probably can't happen, even.
Quote from: Valmy on October 04, 2016, 11:39:03 AM
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Now some tax rates are so burdensome that companies will just get out of dodge but I have yet to see that federal taxes are high enough to have that sort of impact. Sometimes the states drive them away though.
Generally speaking, a tax strategy isn't just an arrangement of words and numbers in a tax filing--it needs real world actions to implement. That might mean moving production to another country, opening an office somewhere obscure, or having your supply chain organized in a way it wouldn't otherwise. There are costs to those things, and the benefit is tied to the tax rate. Lower the rate, you lower the benefit, and reduce tax driven decisions.
Quote from: Berkut on October 04, 2016, 12:04:19 PM
I think we need to re-evaluate our entire tax structure. It is just a mess.
I don't think we should go to some flat tax bullshit, but I do think a radical simplifying is in order, and a much simpler understanding of how we want to collect revenue, and from whom.
This won't happen, of course. Probably can't happen, even.
The flat tax as a simplification method makes no sense to me. I don't think marginal taxes make the top 100 list of why the tax code is complex.
Quote from: DGuller on October 03, 2016, 07:51:06 PM
Is it ethical to use a loophole, that you know shouldn't have been there, to avoid military draft during a major war?
Lots of laws shouldn't be, but are. You can't just ignore nonsensical laws.
Quote from: The Brain on October 04, 2016, 12:13:43 PM
Lots of laws shouldn't be, but are. You can't just ignore nonsensical laws.
I do. I rip the tags off mattresses regularly.
Quote from: Valmy on October 04, 2016, 12:20:30 PM
Quote from: The Brain on October 04, 2016, 12:13:43 PM
Lots of laws shouldn't be, but are. You can't just ignore nonsensical laws.
I do. I rip the tags off mattresses regularly.
Barbarian.
I cut them off neatly.
Quote from: grumbler on October 04, 2016, 11:17:15 AM
Quote from: crazy canuck on October 04, 2016, 09:11:47 AM
Quote from: grumbler on October 04, 2016, 05:00:08 AM
Ultimately, I think the reason people think the way you do is because they want, desperately, to feel morally superior to other people, and have no objective basis for doing so.*
I often wonder if this is Grumbler's true self and he hides it (I hope) in the classroom or if he has just been trolling us all these years - as I assume Marti has been doing.
:lmfao: Wow, now there's a reading comprehension fail! No wonder you fall for thse Onion stories all the time: you can't tell a spoof even when it is explicitly labelled as one!
I am beginning to think it is your true self.
Quote from: alfred russel on October 04, 2016, 12:05:51 PM
Quote from: Valmy on October 04, 2016, 11:39:03 AM
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Now some tax rates are so burdensome that companies will just get out of dodge but I have yet to see that federal taxes are high enough to have that sort of impact. Sometimes the states drive them away though.
Generally speaking, a tax strategy isn't just an arrangement of words and numbers in a tax filing--it needs real world actions to implement. That might mean moving production to another country, opening an office somewhere obscure, or having your supply chain organized in a way it wouldn't otherwise. There are costs to those things, and the benefit is tied to the tax rate. Lower the rate, you lower the benefit, and reduce tax driven decisions.
But it can be form over substance which is what I think Berkut, Tyr et al are referring to.
Quote from: crazy canuck on October 04, 2016, 02:09:46 PM
Quote from: grumbler on October 04, 2016, 11:17:15 AM
:lmfao: Wow, now there's a reading comprehension fail! No wonder you fall for thse Onion stories all the time: you can't tell a spoof even when it is explicitly labelled as one!
I am beginning to think it is your true self.
I'm guessing that this was some failed attempt at an
ad hom argument? :yawn:
Quote from: Berkut on October 04, 2016, 12:04:19 PM
I think we need to re-evaluate our entire tax structure. It is just a mess.
I don't think we should go to some flat tax bullshit, but I do think a radical simplifying is in order, and a much simpler understanding of how we want to collect revenue, and from whom.
This won't happen, of course. Probably can't happen, even.
Yes, I think part of the reason that corporations spend so much money planning around taxes is because the tax code is too complex. I'm not sure that corporate taxes really can be made fairly simple, but personal income taxes could easily be made very simple if we had the political will to do so.
Quote from: dps on October 04, 2016, 02:47:01 PM
Quote from: Berkut on October 04, 2016, 12:04:19 PM
I think we need to re-evaluate our entire tax structure. It is just a mess.
I don't think we should go to some flat tax bullshit, but I do think a radical simplifying is in order, and a much simpler understanding of how we want to collect revenue, and from whom.
This won't happen, of course. Probably can't happen, even.
Yes, I think part of the reason that corporations spend so much money planning around taxes is because the tax code is too complex. I'm not sure that corporate taxes really can be made fairly simple, but personal income taxes could easily be made very simple if we had the political will to do so.
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
Like, what percentage of total revenue should come from these groups, and what percent from these, and what percent from those.
Then, after you've done that - THEN proceed to formulate an actual set of tax law to realize those particular foundational ideas. Right now, we have let the tax system evolve so much I don't think it has much relationship anymore to any kind of core principles.
Quote from: grumbler on October 04, 2016, 02:20:59 PM
Quote from: crazy canuck on October 04, 2016, 02:09:46 PM
Quote from: grumbler on October 04, 2016, 11:17:15 AM
:lmfao: Wow, now there's a reading comprehension fail! No wonder you fall for thse Onion stories all the time: you can't tell a spoof even when it is explicitly labelled as one!
I am beginning to think it is your true self.
I'm guessing that this was some failed attempt at an ad hom argument? :yawn:
Does every piece of communication have to be an argument? Isn't there some room for communication that aims to simply inform the other person about how the communicator perceives them? It seems like CC is just expressing his own opinion, other people may disagree (in theory).
Quote from: DGuller on October 04, 2016, 05:08:27 PM
Does every piece of communication have to be an argument? Isn't there some room for communication that aims to simply inform the other person about how the communicator perceives them? It seems like CC is just expressing his own opinion, other people may disagree (in theory).
Well, either "I am beginning to think it is your true self" is either an argument, or it is gibberish. The utter failure to even give a clue as to whatever "it" is that CC is "beginning to think" is my "true self" is enough to make the rest of the statement a failure, and the fact that CC is even considering the possibility that he can truthfully say anything about the "true self" of someone he has never met nor, even, talked to, is egotism of the highest order. Hell, he didn't even look into my eyes!
That's my opinion. You may (in theory) disagree.
Quote from: grumbler on October 04, 2016, 06:20:12 PM
Quote from: DGuller on October 04, 2016, 05:08:27 PM
Does every piece of communication have to be an argument? Isn't there some room for communication that aims to simply inform the other person about how the communicator perceives them? It seems like CC is just expressing his own opinion, other people may disagree (in theory).
Well, either "I am beginning to think it is your true self" is either an argument, or it is gibberish. The utter failure to even give a clue as to whatever "it" is that CC is "beginning to think" is my "true self" is enough to make the rest of the statement a failure, and the fact that CC is even considering the possibility that he can truthfully say anything about the "true self" of someone he has never met nor, even, talked to, is egotism of the highest order. Hell, he didn't even look into my eyes!
That's my opinion. You may (in theory) disagree.
People filter themselves a lot less online than they do in person. I think that fact is not in dispute. To suggest that an in-person meeting or two will give CC a better glimpse into your soul than 10+ year posting history is what's gibberish.
Quote from: DGuller on October 04, 2016, 07:15:19 PM
People filter themselves a lot less online than they do in person. I think that fact is not in dispute. To suggest that an in-person meeting or two will give CC a better glimpse into your soul than 10+ year posting history is what's gibberish.
I wonder if you are making up the "fact" that is "not in dispute," or whether you read it online somewhere and swallowed it as not only the truth, but so true as to be "not in dispute." Either way, it is cute to see an adult so gullible.
I can guarantee you that even 10+ years of reading some posts on highly selective topics doesn't give anyone here a clue as to my "true self." Some here are friends, and know more about me from exchanges outside of here, but neither CC nor yourself are in that category. For either of you to proclaim that you know some mysterious "it" that is my true self is preening beyond belief.
I find this thread taxing.
Quote from: grumbler on October 04, 2016, 08:11:13 PM
Quote from: DGuller on October 04, 2016, 07:15:19 PM
People filter themselves a lot less online than they do in person. I think that fact is not in dispute. To suggest that an in-person meeting or two will give CC a better glimpse into your soul than 10+ year posting history is what's gibberish.
I wonder if you are making up the "fact" that is "not in dispute," or whether you read it online somewhere and swallowed it as not only the truth, but so true as to be "not in dispute." Either way, it is cute to see an adult so gullible.
I can guarantee you that even 10+ years of reading some posts on highly selective topics doesn't give anyone here a clue as to my "true self." Some here are friends, and know more about me from exchanges outside of here, but neither CC nor yourself are in that category. For either of you to proclaim that you know some mysterious "it" that is my true self is preening beyond belief.
If someone is consistently, thoroughly, and unapologetically abusive towards other people in a certain setting, then yes, I do think this tells me something about them as a person. I'm peculiar that way.
Quote from: DGuller on October 04, 2016, 08:45:25 PM
If someone is consistently, thoroughly, and unapologetically abusive towards other people in a certain setting, then yes, I do think this tells me something about them as a person. I'm peculiar that way.
I think that you are too harsh on yourself.
Quote from: grumbler on October 04, 2016, 08:11:13 PM
I can guarantee you that even 10+ years of reading some posts on highly selective topics doesn't give anyone here a clue as to my "true self." Some here are friends, and know more about me from exchanges outside of here, but neither CC nor yourself are in that category. For either of you to proclaim that you know some mysterious "it" that is my true self is preening beyond belief.
Grumbler is a mystery shrouded in an enigma wrapped up in an ancient Egyptian mummy.
I wish Grumbles, CC and DG would just fuck and get it over with. I'd assume it would be DG getting the Eiffel Tower treatment.
Do I want to find out what that is? :unsure:
Quote from: Ed Anger on October 05, 2016, 11:13:10 AM
I wish Grumbles, CC and DG would just fuck and get it over with. I'd assume it would be DG getting the Eiffel Tower treatment.
I fucked just last night, so that part is done. CC is married, so it might be tougher for him to fuck.
Fuck on, fuck off.
Quote from: Valmy on October 04, 2016, 11:39:03 AM
Quote from: Berkut on October 04, 2016, 11:36:02 AM
He isn't saying we should cut taxes on the wealthy, he is saying that it is possible that doing so might have some positive side effects that you might not realize.
The particulars of whether you should or not in some specific circumstance is not the same.
At least, I think that is what he is saying.
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Now some tax rates are so burdensome that companies will just get out of dodge but I have yet to see that federal taxes are high enough to have that sort of impact. Sometimes the states drive them away though.
tax is an expense like any other. Your duty, to your shareholders, is to maximise their wealth. There is no downside in reducing your tax expense, customers won't stop shopping at your place when they learn you dodge taxes any legal way you can. Paying more taxes does not bring more customers either.
So it comes down to pure costs. How much does it costs to hire fiscalists to plan my taxes vs how much money I will save.
You may put an allowance for future defense costs, but usually, in these cases, the worst case scenario is that the government will change the rules and it will not be allowed in the future, but your past gains are still ok.
Quote from: crazy canuck on October 03, 2016, 09:28:28 PM
Employers here do not report salary information but instead issue statements which the employee provides to the tax authority. Auditing of salaried and hourly wage earners is very rare. Voluntary compliance among that group of tax payers is very high.
Not entirely true.
First, for my sector, I have to make monthly report to the appropriate authority the salary, sector of activity, union, hours, region of work and salary bonus of all my workforce.
I have to report monthly and yearly the wages paid to all employees, the income tax and all other deductions I took on their pay and give the government their due.
Yearly I will then have to give each employee and the government the same individual reports as well as a global one. The only thing the Revenue agency does not get is the hours made, that is the responsibility of another agency.
For bartenders&waiters, the employer must provide a statement for the amount of tip received. If below 10%, the government will assume they are cheating and the employer as well as the employee will need to prove they make less.
Quote from: Ed Anger on October 05, 2016, 11:13:10 AM
I wish Grumbles, CC and DG would just fuck and get it over with. I'd assume it would be DG getting the Eiffel Tower treatment.
"
Sacre bleu, hell...damned near killed 'em!"
Quote from: DGuller on October 05, 2016, 11:49:10 AM
Do I want to find out what that is? :unsure:
Yeah, you should.
Quote from: Berkut on October 04, 2016, 03:30:14 PM
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
You do realise that would put hundreds of companies out of business and thousands of people out of work, right?
Quote from: Martinus on October 05, 2016, 05:51:21 PM
Quote from: Berkut on October 04, 2016, 03:30:14 PM
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
You do realise that would put hundreds of companies out of business and thousands of people out of work, right?
I have been told that eliminating taxes would in fact lead to everybody having a high paying job, now that all the job creators have been freed from their chains.
Quote from: Martinus on October 05, 2016, 05:51:21 PM
Quote from: Berkut on October 04, 2016, 03:30:14 PM
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
You do realise that would put hundreds of companies out of business and thousands of people out of work, right?
they said that when they reformed the old french civil code in my province. Now they're saying lawyers are so expensive that they risk destroying their own practice since barely anyone but a tiny rich minority can really afford them.
Quote from: Martinus on October 05, 2016, 05:51:21 PM
Quote from: Berkut on October 04, 2016, 03:30:14 PM
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
You do realise that would put hundreds of companies out of business and thousands of people out of work, right?
Taxes exist to fund public expenditure, not to generate tax advisory jobs.
Quote from: Martinus on October 05, 2016, 05:51:21 PM
Quote from: Berkut on October 04, 2016, 03:30:14 PM
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
You do realise that would put hundreds of companies out of business and thousands of people out of work, right?
Just like single-payer healthcare. :)
Quote from: Martinus on October 05, 2016, 05:51:21 PM
Quote from: Berkut on October 04, 2016, 03:30:14 PM
While I do think simplifying it would be nice, I am more thinking of just starting over from scratch from some foundational principles.
You do realise that would put hundreds of companies out of business and thousands of people out of work, right?
:yes:
We can also stimulate demand for window repair and replacement jobs by throwing bricks through windows.
Quote from: grumbler on October 05, 2016, 11:55:11 AM
I fucked just last night, so that part is done.
Fucking up this thread doesn't count.
Quote from: alfred russel on October 05, 2016, 09:26:54 PM
Quote from: grumbler on October 05, 2016, 11:55:11 AM
I fucked just last night, so that part is done.
Fucking up this thread doesn't count.
No, you will have to try something new. It will be worth it, if you are successful.
Quote from: Valmy on October 04, 2016, 11:39:03 AM
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Yeah, they would plan around the taxes no matter what the rates are, because that's just obvious. There's not going to be a company who says "we don't care about the taxes because they aren't that bad". They will always be weighing the costs of relocation vs the costs of staying.
Moving stuff is expensive. You can tax a company quite a lot before moving makes sense. If it gets to that point where there is a mass exodus or whatever, you're well past the question of tactical planning and more in the line of either increasing repression or loosening. A lot.
I do think that world governments competing for better tax rates is a good force in the market though. "Tax havens" could be easily put out of business by removing their advantage. Just out-compete them. It's happening to my own state now in the corporate registration arena. For decades, a corporation residence Mecca. We can't hack it and we're getting screwed. If we weren't making sweetheart deals with Tesla and Apple we'd be going down the drain. It's all about the high-powered connections.
Once you start relying on that stuff, you're done. It might be tomorrow, it might be a few decades, but that's it.
Quote from: MadImmortalMan on October 06, 2016, 02:44:02 AM
Quote from: Valmy on October 04, 2016, 11:39:03 AM
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Yeah, they would plan around the taxes no matter what the rates are, because that's just obvious. There's not going to be a company who says "we don't care about the taxes because they aren't that bad". They will always be weighing the costs of relocation vs the costs of staying. Moving stuff is expensive. You can tax a company quite a lot before moving makes sense. If it gets to that point where there is a mass exodus or whatever, you're well past the question of tactical planning and more in the line of either increasing repression or loosening. A lot.
I do think that world governments competing for better tax rates is a good force in the market though. "Tax havens" could be easily put out of business by removing their advantage. Just out-compete them. It's happening to my own state now in the corporate registration arena. For decades, a corporation residence Mecca. We can't hack it and we're getting screwed. If we weren't making sweetheart deals with Tesla and Apple we'd be going down the drain. It's all about the high-powered connections.
Once you start relying on that stuff, you're done. It might be tomorrow, it might be a few decades, but that's it.
how does a country that wishes to provide any services compete with a jurisdiction that has no tax? A race to the bottom is just that. Your state's gain is a loss for the whole country as states are able to provide less and less basic infrastructure and services.
Put another way, how will your state react when another state or country attracts those companies away with even more generous tax rates and subsidies.
Quote from: crazy canuck on October 06, 2016, 07:59:44 AM
Quote from: MadImmortalMan on October 06, 2016, 02:44:02 AM
Quote from: Valmy on October 04, 2016, 11:39:03 AM
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Yeah, they would plan around the taxes no matter what the rates are, because that's just obvious. There's not going to be a company who says "we don't care about the taxes because they aren't that bad". They will always be weighing the costs of relocation vs the costs of staying. Moving stuff is expensive. You can tax a company quite a lot before moving makes sense. If it gets to that point where there is a mass exodus or whatever, you're well past the question of tactical planning and more in the line of either increasing repression or loosening. A lot.
I do think that world governments competing for better tax rates is a good force in the market though. "Tax havens" could be easily put out of business by removing their advantage. Just out-compete them. It's happening to my own state now in the corporate registration arena. For decades, a corporation residence Mecca. We can't hack it and we're getting screwed. If we weren't making sweetheart deals with Tesla and Apple we'd be going down the drain. It's all about the high-powered connections.
Once you start relying on that stuff, you're done. It might be tomorrow, it might be a few decades, but that's it.
how does a country that wishes to provide any services compete with a jurisdiction that has no tax? A race to the bottom is just that. Your state's gain is a loss for the whole country as states are able to provide less and less basic infrastructure and services.
Put another way, how will your state react when another state or country attracts those companies away with even more generous tax rates and subsidies.
It's all a matter of (as almost always) perverse incentives.
It can be attractive to attract businesses with tax breaks because the idea is that they bring jobs, and those jobs are more valuable to the locality than the taxes the business might generate. For a locality that is struggling, that is likely actually completely true. More business tax revenue is the least of their problems when their property values have collapsed and young people are fleeing the area.
So there is a powerful incentive to attract businesses regardless of your desire to generate business tax revenue. Bootstrapping the economy by getting some significant employer (or several of them) to come in is vastly more important.
In a nutshell, for a depressed local economy the benefits of a business coming in are not really about the tax that particular business will pay directly, but the indirect and substantial benefits the business itself provides to the local economy. So it makes perfect sense to offer them little or no direct taxes.
Quote from: Berkut on October 06, 2016, 08:19:27 AM
In a nutshell, for a depressed local economy the benefits of a business coming in are not really about the tax that particular business will pay directly, but the indirect and substantial benefits the business itself provides to the local economy. So it makes perfect sense to offer them little or no direct taxes.
Indeed. "Business taxes" per se are not collected on the local level anyway. Property taxes, etc are assessed locally, but the business tax rate doesn't impact those; Corporations with shells headquartered in tax havens still have to pay property taxes on their physical locations.
I think that an argument could be made that business taxes themselves are antiquated and should be done away with, and the taxes on business profits captured at the individual income level.
Quote from: grumbler on October 06, 2016, 08:29:32 AM
I think that an argument could be made that business taxes themselves are antiquated and should be done away with, and the taxes on business profits captured at the individual income level.
I think I could support that idea, but it would probably have to be part of a comprehensive tax reform, which will probably never happen.
Heck I wondering if any sort of reform of anything at all is possible these days much less something as significant as taxation.
Quote from: Berkut on October 06, 2016, 08:19:27 AM
Quote from: crazy canuck on October 06, 2016, 07:59:44 AM
Quote from: MadImmortalMan on October 06, 2016, 02:44:02 AM
Quote from: Valmy on October 04, 2016, 11:39:03 AM
I am challenging the assumption that the reason that companies plan around taxes is because they are too high. If the company is making millions it seems hard to conceive of a rate where it would just not make sense to do so. Even if it was 1% surely that is worth hiring a few tax attorneys.
Yeah, they would plan around the taxes no matter what the rates are, because that's just obvious. There's not going to be a company who says "we don't care about the taxes because they aren't that bad". They will always be weighing the costs of relocation vs the costs of staying. Moving stuff is expensive. You can tax a company quite a lot before moving makes sense. If it gets to that point where there is a mass exodus or whatever, you're well past the question of tactical planning and more in the line of either increasing repression or loosening. A lot.
I do think that world governments competing for better tax rates is a good force in the market though. "Tax havens" could be easily put out of business by removing their advantage. Just out-compete them. It's happening to my own state now in the corporate registration arena. For decades, a corporation residence Mecca. We can't hack it and we're getting screwed. If we weren't making sweetheart deals with Tesla and Apple we'd be going down the drain. It's all about the high-powered connections.
Once you start relying on that stuff, you're done. It might be tomorrow, it might be a few decades, but that's it.
how does a country that wishes to provide any services compete with a jurisdiction that has no tax? A race to the bottom is just that. Your state's gain is a loss for the whole country as states are able to provide less and less basic infrastructure and services.
Put another way, how will your state react when another state or country attracts those companies away with even more generous tax rates and subsidies.
It's all a matter of (as almost always) perverse incentives.
It can be attractive to attract businesses with tax breaks because the idea is that they bring jobs, and those jobs are more valuable to the locality than the taxes the business might generate. For a locality that is struggling, that is likely actually completely true. More business tax revenue is the least of their problems when their property values have collapsed and young people are fleeing the area.
So there is a powerful incentive to attract businesses regardless of your desire to generate business tax revenue. Bootstrapping the economy by getting some significant employer (or several of them) to come in is vastly more important.
In a nutshell, for a depressed local economy the benefits of a business coming in are not really about the tax that particular business will pay directly, but the indirect and substantial benefits the business itself provides to the local economy. So it makes perfect sense to offer them little or no direct taxes.
I see the logic at the local level. But it doesn't work very well at the state/provincial or national level. At some point taxes have to be collected or infrastructure crumbles.