Geez - I am not labeling "me" as a terrorist -- What I am saying is that if anyone wanted to have a major material impact on the largest companies in the world - with them offshoring most of their revenues in the carribean banks to avoid taxes - those tiny islands must have poorly protected infrastructure...
I find it ironic that Google and Apple and FB have extremely well protected physical security surrounding their datacenters, but have trillions of dollars in assets in little Island banking systems which likely have few, and easily accessible, physical undersea cables providing their main services....
It's not like the movies. You can't just hack into some servers and steal money. You can destroy all of their computing infrastructure and internet connections and not change anything, other than calling a lot of international attention to yourself.
If you "transfer" billions of dollars to "Bermuda" or some such - where does that money actually reside? Wouldn't Bermuda have their financial systems hosted in, perhaps, Switzerland?
If you were to cut off internet to the actual island of Bermuda, what actual financial impact would it have on those funds.
Would they be effectively quarantined to Bermuda? Or are they just legally labeled as being under Bermudian financial jurisdiction in whatever financial cloud these DB fields physically live?
Currency notes and any backing standard like gold are quickly moved to and stored in separate secure facilities, and international currency is traded to maintain quotas. All of the records are stored in databases in private datacenters with backups and hard paper copies. The rest of the banking world also has ledgers that track the other end of any transfers in and out of a specific region, bank, and branch so there is a lot of distributed data for accounts and transactions.
Internet access is just a convenience. Phone calls and faxes work fine and larger banks have private networks backed by fiber, microwave and satellite links. If that's all unavailable then records will be moved with the physical cash.
Stopping internet would do nothing. Stopping all digital access would slow down some transactions by hours or days. Stopping all physical and digital access would completely stop transactions but the rest of the global system will continue on and will usually cover for any problems.
So the worst you could is stop transfers for hours or days, and with this kind of money you'll end up facing military action aided by intelligence services that will want you locked up in a hole for a very long time.
Genuine question - what do you think that would achieve?
edit: just to pre-empt any confusion, I'm not accusing you of wanting to do this. I'm just curious what you think someone interested in this would expect from it. Other than to bloody the noses of the elites and make them a little uncomfortable for a short period, I can't see any real impact unless an attacker goes further than DDOS or cutting cables (e.g. if they were to steal some of the money as well, or wipe records)
It will annoy them later when they want to evade more taxes and need to transfer "their" money to the next corrupt tax haven, and can't sign in to their bank.
And do what ? It's not like there is $23B in cash laying around for them to steal. Even if they went and stole the hardware server they wouldn't have the money.
They would have more luck by taking Larry Page hostage (and no, it wouldn't work either).
Your comment reminded me of a thought I had not too long ago: what would stop a superpower like the United States from going around shaking down all the supposed tax havens? They wouldn't have to declare war outright, they could just impose a no-fly zone and put a navy cordon in international waters. In the cases of land-locked tax-havens in Europe, the superpower would need to negotiate with the tax havens of the bordering countries, so it's less feasible, but still possible.
Edit: This would be specifically for individuals hiding their wealth abroad and declaring a lower than actual income, and not for corporations that publish their balance sheets.
It would disrupt the delicate framework of trust that the top level of global economics flows upon, and ultimately, the US economy is a trust-based animal.
The more interesting scenario would be a smaller government trying to embarrass or blackmail the US by doing something similar with THEIR military, and that's the stuff of James Bond movies. ;)
There were likely less franchises and chains so every town had their own one-off local Diners instead of Dennys, had a shoe store instead of Amazon etc.
The extent to which chains/internet has elliminated these mom and pop stores is staggering... and also why there was so much "self-employment" back then
Disclaimer: I'm making an intelligent guess here; these views are not (AFAIK) backed by any study
This assumes that paying tax makes the world a better place. I am sure Bill Gates has played similar accounting tricks and look, he's about to rid the world of Malaria. Yes tax dollars are used for social good, but they also fund the military and provide subsidies for all sorts of nefarious industries.
The fact that tax money is perceived as mismanaged is never an excuse to avoid paying taxes. That's a different problem with it's own solution. At least a citizen has the theoretical power to vote out people who mismanage tax money. You don't get a say about how a billionaire spends his/hers money. Actually, most of them are hoarding it. And the corporations holding the money become more powerful, being able to greatly influence the aforementioned mechanism of voting. It's a bad thing. A very bad thing and I'm very sad people are not more outraged about this.
I hear this all the time but I don't understand what hoarding means in this context. Surely you're not implying that the majority of any billionaire's wealth is just cash under their mattress? I'm fairly sure that most of any given billionaire's wealth is invested, often in equities or bonds. In that sense, they are letting others borrow their money and funding economic development. Same goes for money sitting in a bank that gets loaned out.
Why should I get a say in how a billionaire spends their money? That I don't get a say is a feature, not a bug, because the minute I get a say, someone else gets a say in my private affairs.
It highlights the notion that taxation policy is inherently amoral (or, more specifically, a patchwork of overlapping morality and ethical frameworks and the laws resulting from that multi-framework pileup; it's the ultimate sausage of the legal sausage-making process).
To highlight it, people highlight the hypocrisy of individuals using the law to minimize the money they pay out while criticizing corporations using the law to minimize the money they pay out. While you can argue there is a difference, doing so puts you in an ethical framework that not all people in the discourse might share.
Everyone tries to legally minimize the amount of taxes they pay, often resorting to procedures with names such as "backdoor ROTH" or "Mega Backdoor Roth IRA".
But when those same people see a company doing the same, they get pissed off and call it unethical, "not the right thing", etc.
TL;DR: companies are fighting for their interests, just like people are.
> The results of the 2016 election would tell me you are mistaken about the consensus of all those things.
What results are you talking about? That the candidate who was for all those things won the popular vote by an unheard of 3 million votes? That fact seems to back up the consensus :)
Consensus looks a lot more like 66% than squeaking past 50%.
You are vastly underestimating the number of Americans who do not think like you do. All other things aside, that's going to make politics (and the necessary work to change laws you disagree with) difficult.
Then you don't understand the word consensus. It's also interesting you quote the raw differental - "a two percent difference" sounds much less compelling.
> It's also interesting you quote the raw differental - "a two percent difference" sounds much less compelling.
I want to point out the nature of the arguments you are making here. Its either in deliberately bad faith, or you are genuinely confused about these things. The latter is ok while the former isn't.
Your comment in response to my statement about the consensus was to state that the 2016 presidential election indicated there was no consensus on these topics. Presidential elections are not a good way to gauge consensus on individual topics, and there have been many studies which have found the reason for choices weren't the issues I pointed out, but more racial fears of immigrants and minorities. I should have probably replied with this to your original comment.
Despite this, and unpopular candidates in both parties, the one that supported the issues I mention still won by 3 million votes. That is why I point to it as being "consensus".
Now, what you are doing, is to argue on the technical definition of consensus. Sure, that 2% differential does not sound like a compelling consensus if you ignore the context in which people voted. However, like I said, its still not the best way to gauge it.
A much better way to gauge consensus is by polling and here are the numbers:
Part of your argument is that a Presidential candidate receiving ~48% rather than ~46% of the popular votes cast (~29% vs 28% of eligible voters overall) indicates that there is "consensus" on three isolated elements of disagreement between the candidates/parties?
To me "consensus" requires something more like 90+% agreement if there are possibly valid arguments for the opposition. There's consensus that we stop at red lights. There's consensus that we wear coats outside on cold winter days. There's consensus that regularly smoking tobacco is harmful. There's consensus that the Earth is not flat.
IMO, there are strong arguments for a lot of things I believe in, but I don't assume/presume consensus on them and would not introduce a 48-46 or 29-28 finding as evidence of consensus.
ah, yes the popular vote. Let's let the massive population of california lead the way deciding the fate of the country and give it to the hands of a larger criminal.
1. Your time scale seems very off. The law rarely changes quickly.
2. None of these things have large scale social consensus, even where there are majorities.
The closest is legalization of pot, and it is in fact becoming legal where there is consensus.
But right now, surveys show only 62% of people US-wide support legalization of pot[1].
That's not social consensus of the kind that the law represents long term.
> Your time scale seems very off. The law rarely changes quickly.
Not true, especially in the US where it changes pretty quickly. Certainly quickly enough to close tax loopholes that are draining the Treasury.
> None of these things have large scale social consensus, even where there are majorities. The closest is legalization of pot, and it is in fact becoming legal where there is consensus.
You seem to have cut out the actual argument i made, which you are in fact proving:
1. The law in the US definitely does not change quickly, and you've cited nothing to say it does.
2. I cited these very statistics and explicitly said they are not the kind of level of social consensus that tends to change the law.
You have provided nothing to argue otherwise.
I can't tell whether you claim it is not becoming legal where there is large enough local consensus (which is definitely true, and supports my larger point).
Pick your favorite giant tech company. Guess what? Whoever it is has also used extreme tax-avoidance strategies. Apple, Microsoft, Intel, Netflix, Amazon, etc.
Why not? I've seen it asserted multiple times in this thread, by multiple people, that these tax strategies are an inherent bad, but I haven't seen explanation as to why.
Generally the way these constructions work is that they use local resources (infrastructure, public education, subsidies, etc) and pay zero to no tax on the usage of it. Google has a presence in both the Netherlands and Ireland but pays very little taxes in both (if not none).
Basically what google does here is avoid general taxes in multiple countries (with the structure mentioned they can pay almost none in other countries as well) and still have offices and people working there. You could argue those people get paid, but since most countries (at least in Europe) burden both the employer and employee with the cost of almost everything public, it is unfair to the employee to let the employer not pay taxes due on usage of the infrastructure and public works and let the employer (the corporation) take advantage of it. The American view (I get) is that you are on your own and should arrange this for yourself as well, but due to this requiring quite substantial resources to pull of, it is unbalanced in favor of the corporations. You might consider it fair if they pay taxes as soon as the money is transferred to a person, but due to these schemes it never sees the light of day in any of the countries it was transferred from and thus doesn't go where it was supposed to go.
There are methods for people to do this as well in the two countries in the system mentioned, but it is way more difficult in terms of effort required and gains gained and impossible if you are an employee and not an owner of a (one man) business.
I'm not sure where you're getting your information on how much tax corporations pay---Google paid 163.8 million Euros in 2016 (https://www.rte.ie/news/business/2017/1129/923762-google-ire...). That's nothing like "very little." The real issue people appear to have with it is that Ireland's tax rate is low relative to other countries, and they get to shift a lot of what some would consider taxable income generated in other nations to be claimed via their Irish subsidiary.
This could be "solved" either by Ireland increasing its tax rate or by other countries changing their laws to no longer allow for exfiltration of money to Ireland from their economies. But they won't do these things for their own (cross-national competition) reasons. Odd to blame the company when it's the countries that don't want to change, though.
You know how the left makes it hell for Republicans to go out in public around DC? Whichever group is mad enough, is going to start going after all these executives. It's going to get uncomfortable. Class warfare is coming and it's going to get nasty.
"Don't be evil" was always meaningless corporate spiel.
It's like "we value your privacy" or "all natural ingredients", it means nothing because you can define the terms anyway you like.
Defining meaning is really hard.
That's why English Common Law relies on precedence to fix details. "Codes of Conduct", mission statements and advertising are all just meaningless fluff because they are open to interpretation.
You cannot replace ethical with legal. We all understand its legal. But to post on a forum criticizing this is not a permissible action?, but some how supposed to bring the political class to change things...
Railroading people was legal too. So were many other heinous things. That should not stop people from expressing their distaste for certain "legal" practices.
What are we doing here, other than sharing opinions and arguments?
> The legal system should work to make ethical things legal and unethical things illegal.
As a blanket statement, not it should not. As a counterexample, consider that the whole purpose of the US First Amendment as regards speech is that it should not be illegal to speak, even if others don't like your speech (including because they think it's unethical).
As another counterexample, the war on drugs and alcohol prohibition are examples, in the US, of people trying to make unethical things illegal. The latter is widely accepted as a failure. I'm pretty sure that eventually the former will be too.
In general, trying to equate "I disapprove of X" and "X should be illegal" is a really dangerous tendency that comes and goes. It seem to be on the rise recently, unfortunately, at least in the US...
In my view drug prohibition is the attempt to make an ethical thing illegal.
You can still defend somebody's right to speak (from an ethical pov) if you don't like what they say. These things don't have to be easy.
I don't see what you're getting at. Laws are to govern things people should or shouldn't do - ethics are opinions on what people should or should not do.
Cheating on your spouse is not ethical but it is legal, would you argue for it to become illegal?
My point is that it is not a given that ethically dubious actions should be illegal. Furthermore, what is ethically wrong to some may not be so for others.
But if some one cheats in my family, I will use social shaming to put some heat on them. Our criticism on HN will not even have that effect, but its the closest thing to it.
That's all. My only point is, "its legal" is not a pass from being socially judged by us plebs.
I agree with what you are trying to say, but i must point out: this example may not prove what you think
"Cheating on your spouse is not ethical but it is legal, would you argue for it to become illegal?"
It was and is in fact illegal for many years precisely because people found it not ethical enough. In english common law, it was even a felony.
It is changing (and has changed in a lot of states) precisely because people are more okay with it than they were.
In practice, the legality of things is generally decided by the societal consensus around "ethical dubiousness".
In some jurisdictions in the US, I think it is still illegal to cheat on your spouse, or to knowingly have relations with a person that is married. I think it's a civil penalty, usually not criminal. e.g. The cheated-on spouse would have to file a lawsuit. I don't have anything concrete to cite, just vague memories of a few news articles in the past decade.
(I'm a lawyer licensed in 3 states, previously 4 :P)
It is definitely illegal in various jurisdictions, and even criminal in many.
It's also generally viewed to be no longer federally constitutional since the late 60's due to various supreme court decisions. As a result, most states have struck the laws down over time or repealed them (wikipedia has a map somewhere of this), so you generally only see it as a plea bargaining anymore. IE people will plead to adultery instead of a greater crime.
> Cheating on your spouse is not ethical but it is legal,
Not everywhere.
If you are in the U.S. military it's illegal and punishable under Article 134, with a maximum punishment of dishonorable discharge, forfeiture of all pay and allowances, and confinement for up to 1 year.
Depending on the state, again in the U.S., it can also be a crime. In Virginia it's a Class 4 misdemeanor according to Virginia Code § 18.2-365/ It's also grounds for divorce.
Well, criminal law is, for the most part, a representation of consensus around ethics. If everyone thought it was ethically cool to murder others, it would be legal to murder others.
It's true you cannot replace legal with ethical, but the above should tell you the reason why:
Your definition of what is ethical has not reached enough consensus to be legal/illegal.
It's fine to say others should have your moral values and have arguments why. But expecting them to and scoffing at them for not doing so is silly - this is literally the stuff that makes legality not black and white.
I don't think it's not permissible, but I think the burden of proof is on those who complain about a company's (or any person's, really) tax practices to clarify how it's unethical to read and follow the law.
It's legal (and therefore ethical?) to shame a large company into getting less advantage from doing something at which point they should use their lobbyists to make it illegal to do to protect themselves from competition. I don't think I'm as skilled as a paid lobbyist.
Making children work in sweatshops was legal... up until it wasn't. May I assume that every corporation and individual was obligated to work children in sweatshops up until it was made illegal?
This isn't the same thing. Also nothing is that simple.
The government is the people and the laws tend to reflect what they feel is acceptable because otherwise it would already be made illegal. Corporations are also these very same people and so they'll follow the same standards. I believe your issue has nothing to do with corporations but more about different cultures and values, and perhaps the efficiency of a government that can keep pace with the population.
Where is the difference that would allow us to condemn the companies for maximizing profits by use labor laws but not condemn them for maximizing profits using tax laws?
>Also nothing is that simple.
Yet the previous statement seemed to have been made quite simply, an idea that if you take advantage of any law in your favor, you cannot condemn someone who takes advantage of any other law in their favor.
> Where is the difference that would allow us to condemn the companies for maximizing profits by use labor laws but not condemn them for maximizing profits using tax laws?
Tax budgets have a direct effect on people, and for people who have to work for a living, while it appears to be taking money, it is equivalently taking their time, a fraction of their life.
There's an analogy, but it's a weak one. Again, money isn't people. Abusing labor laws gets people killed directly. Failure of a government to collect enough tax can get people harmed or killed indirectly, but it's the government's responsibility to set tax policy, not a corporation's.
It is not, however, a company's responsibility to build highways, or to figure out how to finance the building of said highways, or to set up and fund public education, or to hire and pay police, is the point. When it becomes a company's responsibility to do so, we march gleefully into one of several dystopian cyberpunk science fictions (pick your favorite) ;)
Companies, however, do take full advantage of the infrastructure built by the government using tax dollars, both directly and indirectly.
For example, Google takes advantage of government contracts and grants, paid for by taxes. They also take advantage of the highway, city, water, power, education, housing, copyright and trademark laws, unemployment insurance, and legal (that is, the court system) infrastructure largely built and paid for (directly, by grants, or subsidies) using taxes.
If I have to work 8 hours a day to make 6 hours of income because of tax, then 25% of the risk of me being killed in a day is because of the tax. Probably more, because the extra 2 hours of work will be while I'm more tired and will lead to me being more tired on the trip home than leaving after 6 hours of work.
You choose how to spend your time and if you spend it earning an income then you're taxed to pay for the other things that let society function so that you can do so. How much you earn in a given time is irrelevant.
> Yet the previous statement seemed to have been made quite simply
Exactly; OP makes a simple, matter-of-fact statement, and then proceeds to say "nothing is that simple" when they get challenged? Seems like a double standard to me.
Nobody said anything about being allowed to condemn them. You are free to do so.
The difference beyond people vs money is that a company with shareholders is not obligated to use child labor but is obligated to reduce tax expenditures. It's not simple because what do you consider more ethical? Tax minimization or hiring children to increase profits?
They're certainly not obligated to reduce tax expenditures. This is the commonly repeated falsehood that the fiduciary duty of a company to its shareholders obligates them to do anything and everything within the law to maximize profit - but that's incorrect. The fiduciary duty is much broader and can be respected while not blindly maximizing profit.
Sure best interests can cover a lot. However, using a well-known tax strategy that has its own name, is completely legal, has no risk, and can save billions for a multinational company worth over half a trillion is a sound business decision.
Not doing so would definitely be against the interests of the company.
Note that the loophole has been closed (no one new can use it), and all companies that use it today will be done with it by 2020. It's not just Google, but many multinationals. A list of those that use it is on Wikipedia[0]. AirBnb being one of those that use it.
Are we not allowed to criticize cheating significant others? Politicians who lie to their constituents? People who cut in line? Maybe we should just make all these things illegal, since that's the line we're apparently drawing.
Just because something's legal doesn't mean it's ethical.
You're completely right, of course. But it's still incumbent upon you to make a convincing argument that paying <arbitrary>% tax is unethical. And I'd say you have your work cut out for you. It's much less black-and-white than cases like cheating on a spouse, misleading voters, cutting in line, etc.
If I deduct a portion of my rent as a home office deduction and you don't because you either can't or didn't know about it, does that make my actions unethical?
Yeah, those were all "logical extreme" examples. My issue here isn't determining an appropriate level of taxation so much as OP's "it's legal, so it's ethical" justification.
I am open to the idea that Google is still paying an appropriate amount in taxes! Just not by that particular argument.
I don't understand. You're saying you didn't make that justification ("it's legal, so it's ethical") immediately followed by that statement, almost verbatim ("following laws is considered ethical").
Of course ethics are subjective. But voicing those ethics is how we arrive at a set of societal values in the first place! It's crazy to suggest that anyone complying with the law should be immune from criticism.
Law is the attempt at legalizing ethical principles. Quite often the laws fall short of the actual ethical consensus of the society due to the fact that the members of the society ultimately have little direct control over what laws get made and how those laws are enforced, for example:
federal judges are appointed, not elected.
most people aren't able to parse legalese enough to fully grasp the implications of a law they support.
laws often get passed by Congress people by virtue of some group with financial interests using their money to influence decisions, etc.
Very few people are pure deontologists. There are all sorts of cases of cases where people would say the ethical thing to do is to not follow a law.
And this doesn't even have to be because the law is "bad" per se; it can just happen that you're in a situation the law's framers did not consider or could not imagine.
But quite apart from that, there is a wide swath of things that are _legal_ to do but that one should probably still not do. And that's fine. We don't want to criminalize all behavior we disagree with, even if an overwhelming majority disagrees with it. This idea lies at the center of US First Amendment jurisprudence, for example.
If an overwhelming majority disagrees then it becomes law because the government represents the people. Failure to do so means there's a problem with the political system, which is what I said in my original comment.
This is not how the law works (or should work). For example, cutting in line is not illegal, despite the fact that people almost universally disagree with it. This isn't a failure of our political system: the social pressure to follow the norm works great, and we don't think people deserve to be put in jail for it.
Law is a tool to enforce societal norms — but it's not the only one, nor is it necessarily the best one.
> If an overwhelming majority disagrees then it becomes law
That depends. This is why we have things like constitutions and constitutional courts, to prevent certain things from becoming law even if an overwhelming majority thinks they should.
Of course if you're talking something like 99% majority, I agree. But even a 70% majority, which would generally be considered overwhekming, may not be enough today, in the US, to enact a constitutional amendment. You seem to consider this a bug. I consider this a feature.
But past that, there are things that overwhelming majorities disagree with _doing_ but still don't think should be criminalized. Again, First Amendment jurisprudence is full of examples.
But when it comes to the tax code, "ethical" is a lot murkier. The one piece we can generally agree on is you're required to pay what the law requires you to pay---no more, no less. Further ethical constraints and clarifications are forever up for debate.
To give a concrete example: is it ethically better for the government that spends as much as it does on military infrastructure to have more money, or the company that builds a search engine and a video-sharing service?
I'm not espousing a particular ethical view here; rather, I'm saying that laws are not our way of dictating ethics by fiat. If Google (or anyone) does something I feel is unethical, I reserve the right to criticize them for it — whether it's legal or not!
> Further ethical constraints and clarifications are forever up for debate.
Like pretty much any debate about ethics I would say.
When I do my deduction, you don't see me trying to make it look like going to the restaurant with my kids is a business expense. It would be possible to argue that it is actually a business expense, it would be legal to, but we can both agree that it's abusing the law and it wasn't actually a business expense.
This is the same, their office in Bermuda (if they even have a physical location there) aren't actually making $23B in 2017, that money was made in others countries, using peoples from theses others countries, using infrastructures from theses others countries, thus theses taxes have to be paid for this reason.
> you don't see me trying to make it look like going to the restaurant with my kids is a business expense
I've seen a company exec cheat on his wife with a paid hooker on a holiday to Hawaii make it a business expense (both paying the hooker and the holiday itself) and treating the hooker bad enough the company got sued for sexual harassment (because they paid the hooker, that means ... you can fill in, and no it doesn't matter if they "knew" they were doing it or not), AND not getting fired for it. And while this is a tax offense, the idea of him getting sued by the IRS for this is sadly almost absurd. They might do it if they catch him in a lot bigger problems as well, but not likely.
Purely coincidentally, currently in the newspaper, 72 year old millionnaire getting sued for running a company building luxury hotels, collecting unemployment, and charging a government-funded not-for-profit ~1 million euros for consultation services while not registering the income in his personal income statement for taxes. Ironically, this is happened 9 years ago and 7 months, so if the government made even a small error in this case it will be forgiven (which is a near guarantee).
Just because you consider something cheating doesn't mean everybody does, or even that it's a common view, or that it's a crime.
When I do my deduction, you don't see me trying to make it look like going to the restaurant with my kids is a business expense. It would be possible to argue...
In your example, while you can certainly argue that, I’d say there’s a not-so-negligible non-zero chance the IRS won’t see it that way and any potential risk/penalties don’t make the upside worth it.
Ethics are subjective and personal. Society agrees on most principles and these are what become our laws, but not everything (like cutting in line) is at a scale that matters.
In this case, society has agreed on tax laws that this is the right amount. You are completely free to suggest something else and get the support to change it. Tax laws change all the time and loophole has already been closed so it seems like everything is working as it should here.
> Society agrees on most principles and these are what become our laws
Not at all. Society can, and does, agree on all sorts of stuff without it becoming law. This is generally a very good thing, because criminalizing behavior, even behavior everyone agrees is not great, has significant costs. Sometimes those costs are larger than the costs of the behavior itself.
What you're describing is the scale of an issue and I would say that's 1 of 2 inputs into the overall equation: how many people agree and how many people does it affect.
This is simplistic. What if there was a loophole in the law that allowed one to not repay debt. Bankers will get that loophole fixed asap.
In this case saying its 'legal' misses all the processes, politics, lobbying, accounting firms drafting laws, ideology, tax havens, that are all in play to leave little 'loopholes' like this for selective enrichment.
Google and other corporate interests who benefit from these 'loopholes' saying 'this is legal' is understandable, but why should an individual say this?
How about employees allowed to sell their services to a third parties incorporated in low tax regions competing for their membership, which in turn then license it to employers, leading to reduced tax in their home countries? Why is this not a thing? If everyone did that the whole tax base would dissipate and destroy our current system, hence its now allowed, why is the exact same thing ok for corporations?
> What if there was a loophole in the law that allowed one to not repay debt. Bankers will get that loophole fixed asap.
Uh, no. It's called bankruptcy.
One view is that bankruptcy laws in the US created a powerful bankruptcy bar whose special interest in enriching themselves through consumer-friendly bankruptcy laws became more powerful and focused than the special interest of banks.
A bankruptcy is not a 'loophole' or benefit you can avail as a matter of course every year, but this misses the point. That was just an example, it could be anything, any 'financial innovation' not available to individuals.
Not precisely---most of the arguments I've personally seen on the topic (here included) boil down to "it's not fair they do that," with no clarification as to what framework of fairness the plaintiff is using. Because there are multiple non-overlapping frameworks of fairness in play.
The money in question here, for example, is paid by foreign citizens in non-US countries. How much of that money is owed to the US government, and why? How much owed to the nations from which those citizens hail, and why?
The perfect cop out if you're a multinational tax dodging company who has a veritable army of lobbyists ensuring the political and tax systems stay exactly the way you made them.
Not to mention that most of the people complaining about this are not complaining about the record profits fueling their 401K and IRA.
This is the biggest personal dilemma I face. Does it make sense to pay double for services from companies that aren't the big 5? Does it make sense to divest my retirement holdings from companies and indexes that have investments in the big 5? Will this just add new companies that will behave just as poorly? Am I better off trying to lobby my elected officials for change? I really have no good answer for this complex issue despite the fact that it bugs me and I think about it frequently.
By whose standard? I reckon not actively avoiding taxes is quite high up in most peoples list. Proclaiming the virtues of civic duty while still championing corporate tax avoidance rings very superficial to me at least.
By my standard because if you included my full quote you would see my blame included the government as well. Transferring more money from the corporation to the government doesn't magically solve anything.
I find it interesting that you see it as "championing corporate tax avoidance" instead of pointing out the failure of government to correctly control taxes. Perhaps we can debate how the money is actually spent on civic issues as that is probably more productive than who spends it.
Well, "Civic Duty" should be assumed to have a collective definition rather than some individuals selective thoughts. I think it's pretty clear that the sum of your posts in this thread isn't in line with that and it gives corporations the usual endless benefit of the doubt that's not afforded to the average citizen.
What's the collective definition? Following the law? Because that's what they're doing.
Paying taxes is not the failure of duty that I describe in a completely different story about San Francisco's problems, and paying more voluntarily is not the solution to it.
So please describe where exactly is the inconsistency that you claim is clear?
There's a world of difference between taking a tax deduction and actively setting up shell corporations to dodge taxes
Google could not pay taxes by giving their employees raises or bonuses, invest in infrastructure, donate it to charity, etc.Instead they stash it in the Caribbean.
I wouldn't care but their executives actively push a political agenda not inline with their actions which makes them rampaging hypocrites and thus open for criticism
> How do you arbitrarily determine which is which?
It's not arbitrary. If the primary purpose of an entity or transaction is to avoid tax, then its employment is likely to constitute illegal tax avoidance or evasion (the terms have distinct legal meanings but those are not very interesting here). Purpose is determined primarily by contemporaneous documentation.
Is there some interpretation involved? Yes, because just about any legal decision involves some interpretation and these matters tend to be exceedingly complex. By their nature, they usually involve some sort of subterfuge or concealment. But it's not arbitrary. There are laws and precedents that attempt to define exactly where the line is.
Here are some references that might help clarify further.
> Google Netherlands Holdings BV paid 3.4 million euros in taxes in the Netherlands in 2017, the documents showed, on a gross profit of 13.6 million euros
The Netherlands is an economy about the size of California, the reason Google only makes 13.6 million here is that they make the subsidiary pay a lot of royalties to a Bermuda Google entity, who probably bought these rights internally from the Google Corp for a price that was way too low. They can price these royalties anything they want, so it will always be an amount that leaves a maginal profit.
> This is legal.
Of course they say that, but it depends on many things, such as the fairness of their internal pricing. If those prices are not fair, the arrangement may not be legal.
These are not mutually exclusive thoughts. "The political and tax system that allows it" is often the product of lobbying funded by huge corporations in order to create massive loopholes. This allows them to pay what many consider to be an unfairly low amount in taxes.
It entirely allowed to both hate the tax system AND hate the corporate cronyism that created it.
Also your "if you blame the company..." scenario is, at best, a weak comparison. It would be akin to living and working in New Jersey, a highly taxed state, and instead shifting your assets to be taxed as if you live in Florida where there is no personal income tax.
Campaign financing is something that I agree with, if I can afford to help this candidate reach more voters, why not? There is nothing wrong in that. There is another, different discussion about what this money should be spent on, eg this candidate is great vs these other candidate is bad, but I don't see nothing wrong with giving money for a candidate campaign.
Lobbying is different, in most countries in the world this is called bribing, hence a factor in corruption.
A company dumps toxic chemicals into the air/water, and it results in horrible deaths and destruction to the environment which makes everyone's lives worse.
However, they've managed to do this in a completely legal way. Maybe they moved the dumping to a region without strong regulation. Maybe they found some legal loophole. Maybe they funded a politician's campaign who then carved out a legal loophole for them.
Would you still not blame the company or call their actions unethical in this case?
I personally would blame the company. I would consider their decisions unethical. I would also want to fix the laws so that I could legally hold them accountable, but I wouldn't absolve the company of responsibility until those laws were fixed.
How is tax avoidance all that different? Sure, it's not directly harming anyone. However, the lack of funding for the government means fewer social services and those services often are used to help people avoid horrible deaths (such as homeless freezing on the streets, veterans receiving medical care, or safety improvements to roads) and to improve the environment we live in (national parks, clean water initiatives, etc.).
You know why Somalia is messed up? No government to regulate dumping of toxic waste. Which means waste can be disposed off without it being illegal in Somali waters.
However this resulted in killing off all the marine life and fishes. So what do the fishermen do? Take up piracy!
It's not like the companies are not in politics these days. I rarely see laws, which are not made by lobbies representing the richest people in the world. Here in EU Monsanto lobbied a controversial regulation about a weedkiller ( RoundUp ) not a long time ago [1].
If we can't have non-corrupted politicians. Who should we blame then? Maybe the people that get most benefits from that fact. Like the top management level of those corps.
I agree that this needs to be fixed by our politicians, but the scale of the average person deducting their mortgage taxes is not in the same league as 23 BILLION dollars being sent to Bermuda.
I'm sorry, but this is the most stupid thing you could have said. The entire human civilization is based on following some "clear" rules, commonly known as law. If you disagree with the law, you fight to change it and in this case it did happen.
> If you blame the company for doing this then I expect that you also make 0 deductions on your personal taxes and pay as much as possible.
Yeah not the same thing.
The same thing would be for us to open a shell company in Bermuda, ask our job to pay us through there and use that bank account to pay for our local purchase.
The deductions we get are for a reason, as long as the reason apply, it's perfectly ethical to use theses deductions. Once you don't actually respect that reason, no it's not ethical to use theses deductions.
I knew some independent workers that went to restaurant and put that as a business expense to get a deduction. It was clearly not an actual business expense, we could argue that it was (well how could you have a business without eating?), but it was certainly not related to any business being done. The deduction would still pass, it would still be "legal", but it wouldn't be ethical at all.
When companies lobby for this, and come to "own" the respective governing bodies, people not only have the right but are being eminently practical in taking their concerns directly to those companies.
Society has already decided that "because I can" is not a universally acceptable reason or defense.
The (far) bigger point is that it's royally fucked up.
And that of course corporations are not even (remotely) comparable to individuals. When you and I are able to radically reduce our tax liabilities by shifting our assets to Bermuda (or anywhere else), then perhaps we can have a discussion based on appeals to individual responsibility.
But of course we can't. And that's why the state of affairs is royally fucked up.
That has yet to be determined. Tax law does recognize acts whose sole or primary purpose is to avoid taxes (i.e. not as a side effect of other business purposes) as evasion, and evasion is illegal. Just because such cases are very hard to prosecute successfully, and are rarely prosecuted at all for that or other reasons, doesn't make an illegal act legal.
> I expect that you also make 0 deduction
That's an incredibly shallow argument. Those who identify a problem don't have to be martyrs. In particular, those who identify inequity are under no obligation to increase it at their own expense before it can be addressed. I'll be glad to give up my exemptions when the tax code is fixed for everybody, not while others are still benefiting from its flaws.
Policy and decisions and personal benefit should be separate. We should respect those who will argue for a policy change out of principle, even when that means giving something up, and not demand that they give up more. The people we really shouldn't trust are those who never argue for a policy that doesn't benefit them. That's called corruption.
> The tax strategy, known as the “Double Irish, Dutch Sandwich”, is legal
Hey, at least it's got a fun name. I can't imagine anyone is too surprised by this. Personally I'm happy to pay my tax burden. I grew up in America, went to public schools and benefited from public services.
Corporate tax evasion like this seems like fixation on a local maxima. There's no way to account for the return on your mandatory tax investment, but their is a return and it's important for everyone.
Taxes are very similar to the Prisoner's Dilemma: for any individual it pays of to dodge taxes and hope everyone else pays, but when nobody pays everyone is much worse off than when everyone pays.
In theory this is solved by government action to make legal schemes illegal and prosecute anyone using illegal tax avoidance schemes. In practice lobbying against this is often cheaper than paying, so you end up with giant loopholes and defunded tax collection agencies.
At least this hole is getting closed, but that's a minor victory in the grand scheme of things
And most "tax avoidance strategies" (this one included) take advantage of the lack of one world government, and therefore lack of one global legal framework for "fairness" in taxation. So countries compete for business by offering different tax incentives, and companies move to find a balance between retaining as much money as they can and as much of the other things they need (like competent employees, which come from specific countries) as they can.
The problem isn't that these strategies are unfair; the problem is that authorities can't agree on a uniform concept of "fair" because it's in their best interest to get the most business in their territory. Prisoner's Dilemma again, in the opposite direction.
Keep in mind that the "evasion" in question is the US government trying to grab taxes on money paid to a company by foreign nationals in a foreign market.
It's unclear why that money would be owed to the US ethically. These companies are, ostensibly, already paying their fare share in payroll taxes, real estate taxes, sales taxes, commercial use taxes, etc.
> the "evasion" in question is the US government trying to grab taxes on money paid to a company by foreign nationals in a foreign market
It's not just this, It's also evasion of taxes that could've been paid in these countries. (Could've, because what they're doing is legal, so they have no obligation to.) What they do, is most easily explained with the Starbucks example:
Starbucks has one subsidiary, based in the Netherlands, that holds the rights to sell coffee with the name 'Frappuccino'. All Starbucks stores are owned by another subsidiary. Whenever a store sells a 'Frappuccino', they pay a $1 royalty on that name. Because royalties aren't taxed in the Netherlands, this $1 is pure profit.
This is from memory, so It's probably not completely right, but in the end they really do evade foreign taxes, not just a double tax in the US.
Correct. And they do so by working within the cross-national legal frameworks, and the Netherlands lets them get away with this because they want (to torture the analogy) the Starbucks subsidiary to be doing business at all in their country, and they fear if they started taxing name royalties Starbucks would pack up and leave, taking their franchise rights and the jobs they bring with them.
... and that's before we even touch on the ethical framework around which anybody gets to charge any taxes at all on "right to a name;" the companies we're talking about are already paying sales tax, real estate tax for land, payroll taxes, etc., etc., etc.
... it comes back to the ethics and morality of "Can you tax intangible goods" in the first place, and that's where things get really exciting. For what is the value of a piece of software, and how do you measure it? ;)
>It's unclear why that money would be owed to the US ethically
The company is headquartered there, the IP was developed there, the founders were educated there, the core technology that made their company possible was funded by US tax payers, the safe environment that makes business possible is secured by police and military funded by US tax payers, etc
These are all true things, and this is why the company pays all its domestic taxes.
When the company then goes on to do business in another country as well, where another nation is providing security, safety, infrastructure, perhaps a public education system that creates a workforce the company wants to invest in... How much does the company owe its home country?
If you graduated university, how much do you owe your alma mater in annual donations beyond what you paid for the diploma program? ;)
Intentionally trying to spur discussion/debate on this because I would like to learn some counter points.
I personally don't believe in corporate taxes. I can't imagine that any reasonably sized corporation would voluntarily forego effort to lower their tax burden considering the relatively low cost of a few accountants / accounting software. Because of that, I prefer a system where only individuals pay taxes.
Now, skipping the fact that my suggestion requires most countries to rethink their individual/person tax code regarding income, property, etc and speaking in a largely hypothetical sense - would abandoning corporate taxes for personal taxes not be easier to ensure that money gets back to the government? As a person it's much harder for me to lower my "profits" in order to dodge taxes. But as a company I can make myself 'break even' or just below it pretty easily.
I'd like to hear counter points to this because normally when I ask my friends the responses I get are more along the lines of "corporations are evil" more than "could it even work economically".
+1 to eliminate corporate taxes entirely. It's incredibly stupid to tax entities that creates jobs, products and services. Taxes only create unnecessary friction and strange side effects.
+1 to only have taxes at the individual level. Also, make tax a quadratic function instead of step function. Step function always leads to stupid / shady behaviors around the step points.
1. People should be motivated to work and rewarded for that.
2. Corporations should be motivated to provide goods and services.
3. Luck should be normalized
Corporations benefit and profit from municipal services, same as people do. Should they be able to use those services for free?
Kansas massively cut their corporate taxes in 2012, with the implicit promise that lowering taxes for "job creators" would pay for itself. The deficit for the state became so massive as their revenue dropped, that the state had to close education and other municipal services. [1] Kansas is now heralded as an example of how 'trickle down' economics of cutting taxes for 'makers' fails. [2]
That's exactly what it means. And if corporations can earn investment / passive income untaxed, then everyone would just keep their portfolios inside a corporation and draw salary for exactly what they need and nothing more.
You can already do this, but it would only result in being taxed twice—first when you earn your wealth as ordinary income or capital gains, then again when you draw the salary or dividends from the company. No such thing as a self-licking ice cream cone (without committing tax fraud).
ETA: Getting your employer to pay your company instead of you would be tax fraud.
Dunno about other countries, but it seems unlikely it'd be different unless their tax authorities were born yesterday. Then again, by US standards most other countries make tax evasion a national sport, so I guess it's conceivable.
So for instance in the UK you can have a company that pays corporation tax at 20%. If you don't pay yourself anything out of it, that's it. Why would you have income tax to pay?
The problem would then become people using their corporations to make all of their purchases. Their corporations would own their yachts, their houses, their cars, etc.
So as a person, any time you can utilize a corporation's resources without drawing income, you are cheating the system. This definitely already happens, but in your case it would go to another level.
>The problem would then become people using their corporations to make all of their purchases. Their corporations would own their yachts, their houses, their cars, etc.
>> The problem would then become people using their corporations to make all of their purchases. Their corporations would own their yachts, their houses, their cars, etc.
It's illegal if it's provably done for personal use. But when you have money, you can create a legitimate company with a legitimate reason to have a yacht. Perhaps the yacht is essential to your meetings with other high net worth individuals, to discuss important business. When your friends all have $10-100M, the lines between business and personal events are constantly blurred.
Take a real life example. Look at Bill Perkins. He live streams poker from his boat. The boat is essential for setting the atmosphere for the live stream. Look at Tai Lopez. He purchases / rents luxury vehicles and residences to portray himself as successful, which is important to his brand. So where do you draw the line?
The problem here is that individuals do not, for the most part, contribute very much in the way of direct tax receipts. The biggest direct tax receipts are from corporations, and for good reason: we decided that capitalism is the best way to organize our economy and private corporations would be the way people band together to engage in economic activity.
Corporations, then, reflect the combined, amplified economic output of private citizens. Which is why they must be taxed; for the same reason you would want to tax individuals.
That is the Why part. But you seem to be saying that because corporations will always find loopholes that we just give up. As long as the Government is nimble enough to discover these loopholes and close them, this becomes an un-economic endeavor. Which is why... Governments are good, and should be made as functional in these things as possible.
At the end of the day, it's a form of wealth distribution for the benefit of society (military, police, etc). If you cut corporate taxes, how do you compensate for that amass of wealth? Also remember that currently a company can "own" a bank account that people do tend to tap into for personal gain (although technically against the law). As a moderate, I'd only be open to removing business tax IF businesses are unable to own any profits. This basically just means the business tax gets effectively rolled into a form of personal income tax. I haven't thought about this before, so I'm not sure what the outcome could be.
Alternatively, there's the Henry George system which seems to be getting some interest again. My main issue with this system is that so much "goods" are virtual now being software and information... even virtual land has real value today. I haven't seen a good explanation of how Henry George's system of taxing the 'finite' resources could be adopted to our (still vastly growing) digital age and digital assets.
I'm fairly sympathetic to abolishing corporate taxes, since corporate taxes are a flat rate on all shareholders, and some of it even falls on workers, however...
Corporate taxes provide an additional incentive to reinvest the profits of your business, rather than just sitting on them.
They also allow national governments to extract tax revenue from foreign shareholders.
And it's that second point that is really the biggest deal, since a unilateral lowering of corporate taxes and replacement with income taxes may increase the tax burden on your citizens.
Ireland likes having a low tax rate because it has a comparatively low tax base and can incentivize these extremely large companies to pay taxes in Ireland, but as you can see, this harms the rest of the EU.
> I'd like to hear counter points to this because normally when I ask my friends the responses I get are more along the lines of "corporations are evil" more than "could it even work economically".
Corporations are not inherently evil, but any sufficiently powerful entity is in a good position to abuse its power (governments included). Would it really be a good idea to skew the system to benefit corporations over individuals even more, with all the rampant power abuse going on already?
The system you've described is massive, complex, subtle, and slow moving at the scale of the United States. Why do you think it's easy? Additionally, you seem to be implying that its being easy would somehow invalidate any criticism of any action taken within the bounds of legality. Can you elaborate?
Beyond the United States---these "tax evasion schemes" exist at the boundaries of international law. That's why they continue to survive despite lack of popularity among citizens---no nation wants to blink and close the loopholes, risking the multinational companies will pull up stakes and take their jobs and tax base to the "competition" (in this case, other nations).
Agreed. I wish we could somehow all work together to fix these things. And as a bonus, if corporations actually paid taxes in a more straightforward way, there would be less confusion and deception in political arguments about corporate tax rates.
This is called the Freidman Doctrine [1], and didn't exist until 1970. Before this stupid idea got popular, companies were actually concerned with how their actions impacted society. They weren't the souless profit-seeking machines you see today.
I never said the past was perfect – that's a strawman. But it's self-evident that companies on average used to think contrary to what Freidman was proposing. That's why he was arguing for it in the first place!
> Really? Seems like the past is ripe with abuses by corporations - pollution, child labor, tax avoidance.
And before the Friedman Doctrine, they could be more easily condemned for their lack of social responsibility without the constant refrains that the only duty a corporation is to make money for its shareholders.
How much a private company pays for infrastructure and protection has nothing to do with the Friendman Doctrine.
It has to do with the consistency of due process from the group demanding payment.
The only meme you presented was the idea that groups recognized as governments are a more respectable group to pay and secondly that their arbitrary levies are to be respected at any arbitrary amount. And that combination of ideas working together is pretty new, there is simply no reality to support the view of the world someone else convinced of when you were young. You can donate directly to the Treasury if you want to imagine more roads and schools are going to be built.
> The only meme you presented was the idea that groups recognized as governments are a more respectable group to pay and secondly that their arbitrary levies are to be respected at any arbitrary amount.
That's a pretty anti-democratic "meme." Some "governments are a more respectable group to pay" because they're the collective us, not some arbitrary other.
My understanding is that since 2018, tax deferral is no longer possible and all the offshore profit of US corporation has since been taxed.
Was that wrong?
Also my understanding is that even before, the income moved to tax haven was still subject to US corporate tax, though companies were able to defer taxation until it was repatriated.
this is an underappreciated point. to make markets more free and efficient, labor should have the same freedoms as capital. otherwise capital has an unfair advantage (on top of all the existing information asymmetries).
> as part of an arrangement that allows it to reduce its foreign tax bill
What this article and most of the discussion misses is that many of these tax havens are just better for business in ways that have nothing to do with taxes
As the article alluded to: PART of an arrangement
You have a catalogue of Cantonal systems, Confederacies, Federations where you can incorporate at the country level or an obscure state’s level (the US has no way to incorporate at the federal level), Segregated Portfolio Companies decades before similar entities were offered in more respected jurisdictions, useful Trust laws with no supranational government undermining them, useful information protection laws with no supranational government undermining them, and thats before we even touch on banking and brokerage services and free trade agreements
The ability to offer these without levying a lazy passive tax for the privilege or “protection” is just icing on the cake
The criticism here is that google's leaders and employees have explicitly advocated on behalf of and contributed to leftist causes, which promote the view that taxation should be greatly increased to decrease inequality, pay for government programs, or myriad other reasons. When Trump was elected, they had company-wide meetings concerning the sad state of the country, where melancholy leftists could vent their unhappiness (no such reaction greeted Obama's election). James Damore was harassed and eventually fired when he accepted the (fake) invitation to challenge "Social Justice" orthodoxy concerning gender. They didn't address his evidence, but rather went after his livelihood.
My point being: they are one of the richest companies in the world, committed to a leftist worldview. The fact that they do everything they can to funnel money away from the poor, downtrodden, socioeconomically-disadvantaged, marginalized, etc., which they so loudly proclaim "need our help!"---the word hypocrisy doesn't even cut it.
There's absolutely nothing hypocritical about it. The progressive viewpoint is that taxes should be higher, not that people should just be willingly donating way more money to the government.
This is not a will issue. It's not that against their will they're taxed. It's that they've successfully managed not to pay, contravening the supposed stance of the company.
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[ 2.9 ms ] story [ 245 ms ] threadI find it ironic that Google and Apple and FB have extremely well protected physical security surrounding their datacenters, but have trillions of dollars in assets in little Island banking systems which likely have few, and easily accessible, physical undersea cables providing their main services....
If you "transfer" billions of dollars to "Bermuda" or some such - where does that money actually reside? Wouldn't Bermuda have their financial systems hosted in, perhaps, Switzerland?
If you were to cut off internet to the actual island of Bermuda, what actual financial impact would it have on those funds.
Would they be effectively quarantined to Bermuda? Or are they just legally labeled as being under Bermudian financial jurisdiction in whatever financial cloud these DB fields physically live?
Internet access is just a convenience. Phone calls and faxes work fine and larger banks have private networks backed by fiber, microwave and satellite links. If that's all unavailable then records will be moved with the physical cash.
Stopping internet would do nothing. Stopping all digital access would slow down some transactions by hours or days. Stopping all physical and digital access would completely stop transactions but the rest of the global system will continue on and will usually cover for any problems.
So the worst you could is stop transfers for hours or days, and with this kind of money you'll end up facing military action aided by intelligence services that will want you locked up in a hole for a very long time.
edit: just to pre-empt any confusion, I'm not accusing you of wanting to do this. I'm just curious what you think someone interested in this would expect from it. Other than to bloody the noses of the elites and make them a little uncomfortable for a short period, I can't see any real impact unless an attacker goes further than DDOS or cutting cables (e.g. if they were to steal some of the money as well, or wipe records)
Attacking civilians is mostly pointless. Though, that’s also my view on terrorists so I don’t really understand the mindset.
They would have more luck by taking Larry Page hostage (and no, it wouldn't work either).
Edit: This would be specifically for individuals hiding their wealth abroad and declaring a lower than actual income, and not for corporations that publish their balance sheets.
The more interesting scenario would be a smaller government trying to embarrass or blackmail the US by doing something similar with THEIR military, and that's the stuff of James Bond movies. ;)
Number Two: In 1900, 90% of Americans were self employed; now it's about 2%." - Deus Ex
1. Women that were homemakers.
2. Men that worked in agriculture.
The extent to which chains/internet has elliminated these mom and pop stores is staggering... and also why there was so much "self-employment" back then
Disclaimer: I'm making an intelligent guess here; these views are not (AFAIK) backed by any study
To highlight it, people highlight the hypocrisy of individuals using the law to minimize the money they pay out while criticizing corporations using the law to minimize the money they pay out. While you can argue there is a difference, doing so puts you in an ethical framework that not all people in the discourse might share.
But when those same people see a company doing the same, they get pissed off and call it unethical, "not the right thing", etc.
TL;DR: companies are fighting for their interests, just like people are.
If there was a simple consensus on what the "right" thing to do was, that would be the law.
I'm sorry this just isn't true. There is a lot of consensus in the US about things:
* legalization of pot
* legal status for DREAMERS
* bigger taxes on corporations
And yet, none of these things (all of which poll very highly) become law.
What results are you talking about? That the candidate who was for all those things won the popular vote by an unheard of 3 million votes? That fact seems to back up the consensus :)
You are vastly underestimating the number of Americans who do not think like you do. All other things aside, that's going to make politics (and the necessary work to change laws you disagree with) difficult.
I want to point out the nature of the arguments you are making here. Its either in deliberately bad faith, or you are genuinely confused about these things. The latter is ok while the former isn't.
Your comment in response to my statement about the consensus was to state that the 2016 presidential election indicated there was no consensus on these topics. Presidential elections are not a good way to gauge consensus on individual topics, and there have been many studies which have found the reason for choices weren't the issues I pointed out, but more racial fears of immigrants and minorities. I should have probably replied with this to your original comment.
Despite this, and unpopular candidates in both parties, the one that supported the issues I mention still won by 3 million votes. That is why I point to it as being "consensus".
Now, what you are doing, is to argue on the technical definition of consensus. Sure, that 2% differential does not sound like a compelling consensus if you ignore the context in which people voted. However, like I said, its still not the best way to gauge it.
A much better way to gauge consensus is by polling and here are the numbers:
* 62% for pot legalization http://www.pewresearch.org/fact-tank/2018/10/08/americans-su...
* 66% support legal path for DREAMERS https://www.npr.org/2018/02/06/583402634/npr-poll-2-in-3-sup...
* 75% favor larger tax on corporations https://www.reuters.com/article/usa-tax/three-quarters-of-am...
That fails to match substantially any of the definition of consensus, IMO: https://www.merriam-webster.com/dictionary/consensus
To me "consensus" requires something more like 90+% agreement if there are possibly valid arguments for the opposition. There's consensus that we stop at red lights. There's consensus that we wear coats outside on cold winter days. There's consensus that regularly smoking tobacco is harmful. There's consensus that the Earth is not flat.
IMO, there are strong arguments for a lot of things I believe in, but I don't assume/presume consensus on them and would not introduce a 48-46 or 29-28 finding as evidence of consensus.
Do you believe Brexit was a consensus in the UK then?
https://www.wnd.com/2015/04/wall-street-analyst-uncovers-cli...
1. Your time scale seems very off. The law rarely changes quickly.
2. None of these things have large scale social consensus, even where there are majorities. The closest is legalization of pot, and it is in fact becoming legal where there is consensus.
But right now, surveys show only 62% of people US-wide support legalization of pot[1].
That's not social consensus of the kind that the law represents long term.
[1] http://www.pewresearch.org/fact-tank/2018/10/08/americans-su...
(I chose Pew since they are very independent, and for the record, i'm pro-legalization)
Not true, especially in the US where it changes pretty quickly. Certainly quickly enough to close tax loopholes that are draining the Treasury.
> None of these things have large scale social consensus, even where there are majorities. The closest is legalization of pot, and it is in fact becoming legal where there is consensus.
Again, not true:
* 62% for pot legalization http://www.pewresearch.org/fact-tank/2018/10/08/americans-su...
* 66% support legal path for DREAMERS https://www.npr.org/2018/02/06/583402634/npr-poll-2-in-3-sup...
* 75% favor larger tax on corporations https://www.reuters.com/article/usa-tax/three-quarters-of-am...
2. I cited these very statistics and explicitly said they are not the kind of level of social consensus that tends to change the law.
You have provided nothing to argue otherwise. I can't tell whether you claim it is not becoming legal where there is large enough local consensus (which is definitely true, and supports my larger point).
There are methods for people to do this as well in the two countries in the system mentioned, but it is way more difficult in terms of effort required and gains gained and impossible if you are an employee and not an owner of a (one man) business.
This could be "solved" either by Ireland increasing its tax rate or by other countries changing their laws to no longer allow for exfiltration of money to Ireland from their economies. But they won't do these things for their own (cross-national competition) reasons. Odd to blame the company when it's the countries that don't want to change, though.
If, on the other hand, a company is actually breaking international law, as Apple has apparently done (https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-i...), that's a different story altogether.
http://time.com/4060575/alphabet-google-dont-be-evil/
https://abc.xyz/investor/other/google-code-of-conduct/
If your master has no such Code of Conduct, then you have no such Code of Conduct when push comes to shove.
It's like "we value your privacy" or "all natural ingredients", it means nothing because you can define the terms anyway you like.
Defining meaning is really hard.
That's why English Common Law relies on precedence to fix details. "Codes of Conduct", mission statements and advertising are all just meaningless fluff because they are open to interpretation.
Of course, when you retire.....
Don't like it? Me either, but Google is still playing by the rules.
And EU tax laws aren't determined in Washington.
If you blame the company for doing this then I expect that you also make 0 deductions on your personal taxes and pay as much as possible.
This is legal. I can't fault them ethically for taking advantage.
What are we doing here, other than sharing opinions and arguments?
And it shouldn't have been.
As a blanket statement, not it should not. As a counterexample, consider that the whole purpose of the US First Amendment as regards speech is that it should not be illegal to speak, even if others don't like your speech (including because they think it's unethical).
As another counterexample, the war on drugs and alcohol prohibition are examples, in the US, of people trying to make unethical things illegal. The latter is widely accepted as a failure. I'm pretty sure that eventually the former will be too.
In general, trying to equate "I disapprove of X" and "X should be illegal" is a really dangerous tendency that comes and goes. It seem to be on the rise recently, unfortunately, at least in the US...
You can still defend somebody's right to speak (from an ethical pov) if you don't like what they say. These things don't have to be easy.
I don't see what you're getting at. Laws are to govern things people should or shouldn't do - ethics are opinions on what people should or should not do.
Am I missing something?
In RFC terms, laws are MUST and MUST NOT.
Ethics are SHOULD and SHOULD NOT.
There's a difference between those, even in RFCs. There is a similar difference in laws+ethics.
My point is that it is not a given that ethically dubious actions should be illegal. Furthermore, what is ethically wrong to some may not be so for others.
That's all. My only point is, "its legal" is not a pass from being socially judged by us plebs.
"Cheating on your spouse is not ethical but it is legal, would you argue for it to become illegal?"
It was and is in fact illegal for many years precisely because people found it not ethical enough. In english common law, it was even a felony. It is changing (and has changed in a lot of states) precisely because people are more okay with it than they were.
In practice, the legality of things is generally decided by the societal consensus around "ethical dubiousness".
It is definitely illegal in various jurisdictions, and even criminal in many. It's also generally viewed to be no longer federally constitutional since the late 60's due to various supreme court decisions. As a result, most states have struck the laws down over time or repealed them (wikipedia has a map somewhere of this), so you generally only see it as a plea bargaining anymore. IE people will plead to adultery instead of a greater crime.
(Yes, it's as weird as it sounds)
Not everywhere.
If you are in the U.S. military it's illegal and punishable under Article 134, with a maximum punishment of dishonorable discharge, forfeiture of all pay and allowances, and confinement for up to 1 year.
Depending on the state, again in the U.S., it can also be a crime. In Virginia it's a Class 4 misdemeanor according to Virginia Code § 18.2-365/ It's also grounds for divorce.
It's true you cannot replace legal with ethical, but the above should tell you the reason why:
Your definition of what is ethical has not reached enough consensus to be legal/illegal.
It's fine to say others should have your moral values and have arguments why. But expecting them to and scoffing at them for not doing so is silly - this is literally the stuff that makes legality not black and white.
Really it's about legality vs social aberrance. Which is not the same as ethics.
If you have a problem with these legal loopholes, go after your congressman.
The government is the people and the laws tend to reflect what they feel is acceptable because otherwise it would already be made illegal. Corporations are also these very same people and so they'll follow the same standards. I believe your issue has nothing to do with corporations but more about different cultures and values, and perhaps the efficiency of a government that can keep pace with the population.
Where is the difference that would allow us to condemn the companies for maximizing profits by use labor laws but not condemn them for maximizing profits using tax laws?
>Also nothing is that simple.
Yet the previous statement seemed to have been made quite simply, an idea that if you take advantage of any law in your favor, you cannot condemn someone who takes advantage of any other law in their favor.
Money isn't people.
It is not, however, a company's responsibility to build highways, or to figure out how to finance the building of said highways, or to set up and fund public education, or to hire and pay police, is the point. When it becomes a company's responsibility to do so, we march gleefully into one of several dystopian cyberpunk science fictions (pick your favorite) ;)
For example, Google takes advantage of government contracts and grants, paid for by taxes. They also take advantage of the highway, city, water, power, education, housing, copyright and trademark laws, unemployment insurance, and legal (that is, the court system) infrastructure largely built and paid for (directly, by grants, or subsidies) using taxes.
You choose how to spend your time and if you spend it earning an income then you're taxed to pay for the other things that let society function so that you can do so. How much you earn in a given time is irrelevant.
Exactly; OP makes a simple, matter-of-fact statement, and then proceeds to say "nothing is that simple" when they get challenged? Seems like a double standard to me.
The difference beyond people vs money is that a company with shareholders is not obligated to use child labor but is obligated to reduce tax expenditures. It's not simple because what do you consider more ethical? Tax minimization or hiring children to increase profits?
Not doing so would definitely be against the interests of the company.
[0] https://en.wikipedia.org/wiki/Double_Irish_arrangement#Multi...
Just because something's legal doesn't mean it's ethical.
I am open to the idea that Google is still paying an appropriate amount in taxes! Just not by that particular argument.
It's fine if you have personal ethics that are different, but that doesn't automatically apply to everyone.
Of course ethics are subjective. But voicing those ethics is how we arrive at a set of societal values in the first place! It's crazy to suggest that anyone complying with the law should be immune from criticism.
>> It's crazy to suggest that anyone complying with the law should be immune from criticism.
Never suggested this. My point was to focus on the root cause if you want to create change, regardless of why.
Law is the attempt at legalizing ethical principles. Quite often the laws fall short of the actual ethical consensus of the society due to the fact that the members of the society ultimately have little direct control over what laws get made and how those laws are enforced, for example:
federal judges are appointed, not elected.
most people aren't able to parse legalese enough to fully grasp the implications of a law they support.
laws often get passed by Congress people by virtue of some group with financial interests using their money to influence decisions, etc.
That's grossly imprecise. Laws do reflect some of ethical issues that exist in a society but these two are intersecting sets.
If you're a deontologist, sure.
Very few people are pure deontologists. There are all sorts of cases of cases where people would say the ethical thing to do is to not follow a law.
And this doesn't even have to be because the law is "bad" per se; it can just happen that you're in a situation the law's framers did not consider or could not imagine.
But quite apart from that, there is a wide swath of things that are _legal_ to do but that one should probably still not do. And that's fine. We don't want to criminalize all behavior we disagree with, even if an overwhelming majority disagrees with it. This idea lies at the center of US First Amendment jurisprudence, for example.
If an overwhelming majority disagrees then it becomes law because the government represents the people. Failure to do so means there's a problem with the political system, which is what I said in my original comment.
Law is a tool to enforce societal norms — but it's not the only one, nor is it necessarily the best one.
That depends. This is why we have things like constitutions and constitutional courts, to prevent certain things from becoming law even if an overwhelming majority thinks they should.
Of course if you're talking something like 99% majority, I agree. But even a 70% majority, which would generally be considered overwhekming, may not be enough today, in the US, to enact a constitutional amendment. You seem to consider this a bug. I consider this a feature.
But past that, there are things that overwhelming majorities disagree with _doing_ but still don't think should be criminalized. Again, First Amendment jurisprudence is full of examples.
To give a concrete example: is it ethically better for the government that spends as much as it does on military infrastructure to have more money, or the company that builds a search engine and a video-sharing service?
Like pretty much any debate about ethics I would say.
When I do my deduction, you don't see me trying to make it look like going to the restaurant with my kids is a business expense. It would be possible to argue that it is actually a business expense, it would be legal to, but we can both agree that it's abusing the law and it wasn't actually a business expense.
This is the same, their office in Bermuda (if they even have a physical location there) aren't actually making $23B in 2017, that money was made in others countries, using peoples from theses others countries, using infrastructures from theses others countries, thus theses taxes have to be paid for this reason.
This is what I consider unethical.
I've seen a company exec cheat on his wife with a paid hooker on a holiday to Hawaii make it a business expense (both paying the hooker and the holiday itself) and treating the hooker bad enough the company got sued for sexual harassment (because they paid the hooker, that means ... you can fill in, and no it doesn't matter if they "knew" they were doing it or not), AND not getting fired for it. And while this is a tax offense, the idea of him getting sued by the IRS for this is sadly almost absurd. They might do it if they catch him in a lot bigger problems as well, but not likely.
Purely coincidentally, currently in the newspaper, 72 year old millionnaire getting sued for running a company building luxury hotels, collecting unemployment, and charging a government-funded not-for-profit ~1 million euros for consultation services while not registering the income in his personal income statement for taxes. Ironically, this is happened 9 years ago and 7 months, so if the government made even a small error in this case it will be forgiven (which is a near guarantee).
Just because you consider something cheating doesn't mean everybody does, or even that it's a common view, or that it's a crime.
In your example, while you can certainly argue that, I’d say there’s a not-so-negligible non-zero chance the IRS won’t see it that way and any potential risk/penalties don’t make the upside worth it.
Ethics are subjective and personal. Society agrees on most principles and these are what become our laws, but not everything (like cutting in line) is at a scale that matters.
In this case, society has agreed on tax laws that this is the right amount. You are completely free to suggest something else and get the support to change it. Tax laws change all the time and loophole has already been closed so it seems like everything is working as it should here.
Not at all. Society can, and does, agree on all sorts of stuff without it becoming law. This is generally a very good thing, because criminalizing behavior, even behavior everyone agrees is not great, has significant costs. Sometimes those costs are larger than the costs of the behavior itself.
Either they abandon higher morals or decided to be in the same moral mud as Marck Z and facebook
In this case saying its 'legal' misses all the processes, politics, lobbying, accounting firms drafting laws, ideology, tax havens, that are all in play to leave little 'loopholes' like this for selective enrichment.
Google and other corporate interests who benefit from these 'loopholes' saying 'this is legal' is understandable, but why should an individual say this?
How about employees allowed to sell their services to a third parties incorporated in low tax regions competing for their membership, which in turn then license it to employers, leading to reduced tax in their home countries? Why is this not a thing? If everyone did that the whole tax base would dissipate and destroy our current system, hence its now allowed, why is the exact same thing ok for corporations?
Uh, no. It's called bankruptcy.
One view is that bankruptcy laws in the US created a powerful bankruptcy bar whose special interest in enriching themselves through consumer-friendly bankruptcy laws became more powerful and focused than the special interest of banks.
https://legacy.voteview.com/pdf/Berglof_Rosenthal_Bankruptcy...
Isn't that what people are doing when they point out the problems with it?
The money in question here, for example, is paid by foreign citizens in non-US countries. How much of that money is owed to the US government, and why? How much owed to the nations from which those citizens hail, and why?
This is the biggest personal dilemma I face. Does it make sense to pay double for services from companies that aren't the big 5? Does it make sense to divest my retirement holdings from companies and indexes that have investments in the big 5? Will this just add new companies that will behave just as poorly? Am I better off trying to lobby my elected officials for change? I really have no good answer for this complex issue despite the fact that it bugs me and I think about it frequently.
> some of the world's biggest companies which have absolutely failed at anything resembling civic duty.
https://news.ycombinator.com/item?id=18771628
I find it interesting that you see it as "championing corporate tax avoidance" instead of pointing out the failure of government to correctly control taxes. Perhaps we can debate how the money is actually spent on civic issues as that is probably more productive than who spends it.
Paying taxes is not the failure of duty that I describe in a completely different story about San Francisco's problems, and paying more voluntarily is not the solution to it.
So please describe where exactly is the inconsistency that you claim is clear?
Google could not pay taxes by giving their employees raises or bonuses, invest in infrastructure, donate it to charity, etc.Instead they stash it in the Caribbean.
I wouldn't care but their executives actively push a political agenda not inline with their actions which makes them rampaging hypocrites and thus open for criticism
I never argued it was illegal, I'm saying it's not ethical
It's not arbitrary. If the primary purpose of an entity or transaction is to avoid tax, then its employment is likely to constitute illegal tax avoidance or evasion (the terms have distinct legal meanings but those are not very interesting here). Purpose is determined primarily by contemporaneous documentation.
Is there some interpretation involved? Yes, because just about any legal decision involves some interpretation and these matters tend to be exceedingly complex. By their nature, they usually involve some sort of subterfuge or concealment. But it's not arbitrary. There are laws and precedents that attempt to define exactly where the line is.
Here are some references that might help clarify further.
http://taxexecutive.org/tax-avoidance-vs-tax-evasion/ https://www.lowtax.net/blogs/The-Basics-of-Tax-Evasion-Tax-A...
The Netherlands is an economy about the size of California, the reason Google only makes 13.6 million here is that they make the subsidiary pay a lot of royalties to a Bermuda Google entity, who probably bought these rights internally from the Google Corp for a price that was way too low. They can price these royalties anything they want, so it will always be an amount that leaves a maginal profit.
> This is legal.
Of course they say that, but it depends on many things, such as the fairness of their internal pricing. If those prices are not fair, the arrangement may not be legal.
It entirely allowed to both hate the tax system AND hate the corporate cronyism that created it.
Also your "if you blame the company..." scenario is, at best, a weak comparison. It would be akin to living and working in New Jersey, a highly taxed state, and instead shifting your assets to be taxed as if you live in Florida where there is no personal income tax.
I mean campaign finance reform is a topic people on both sides at least pay lip service to (or at least bemoan how the other side gets funded).
Campaign financing is something that I agree with, if I can afford to help this candidate reach more voters, why not? There is nothing wrong in that. There is another, different discussion about what this money should be spent on, eg this candidate is great vs these other candidate is bad, but I don't see nothing wrong with giving money for a candidate campaign.
Lobbying is different, in most countries in the world this is called bribing, hence a factor in corruption.
A company dumps toxic chemicals into the air/water, and it results in horrible deaths and destruction to the environment which makes everyone's lives worse.
However, they've managed to do this in a completely legal way. Maybe they moved the dumping to a region without strong regulation. Maybe they found some legal loophole. Maybe they funded a politician's campaign who then carved out a legal loophole for them.
Would you still not blame the company or call their actions unethical in this case?
I personally would blame the company. I would consider their decisions unethical. I would also want to fix the laws so that I could legally hold them accountable, but I wouldn't absolve the company of responsibility until those laws were fixed.
How is tax avoidance all that different? Sure, it's not directly harming anyone. However, the lack of funding for the government means fewer social services and those services often are used to help people avoid horrible deaths (such as homeless freezing on the streets, veterans receiving medical care, or safety improvements to roads) and to improve the environment we live in (national parks, clean water initiatives, etc.).
However this resulted in killing off all the marine life and fishes. So what do the fishermen do? Take up piracy!
Because that's what we are talking about there. 100 million gross and 3.5 million taxes is a drop in the sea compared to 22B gross.
If we can't have non-corrupted politicians. Who should we blame then? Maybe the people that get most benefits from that fact. Like the top management level of those corps.
1 : https://www.reuters.com/article/us-germany-politics-glyphosa...
Yeah not the same thing.
The same thing would be for us to open a shell company in Bermuda, ask our job to pay us through there and use that bank account to pay for our local purchase.
The deductions we get are for a reason, as long as the reason apply, it's perfectly ethical to use theses deductions. Once you don't actually respect that reason, no it's not ethical to use theses deductions.
I knew some independent workers that went to restaurant and put that as a business expense to get a deduction. It was clearly not an actual business expense, we could argue that it was (well how could you have a business without eating?), but it was certainly not related to any business being done. The deduction would still pass, it would still be "legal", but it wouldn't be ethical at all.
Society has already decided that "because I can" is not a universally acceptable reason or defense.
The (far) bigger point is that it's royally fucked up.
And that of course corporations are not even (remotely) comparable to individuals. When you and I are able to radically reduce our tax liabilities by shifting our assets to Bermuda (or anywhere else), then perhaps we can have a discussion based on appeals to individual responsibility.
But of course we can't. And that's why the state of affairs is royally fucked up.
That has yet to be determined. Tax law does recognize acts whose sole or primary purpose is to avoid taxes (i.e. not as a side effect of other business purposes) as evasion, and evasion is illegal. Just because such cases are very hard to prosecute successfully, and are rarely prosecuted at all for that or other reasons, doesn't make an illegal act legal.
> I expect that you also make 0 deduction
That's an incredibly shallow argument. Those who identify a problem don't have to be martyrs. In particular, those who identify inequity are under no obligation to increase it at their own expense before it can be addressed. I'll be glad to give up my exemptions when the tax code is fixed for everybody, not while others are still benefiting from its flaws.
Policy and decisions and personal benefit should be separate. We should respect those who will argue for a policy change out of principle, even when that means giving something up, and not demand that they give up more. The people we really shouldn't trust are those who never argue for a policy that doesn't benefit them. That's called corruption.
Hey, at least it's got a fun name. I can't imagine anyone is too surprised by this. Personally I'm happy to pay my tax burden. I grew up in America, went to public schools and benefited from public services.
Corporate tax evasion like this seems like fixation on a local maxima. There's no way to account for the return on your mandatory tax investment, but their is a return and it's important for everyone.
In theory this is solved by government action to make legal schemes illegal and prosecute anyone using illegal tax avoidance schemes. In practice lobbying against this is often cheaper than paying, so you end up with giant loopholes and defunded tax collection agencies.
At least this hole is getting closed, but that's a minor victory in the grand scheme of things
The problem isn't that these strategies are unfair; the problem is that authorities can't agree on a uniform concept of "fair" because it's in their best interest to get the most business in their territory. Prisoner's Dilemma again, in the opposite direction.
It's unclear why that money would be owed to the US ethically. These companies are, ostensibly, already paying their fare share in payroll taxes, real estate taxes, sales taxes, commercial use taxes, etc.
It's not just this, It's also evasion of taxes that could've been paid in these countries. (Could've, because what they're doing is legal, so they have no obligation to.) What they do, is most easily explained with the Starbucks example:
Starbucks has one subsidiary, based in the Netherlands, that holds the rights to sell coffee with the name 'Frappuccino'. All Starbucks stores are owned by another subsidiary. Whenever a store sells a 'Frappuccino', they pay a $1 royalty on that name. Because royalties aren't taxed in the Netherlands, this $1 is pure profit.
This is from memory, so It's probably not completely right, but in the end they really do evade foreign taxes, not just a double tax in the US.
... and that's before we even touch on the ethical framework around which anybody gets to charge any taxes at all on "right to a name;" the companies we're talking about are already paying sales tax, real estate tax for land, payroll taxes, etc., etc., etc.
... it comes back to the ethics and morality of "Can you tax intangible goods" in the first place, and that's where things get really exciting. For what is the value of a piece of software, and how do you measure it? ;)
The company is headquartered there, the IP was developed there, the founders were educated there, the core technology that made their company possible was funded by US tax payers, the safe environment that makes business possible is secured by police and military funded by US tax payers, etc
When the company then goes on to do business in another country as well, where another nation is providing security, safety, infrastructure, perhaps a public education system that creates a workforce the company wants to invest in... How much does the company owe its home country?
If you graduated university, how much do you owe your alma mater in annual donations beyond what you paid for the diploma program? ;)
When you put money into a 401k, that's tax avoidance.
I personally don't believe in corporate taxes. I can't imagine that any reasonably sized corporation would voluntarily forego effort to lower their tax burden considering the relatively low cost of a few accountants / accounting software. Because of that, I prefer a system where only individuals pay taxes.
Now, skipping the fact that my suggestion requires most countries to rethink their individual/person tax code regarding income, property, etc and speaking in a largely hypothetical sense - would abandoning corporate taxes for personal taxes not be easier to ensure that money gets back to the government? As a person it's much harder for me to lower my "profits" in order to dodge taxes. But as a company I can make myself 'break even' or just below it pretty easily.
I'd like to hear counter points to this because normally when I ask my friends the responses I get are more along the lines of "corporations are evil" more than "could it even work economically".
+1 to only have taxes at the individual level. Also, make tax a quadratic function instead of step function. Step function always leads to stupid / shady behaviors around the step points.
1. People should be motivated to work and rewarded for that. 2. Corporations should be motivated to provide goods and services. 3. Luck should be normalized
Kansas massively cut their corporate taxes in 2012, with the implicit promise that lowering taxes for "job creators" would pay for itself. The deficit for the state became so massive as their revenue dropped, that the state had to close education and other municipal services. [1] Kansas is now heralded as an example of how 'trickle down' economics of cutting taxes for 'makers' fails. [2]
[1] https://www.forbes.com/sites/beltway/2017/06/07/the-great-ka...
[2] https://www.washingtonpost.com/opinions/trickle-down-economi...
Which might mean nothing gets paid but a minimum.
ETA: Getting your employer to pay your company instead of you would be tax fraud.
Isn't that what people do if they are contracting?
So as a person, any time you can utilize a corporation's resources without drawing income, you are cheating the system. This definitely already happens, but in your case it would go to another level.
This is illegal.
> This is illegal.
Citation, please.
Take a real life example. Look at Bill Perkins. He live streams poker from his boat. The boat is essential for setting the atmosphere for the live stream. Look at Tai Lopez. He purchases / rents luxury vehicles and residences to portray himself as successful, which is important to his brand. So where do you draw the line?
Corporations, then, reflect the combined, amplified economic output of private citizens. Which is why they must be taxed; for the same reason you would want to tax individuals.
That is the Why part. But you seem to be saying that because corporations will always find loopholes that we just give up. As long as the Government is nimble enough to discover these loopholes and close them, this becomes an un-economic endeavor. Which is why... Governments are good, and should be made as functional in these things as possible.
Alternatively, there's the Henry George system which seems to be getting some interest again. My main issue with this system is that so much "goods" are virtual now being software and information... even virtual land has real value today. I haven't seen a good explanation of how Henry George's system of taxing the 'finite' resources could be adopted to our (still vastly growing) digital age and digital assets.
Corporate taxes provide an additional incentive to reinvest the profits of your business, rather than just sitting on them.
They also allow national governments to extract tax revenue from foreign shareholders.
And it's that second point that is really the biggest deal, since a unilateral lowering of corporate taxes and replacement with income taxes may increase the tax burden on your citizens.
Ireland likes having a low tax rate because it has a comparatively low tax base and can incentivize these extremely large companies to pay taxes in Ireland, but as you can see, this harms the rest of the EU.
Corporations are not inherently evil, but any sufficiently powerful entity is in a good position to abuse its power (governments included). Would it really be a good idea to skew the system to benefit corporations over individuals even more, with all the rampant power abuse going on already?
A fluid pipe line, perhaps. There are no ethics. Expect companies to do everything there allowed to. Disallow things you don't want them to do.
It's this easy.
It is far more complex including game theory and recognizing prisoner's dilemma in action.
[1] https://en.wikipedia.org/wiki/Friedman_doctrine
I think you need to take your rose colored glasses off.
I never said the past was perfect – that's a strawman. But it's self-evident that companies on average used to think contrary to what Freidman was proposing. That's why he was arguing for it in the first place!
And before the Friedman Doctrine, they could be more easily condemned for their lack of social responsibility without the constant refrains that the only duty a corporation is to make money for its shareholders.
It has to do with the consistency of due process from the group demanding payment.
The only meme you presented was the idea that groups recognized as governments are a more respectable group to pay and secondly that their arbitrary levies are to be respected at any arbitrary amount. And that combination of ideas working together is pretty new, there is simply no reality to support the view of the world someone else convinced of when you were young. You can donate directly to the Treasury if you want to imagine more roads and schools are going to be built.
That's a pretty anti-democratic "meme." Some "governments are a more respectable group to pay" because they're the collective us, not some arbitrary other.
Why exactly were laws invented?
> stupid
Elaborate.
Was that wrong?
Also my understanding is that even before, the income moved to tax haven was still subject to US corporate tax, though companies were able to defer taxation until it was repatriated.
https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St...
What this article and most of the discussion misses is that many of these tax havens are just better for business in ways that have nothing to do with taxes
As the article alluded to: PART of an arrangement
You have a catalogue of Cantonal systems, Confederacies, Federations where you can incorporate at the country level or an obscure state’s level (the US has no way to incorporate at the federal level), Segregated Portfolio Companies decades before similar entities were offered in more respected jurisdictions, useful Trust laws with no supranational government undermining them, useful information protection laws with no supranational government undermining them, and thats before we even touch on banking and brokerage services and free trade agreements
The ability to offer these without levying a lazy passive tax for the privilege or “protection” is just icing on the cake
No it's not.
It is, because I say it is and that's the game we are playing.
OK, I'll play.
....
Here's this 3000 page book, it says you own me 30% of what you just made.
Really, let me read it. No, it says I owe you nothing.
Really, OK, I suppose it does.
My point being: they are one of the richest companies in the world, committed to a leftist worldview. The fact that they do everything they can to funnel money away from the poor, downtrodden, socioeconomically-disadvantaged, marginalized, etc., which they so loudly proclaim "need our help!"---the word hypocrisy doesn't even cut it.
Thus the hipocrisy.
https://youtu.be/vayYdTU0FiA