America, and the world, should see everyone's tax returns.
What's the big secret? If you're proud of what you earn and the taxes that flow from that then show it. If you're not proud, then that should be exposed too.
This always gets trotted out by people who make good money and who's family and friends basically all make good money. It's like the personal finance instance of saying "I have nothing to hide so I don't need privacy".
I'd rather not have the in-laws knowing exactly how much I make or have my next employer know exactly how much more they're offering than the last one thank you very much. While I understand that in some countries tax returns are public, those countries are very different than the US in a multitude of ways (which are beyond the scope of this comment, I'm not going write a wall of text, those invite nit picking).
> I'd rather not have the in-laws knowing exactly how much I make or have my next employer know exactly how much more they're offering than the last one thank you very much.
But on the flip side, you'll know exactly how much your colleagues make.
By framing it as a flip side it sounds like two sides of a “fair” coin, but for the vast majority of people their relationship to their employer is one with a serious power imbalance.
You missed my point: the incentive to remove that balance already exists among workers (eg pay self-disclosure), but now companies know exactly how much you make. There’s no positive worker outcome to companies having that information.
> But on the flip side, you'll know exactly how much your colleagues make.
Can’t you also ask your co-worker if you care to know?
My thought is this also risks creating unnecessary resentment in the office. (Most people will react negatively finding out a colleague makes $10k more, even if that colleague has more years of experience - people don’t think about compensation rationally)
The reason I don't want to share my tax return is that it reveals my income. The last time I revealed my income it created a lot of negative relationships.
It could also be that Waterluvian had a low income and that affected his relationships.
Or it could be that it just differed in a direction (up or down) that his peers didn't expect or appreciate for whatever reason.
I can think of a lot of reasons revealing my income would affect various relationships I have (whether that's a good thing or a bad thing isn't relevant), even though I wish it wouldn't. Information about money does change the way people treat you.
When I was a kid, people knew my family wasn't doing so well and I'd get lots of well-intentioned charitable offers from friends and friends' parents that just made me feel really bad about myself, so there's one way that having a lower income revealed can affect relationships in an apparently positive way that's still uncomfortable.
I had coworkers that where hostile to the very idea of equality. Get paid the same as them? They were worth twice as much. Take a pay cut in exchange for some other bonus? They deserved the bonus more than you and they would get it without the pay cut (they didn't, especially not after trying to add their own terms to it). There was nothing positive to informing them of the pay of anyone else.
I make about the same as coworkers. About twice as much as my previous coworkers but I want them to know that they're wildly underpaid and lied to about what fair market value is.
No, in laws and neighbours. Mother in law assumed all tech is paid the sams: poorly. Because her son is paid poorly for his IT job. So when I bought a house that was significantly larger than hers, the relationship changed. She felt lied to all these years.
I also made the mistake of speaking to a neighbor forgetting that everyone comes from different walks of life. So my house that will be paid off in 7 years with one income was "a humble purchase" while my neighbor and his wife are apparently struggling to keep their house with two jobs. I felt awful about my misstep in words. Really a slap in their face.
This has been my experience as well. You learn quick to shut the fuck up about finances - _especially_ to friends and family. It taints relationships beyond repair. If you haven't make this mistake and read this comment, count yourself lucky and learn to shut the fuck up about it.
The only time I'm more open about finances is with people who I know are roughly equivalent to me or above, and usually we chat about expenses rather than income.
Although with those friends we've danced around the income part enough that we know the general income range of each other. I had a situation with work co-workers where we were all the same level and years of experience and we shared salaries, and people got a little salty over <$500 / yr differences.
I think complete fiscal transparency would be uncomfortable for a pretty short amount of time before people adjust to it, and the symmetry of information as a result would be extremely helpful.
People ask for a lot of fixes to say, pay inequality between men and women, but I think transparent salaries would go a long way and are a fairly simple mechanism. I have very rarely made the experience that pay inequality, if properly justified, was taken the wrong way.
Only if there's also transparent hours and risk factors accounted for.
Real life example: the male member on the cleaning crew was the only one certified for certain toxic chemicals -- because the women didn't want to be, even for the pay raise.
But if all you saw was the tax returns, you'd assume there was a wage imbalance.
Arguably, the entire "wage gap" is down to men working more, taking more risks, and being more forward negotiating; having more data sets that obscure rather than reveal that probably won't help -- we've known that the wage gap was a behavior gap since it was found, people just aren't honest about that.
I am currently working for a family owned business that is about 1.2 km away from my home. It doesn't pay as much as a larger publicly traded company would pay for my qualification and experience. If my potential new employer would know about my comparably low income, he will have a much harder time paying me significantly more or even just the usual market rate and negotiations would be that much harder. Due to other effects it could even lead to him questioning my competence, an often observed behavior. (there are other ways he could find out, but that is another discussion).
Frankly, I am not that interested in what others are payed. This is something I can negotiate with my boss myself and isn't my business for other people. And I don't want others to know about my income either. You can be sure that people will judge you by your income and feel superior if they make even 10 bucks more. Even your friends might get jealous about your income.
Some people see a value in discretion and some people do not. I belong to the former. There is just so much baggage attached to that shit that it isn't attractive to me at all.
I like the idea of full income and tax transparency for the reasons you mention, but worry that some of the negative consequences can be long-lived and very hard to tackle.
For modest earners, their public income can become a kind of super credit rating; it can gate access to some businesses and services, or establishments that want an aura of exclusivity, like social clubs. In effect it can make it harder to jump levels on the ladder.
For high earners, their public income can lead to gouging and an unwillingness to discount. A car dealership or a contractor might use it to gauge price sensitivity.
I'm sure there might be complicated social outcomes too. Would dating change in a world with transparent salaries? Would neighborhoods and neighborhood diversity? For the worse, or better?
Several countries have forced CEO pay to be published in hopes to guilt them into taking less pay.
In most cases it ended up skyrocketing as a result. CEOs could see exactly what every other CEO was on when negotiating. Meanwhile boards didn't want to pay under market rate and be blamed for cheaping out if things went wrong.
>Several countries have forced CEO pay to be published in hopes to guilt them into taking less pay.
That's the wrong intention and not what I described in my post. Maybe in those countries CEO salaries were non competitive or too low compared to the value that a CEO provides. I explicitly said that I see transparency as a mechanism to rationalise salaries, not make them more egalitarian everywhere.
But where I think it without a doubt will have an equalizing effect is between people doing equal work but being compensated differently. That effects ordinary workers more than extraordinary talent.
Great example. You do know that we can call our version of the IRS(Skatteverket) and simply ask for any persons taxes and find out how much they make? Including capital gains. All you need is their social security number (personnummer) which if you don't have you can also get from a different branch of Skatteverket! You simply need to narrow it down to a distinct person.
So since it shows you how much people paid in taxes, all the people who optimize their taxes properly look like they aren't making all that much, right? It doesn't seem as useful as people in this thread expect it to be.
Public companies? Sure. Private companies and individuals? No. They can have good reasons to keep their finances private. Just think about how much profiling will happen about a person if you were able to look up their finances first. This applies to job interviews, sales processes, etc.
But if salaries were transparent, there would be much less reason to beat about the bush regarding job offers - It would be quite clear what the going rate was, and how that related to executive pay, etc.
instead of mandating that the financial details of individual people's lives be public, why not just require companies to publish a mean and stdev for each position's compensation? seems like that's all you really need to figure out if you're getting a fair deal.
We have had this in Norway for decades already and it does not pop up as a problem the way you describe it. Part of that is because in addition to focus on transparency, we also promote privacy. Yes that may seem like an oxymoron, but here is a way to give you an idea:
If I ask for you credit history or how much you earn or make in taxes, then you will be informed by the government in letter form, exactly what information I was given about you, as well as my name and address.
That makes it a lot less attractive to snoop around in people's data. Hence in Norway it is mainly news organizations that do these kinds of things in relation to writing articles. Otherwise you make yourself look foolish.
Also it is a bit odd that Americans should be so concerned with privacy as you privacy laws are rather weak to begin with. E.g. unlike Norway you can administer drug tests to any employee in the US or do criminal background checks on all new hires. That would be highly illegal in Norway. Only business which can prove to the government that such checks are vital to the type of the business they do would be allowed to do such checks. E.g. working with children.
Basically the US focus its "privacy" laws on hiding information important to the wealthy, while those at the bottom of the latter have most of their sensitive information easily exposed.
upper middle class people are juicy targets, rich enough to get some profit, not enough to have proper security. what could go wrong exposing them all in a nice list, indexed and sortable, right?
Well, you can live in a not-so-affluent area and drive an average car and be very well off, as some people do to avoid attracting attention.
On the other hand, someone driving an expensive car is not necessarily well off, there are quite a lot of people living paycheck to paycheck that drive "expensive" cars.
> And so how are you then "at risk" if you live modestly, since there is little to rob?
I know a guy - we'll call him Mr. Frugal - he's worth, I'd estimate, $5 to $10 million based on what I know about his income and assets over the last 30 years (I know a fair bit to make that estimation). An old family friend, he's in his 70s at this point. He built his wealth from nothing, very slowly, and is a notorious penny pincher (the most extreme version of it I've ever seen). He lives in the same house he has owned since the 1960s; it's worth $150k-$175k today.
This man would be a very ripe target for any number of schemes. Targeting his bank accounts / investment accounts / personal identity, credit, and so on. That's entirely ignoring any kidnapping or blackmail type risks. It doesn't take more than a few moments of consideration to understand how his finances being made so public would make him a target for all sorts of criminals. That despite the fact that he lives very modestly and there is nothing in his home to indicate such wealth. His wealth is held outside of his home, and that's where you would target him. Frankly, given this is HN, I think it's pretty silly obvious that the physical contents of a home often are not the best target for thieves / criminals today.
They become millionaires and stay millionaires because they don't change their frugal spending habits.
Now certainly these people living modestly don't have assets at home that are juicy targets, but they would be juicy targets for kidnapping and extortion.
how unimaginative. it's the golden pot for identity fraud. it's a prime target for marketers and scammers. heck, even if you only disclose income data and tax paid, by the amount of tax deducted from the total and comparing it with historical data there's a good chance to figure out if someone had large medical expenses.
A full tax return contains a lot more information than a summary number (“what you earn and the taxes that flow from it”).
What benefit are we trying to achieve and how does applying that to most corporations get that? Saying we should have it for publicly traded companies makes a lot more sense than every private company let alone every person.
1) There are many people in my life who would make it much more difficult if they knew how much I make. I've kept it from them for a very good reason and they're definitely the kind of people who would just go and look that kind of stuff about random people they know. This would tell them how much I have in investments and property as well.
2) It would necessarily reveal far too much personally identifying information or not serve the purpose you'd want it to. If I had ran away from an abusive or stalking relationship, they could simply look up the state and municipality I pay taxes in, and what company I worked for, making it almost trivial to find me. This could also mean finding (and targeting) anyone that works for a certain company.
3) It would be far too easy for companies to use this information for any number of purposes. I'm currently getting a huge amount of mail about moving companies and brokers because my landlord publicly put my condo up for sale. It could get much worse than that.
4) If I'm the daughter of an extremely conservative family but I'm working at a strip club, even if I'm "not proud" of what I do that give no good cause to expose it to the world.
These are the situations from off the top of my head and already it would reveal far more information than I'm comfortable with. "If you have nothing to fear than you have nothing to hide" is never an appropriate excuse to curtail anyone's privacy.
4) If I'm the daughter of an extremely conservative family but I'm working at a strip club, even if I'm "not proud" of what I do that give no good cause to expose it to the world.
Why would "strip club" be exposed? Only the amount you make should be. Your arguments all seem rather selfish. I realise the proposal might be extremely uncomfortable for some, but consider the overall benefits.
Because the EIN is listed on the W-2, which is filed as part of the return.
And if you're going to reply that you meant some abbreviated form of the tax return, then:
The "what have you got to hide" class of arguments you're using to insist we expose an abbreviated version would also apply to expanding the abbreviated version to full disclosure. And you might be reasonable enough to stop, but that doesn't mean others will be.
People have strong motives to want to dig into political opponents or people they don't like, and we know from history the "what have you got to hide" question and friends are routinely used in trying to eviscerate 4A and 5A rights.
I see a case to opening up your tax returns if you want to touch/receive public (state) money under any shape or form. I mean if you're expecting everyone to contribute to your well-being then be prepared to offer something in return(s).
Taxable incomes which appear remarkably high for a young, attractive person who works an "evening shift" alongside their study course might be something of a giveaway
(And yes, people jumping to entirely the wrong conclusion is another potential issue...)
I'm sure they're resourceful enough they've figured out how to work around those problems, but wouldn't it be simpler to not create the problem in the first place?
Probably not, but these are not the only or even the most significant problems. Social control for example, belongs to the more important ones. Made easier (also their dark sides) especially in consensus-driven societies, most scandinavian countries adhere to.
Isn't social control exactly the intended goal? IMO this is the whole point of the article: If the public knows about Amazons tax returns, the expected result is public (=social) pressure against Amazon.
My answer went to the parent, not the article. The problem is another one in this case (privacy and her value). And in this context (mutual) social control has the mentioned dark sides, that should be considered.
Most of your points are strawman arguments to be fair. People complicate these matters far more than they actually are. How do I know?
Because what you pay in taxes has been public information in my home country Norway for many decades. None of the problems you mentioned have been an issue.
As hard as it may seem, Norway values BOTH transparency AND privacy more than the US. So there are lots of laws which protect your privacy.
1) It does not state HOW you make your living. Just roughly how much you pay in taxes and how much you earn. The details are left out.
2) There are always systems in place to help protect citizens with special needs for more privacy.
3) Companies in Norway cannot pass around information about you to each other or store information about you it does not strictly need. It is not like the US where companies can en masse huge amounts of data about customers and sell it to each other. Information gathering for commercial purposes is quite restricted.
4) As a rule in Norway, you are informed about people obtaining information about you. E.g. if a company does a credit history check on me, I will get a mail stating exactly what company credit checked me and word by word, what information they where provided. The credit check info leaves out a lot of the details that would be available in the US.
Same goes if somebody checks your taxes and income. You are informed of who makes the check and what info they have been provided.
I hope this gives an idea of how you can in fact embrace greater transparency while at the same time promote stronger privacy laws.
I can remark that Norwegian politicians and CEOs are among the lowest paid in the world despite Norway being among the richest countries in the world. I think our long tradition for transparency is a contributing factor to that. Not so fun to be greedy when it is obvious to everyone.
What’s the best way to provide oversight for the IRS? There should be some openness just to verify that they are doing their job properly. I don’t deny the privacy issues but there is this intensely powerful federal agency that it’s nearly impossible to have real oversight for.
Most of your examples also seem to impact those that present differently than they really are, I’m not saying that that’s not a valuable ability but it’s interesting. I wonder how much of our current political situation is due to believing or rejecting how others present...
I'd like to see every mention of companies in the news to include the amount of tax they paid in the last year. So in this case "blah blah blah Amazon($0)".
How do you propose to calculate that number? Take it from the SEC filing? Do you suggest that has explanatory power? A labor intensive business with low margins (say, a grocery) is likely to report low contributions, even though their actual social contribution is high (payroll taxes, employing people which allows them to consume further...)
I seem to remember Barclays saying they'd paid X amount of tax (it was a lot). Turned out it was the tax that employees had paid.
Fair enough, those people depended on Barclays for their livelihood but not quite what people have in mind when they think about the amount of tax a company pays
Anyway, you can just imagine how companies would use that figure rather than corporate taxes
UK public has lots to be furious about. it won't make one iota of a difference though.
EDIT: global corporations are gods in the UK and effectively above the law
I think the old concept of nation, where a government holds power, is dwarfed by globalised corporations. something needs to happen for people to get sovereignty back from corporations. not sure what though
We need some way of computing that number. Different businesses have vastly different structures. Let’s take the flip side of your argument: is it unreasonable for a labor intensive business with low profit margins (classic example is a grocer) to point out how much they contribute to the Treasury directly and indirectly through employment? Why is income tax special?
Income Tax is not special but it refers, by and large, to a tax on the profits of the company.
In general, people get annoyed if a company is extremely successful and contributes little in the way of direct taxes.
Companies like Amazon benefit massively from all the tax (infrastructure, education, etc ...) that is paid by other companies and by citizens, yet contribute little directly.
Perhaps, it would be possible to list both separately rather than amalgamated together.
A final point is that, to a greater or lesser extent, big companies must have employees but seemingly get to choose the level of taxation they pay.
They just get a rebate on R&D hours invested just like every other company that does software/hardware engineering. People bitching about this should look into their own company's finances because I can almost guarantee their company is filing for that credit.
The problem is that we use the tax code as a carrot/stick to cause people and companies to take actions that we want to see. Want a company to donate to charity, or use carbon-neutral energy, or invest in R&D, or take on debt with interest to grow? Tax rebate! But then they do those things and pay $0 in taxes.
>
“We pay every penny we owe in corporate taxes including $2.6 billion over the past three years,” Amazon said when reached for comment. “We’ve invested $270 billion in the US since 2010 and created more than 275,000 jobs.”
Does "every penny we owe" mean what a layperson would think, or does it mean their lawyers used every weird loophole they could find to make sure they "owe" nothing at all?
The second part of the quote is irrelevant. It's nice that they're creating jobs, but they're only mentioning that to essentially bribe us into accepting being swindled out of money they owe. Just pay your taxes!
Built into that meaning would be an incorrect understanding of the tax code, which I think one can say is purposefully being leveraged in PR statements like this. Which is to say they are purposefully being misleading.
For PR it works sufficiently as is. My criticism of the statement is not in its effectiveness and I don't think any resolution of my criticism would allow them to keep the original goal of the statement.
How is an "incorrect understanding of the tax code" built into that statement? Are you saying that the average layperson doesn't understand the numbers shuffling that goes on to get the biggest deduction? All tax preparation advertisements I see on TV tout their ability to "get you the biggest refund". Why would it not be a safe assumption to apply that same thought to corporate taxes?
Because when people interpret some behavior being done to the legal extent possible, on average they will do so with a poor understanding of the law and their interpretations will assume behavior which is in line with how they think the law works, not how it actually works. While this is their own misunderstanding, it is common enough and exploited purposefully enough that I don't think one can just declare Caveat Emptor (assuming that to buy into something is also a valid translation, which is probably isn't).
The investment and jobs they produce clearly contribute directly and indirectly to the treasury, so commenting that when asked about an alleged failure to pay one specific kind of tax sounds relevant.
You say “just pay your taxes”. What is the amount at which you would believe they are doing just that? What is the standard for which someone who we think isn’t paying their taxes should have their tax returns publicized? (I say punlicized because the IRS already has a mandate to audit, and Congress has statutory authority to request them, so presumably what’s left is publicizing them? I appreciate that’s not what you said though :-))
It would be also nice to know how much that $270 billion investment cost the tax payer. Only earlier this year an attempt by Amazon to build new headquarters in New York fell through because it hinged on a $3 billion tax break and allowing them to bypass local processes.
It hinged on tax breaks that, as I understand things, are overwhelmingly available to any other business seeking to locate/expand in the jurisdiction. It seemed like only the real estate portion was project-specific (and is likely to be offered to the next user as well).
Many of the candidates are US lawmakers. Have they attempted to acquire the tax return? They’re statutorily entitled to it, and the case for a “legitimate legislative purpose” (“the tax code sounds messed up and I want to fix it”) is much clearer than it was when Congress exercised the same right to attempt to acquire Trump’s tax returns.
If they haven’t, this sounds like pandering. But hey, so’s “let’s axe student debt” instead of the obvious “let’s 20x Pell grants”, so...
One of my least favorite politician games is when they're grandstanding about some problem and demanding some new power to address the problem, when they are already empowered to address the problem somehow. The administrative agencies are particularly prone to this; many of them have quite surprisingly vast powers, but will then claim helplessness in the face of some particular problem unless they're given even more. But you dig in, and while perhaps maybe the exact thing they're asking for is out of their power, they've got several other options for fixing the problem... if "fixing the problem" was their actual priority.
But legislatures play this game plenty too.
(And that's not even mentioning the cases where they created the problem in the first place.)
Agreed, and I think it’s even worse here: Bernie Sanders is saying he will do a thing that is explicitly his job as a Senator and explicitly not his job as President!
The cost of college/university is outrageous, especially for the return on investment for many questionable degrees (questionable in the sense of market demand).
We should funnel many more students into vocational schools where they’d contribute more to society (by not having to revert to waitressing as fall back). They could be nurses, welders, HVAC, etc earning good money. But no, we have many many people regretting their majors and many disillusioned with the job prospects of their peripheral majors.
My pet peeve is the attention elite private schools get. They represent a very small fraction of all students. We should instead ensure state schools remain affordable but also ensure that grades mean something and not everyone “deserves” acceptance. We should push people who don’t fit in academically into vocations rather than string them along and have them fail in a career.
Yeah, sorry, the Pell grant thing was out of frustration and not a fully baked policy suggestion. As a regular at our local hackerspace, which has woodshop and welding and electronics and.... yes, I very much wish vocational skills had no stigma :)
That goes both ways, though. Apparently, most corporations are against the right to privacy ... until somebody wants to see how many tax loopholes they've used (and how much money they gave to politicians to create them).
Privacy for a corporation itself isn't applicable and really somewhat oxymoronic given corporation transparency requirements. Fundamentally they must be owned and managed by someone else with stake in it. Heck, income and tax information aren't even guaranteed as having a right to privacy for humans.
For corporations investors need to be able o be informed about their business operations - it is what separates it from a scam and prevents the investment system from collapsing as it would if there was nothing stopping anyone from just taking the money and running off with it.
Earning and tax information wouldn't make sense as private.
That doesn't mean that employees and customers have no right to privacy because of a corporation. Just like how states don't have rights but the people making them up do.
Should we then require restaurants to install cameras to make sure waiters/waitresses are fully reporting their paper tips? Seems to me that fits within the category of tracking business operations.
Taxes should not be decided through a popularity contest and enforced through the court of public opinion.
After the financial crisis, bankers were unpopular, so politicians in the U.K. curried favour with the public by bringing in a banker bonus tax.
Tech companies were once the pride of the nation in the U.S. and the notion of creating tax incentives for tech investment in the U.S. was highly popular. Nowadays, they are no longer popular, so there is now a public outcry for taxing them more.
Tax can't be like that, because investments don't go to where there is a lot of uncertainty.
I do agree that Amazon not paying any tax is an indicator of a broken system that needs fixing. But politicians coming out and saying "I'm going to tax Amazon" is not right either. They should say what the system should be, bring it in, and then stick with it, making sure there is proper enforcement.
They can't just come out during each electoral cycle and say "This year, we like Tesla, so whatever system doesn't have Tesla paying any taxes, that's the right system. And this year, we dislike Amazon, so whatever system levies a lot of taxes on Amazon, that's the system we're going to have. Not sure if the same will still be true next year, but we'll cross that bidge once we get to it."
Really the aspect which taxes in theory should be "biased" towards is accounting for externalities positive and negative. If mines, banks, or any other industry risks needing expensive public remediation they /should/ be taxed more than mere profit margins. If they cannot afford it - well that is the point neither can we. In practice it is a complete mess of special interests paying money to insist that the government's highest priority should be getting people to drink more Ovaltine.
The issues of that tax code are systemic but that level of abstraction is seldom understood.
Well: The bonus tax wasn't actually a tax on the amount of risk-taking that a bank was doing (with the understanding that some of that risk would land on the government balance sheet because of the too-big-to-fail effect). It was neither designed to be that, nor was the income that the exchequer earned from that in any way related to what it costs the government to cover that risk. It could be argued that by discouraging remuneration models whereby decision makers share in profits (and therefore also in downside risks), this tax might have even had the opposite effect of increasing risk-taking by increasing moral hazard.
So, really, what it was was plainly and simply: "Here are a bunch of people who are disliked by the majority of the electorate. Therefore, let's have them give us some money."
America won't understand Amazon's tax returns. Between the vast bulk of people who simply won't understand them, and the small-but-loud minority of people who will be loudly misinterpreting them (in many cases, deliberately), I don't see this being helpful. It amounts to people asking for a platform to demagogue from. The amount of data we have now is really plenty to do the job. It's up to the professional legislators to figure out how to fix it.
I agree, transparency is bad and people shouldn't have information if they don't understand it. Also people shouldn't have information because they might misuse it.
The thing is fringe elements will abuse this and misrepresent. Just as on the right statistics will be used to misrepresent crime and such so that now many news orgs omit certain aspects of perp information so as not to contribute to that phenomenon.
Was Edward Snowden wrong to expose pervasive spying from the government? That was, in fact, the government's argument regarding the leaks being damaging to national security.
This is a delicate thing. This kind of high level whistleblowing is necessarily frought with peril.
It has to be one of those things that do knowing you’re sacrificing everything. Like being a deserter or being a double agent. Your belief has to be high and you should be willing to take the repercussions as a patriot. Not too dissimilar from being a colonial revolutionary.
But you're not asking for sunlight. You're asking for a spotlight. That's what people are saying causes the problems.
If you were asking for sunlight, and everyone's tax returns would be opened for public scrutiny, that would be one thing. But you are choosing a sub-group, and saying, "No, we only want to drag your tax returns out into this spotlight." That's a totally different thing, and that incentivizes a completely different set of behaviors game theoretically speaking.
Actually, if you carefully re-read my post, I didn't say it "shouldn't" be released. I just said it won't do any of the good things people are hoping the release to accomplish.
It may do other good things, but only after a period of substantial demagoguery and incomprehension.
>It amounts to people asking for a platform to demagogue from...
Well, that's true. If we could count on well reasoned analysis from all concerned, that might be one thing. But I think we all know that likely won't happen. It rarely does with anything actually. And policies based on sound bite scapegoating are rarely a good idea either. Witness, the drug war.
Probably best for congress to just do their jobs, look at every tax return in corporate America, and recommend and make regulatory changes where appropriate. No real need for grandstanding, it wouldn't be helpful. The grandstanding might actually hurt in this case?
It doesn't matter whether they will understand it. I'm sure the next future leaders in college may be studying tax codes and their effects and would benefit from learning based on what is happening in practice. Maybe there are some Algorithms that have not been invented yet that could find better ways to adjust our tax code and arguments need to be made with evidence.
Free Markets, Liberal Democracy means freedom of exchange of information. We're not talking about National Security Interests here.
The President does not set tax policy. The legislature does, and many of these candidates are lawmakers.
But in the recent debates we also discussed if candidates would prosecute Trump after he’s no longer a sitting President, apparently conveniently forgetting that it’s the DoJ, not the President, who decides who to prosecute.
> But in the recent debates we also discussed if candidates would prosecute Trump after he’s no longer a sitting President, apparently conveniently forgetting that it’s the DoJ, not the President, who decides who to prosecute.
You’re mostly right on tax policy, though a lot of tax policy is set by guidance on and interpretation of the statutes, which the President can influence since Treasury is part of the Executive.
On the other hand, if we set aside the politics of prosecuting an ex-President for a moment (that debate could go on and on), the DOJ is part of the Executive Branch, and the Attorney General is appointed by the President. It would be in those candidates’ power to set that prosecutorial agenda for the DOJ if elected.
That’s true! But just so we’re on the same page: both of those things are general guidance and emphasis, but specifically not “go audit/prosecute this list of political enemies”, which is why I think any candidate that would have answered “I intend to uphold the rule of law and therefore the question is abhorrent” probably would’ve gotten my vote.
(Finally, I’m guessing we also agree that we’re not an statute interpretation or a regulation away from Amazon paying, let’s say, 10% of their SEC-reported profits in taxes.)
> both of those things are general guidance and emphasis, but specifically not “go audit/prosecute this list of political enemies”, which is why I think any candidate that would have answered “I intend to uphold the rule of law and therefore the question is abhorrent” probably would’ve gotten my vote.
Sure. But that’s a political judgement, not a statement about the actual powers of the Executive, which is what you were talking about above.
It’s within the President’s power to instruct the AG to pursue a particular case, and if the AG refuses then the President may replace them. Whether or not that’s appropriate, politically tenable, or might expose a President to action by the Legislative Branch, is a totally different question.
Sure, yep, you’re right, no argument here, I was definitely muddling the line between what the president can do and what they can probably get away with. “Launch nukes” is probably another example in that category. Thanks!
The tax code is not Amazons problem. They are legally obligated by their shareholders to make the biggest profit possible, likewise every other business.
people should be protesting congress, not Amazon, this constant red herring is ridiculous, Amazon, like every other business is trying to compete and will pay as little taxes as possible. Tell congress to change the rules and all businesses will play by better rules.
any other conversation about the meaning of Amazon paying the tax they have to I believe is a waste of time, both parties are guilty and the citizens are guilty for not protesting congress.
Very interesting link. Here is the part relevant to this discussion:
"Third, corporate directors are not required to maximize shareholder value. As the U.S. Supreme Court recently stated, "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." (BURWELL v. HOBBY LOBBY STORES, INC.) [1] In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders. Usually maximizing shareholder value is not a legal obligation, but the product of the pressure that activist shareholders, stock-based compensation schemes and financial markets impose on corporate directors."
The context of the quote from [1] is also well worth the read, in my opinion:
"While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits. If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well.
HHS would draw a sharp line between nonprofit corporations (which, HHS concedes, are protected by RFRA) and for-profit corporations (which HHS would leave unprotected), but the actual picture is less clear-cut. Not all corporations that decline to organize as nonprofits do so in order to maximize profit. For example, organizations with religious and charitable aims might organize as for-profit corporations because of the potential advantages of that corporate form, such as the freedom to participate in lobbying for legislation or campaigning for political candidates who promote their religious or charitable goals."
While I understand your point in misconception 3 and it is salient, I suspect if Amazon acted in a way where no one could understand their strategy to be profitable it would have serious challenges in execution, implementation and most important 'trust'. I use scare quotes here because trust is very hard to build and if the business as a whole appeared to act in an 'irrational' (read not in a way to maximize profits) I would expect investors money to leave as well.
while the law changes over time I expect a business, organization, organism, etc to act in its own self-interest to survive in the best means possible. If Amazon is following the current tax law (I assume the answer is yes here) then every business is doing the same and will protect its profits in the name of competition. I feel the only solution here (if Amazon not paying taxes is a problem) is to go to the people who design these laws. In my opinion if we were playing a board game and Amazon was a player, they are playing by the rules and our issue is truly with the people who made the laws/rules and not with the player itself, if a board game had loop holes they would be abused (and often are) and the solution is not to point and blame the player, it is to communicate with the game creator and advise on why their rules/laws are not fair to begin with. I am pointing at Amazon because this article is about Amazon, however every business(player) is guilty in acting in their own best interest, guilty of trying to survive and win.
I find this really infuriating to see some of the comments below that appear to deliberately put words in my mouth or opinions and miss the point of my argument and I hope more people will review Paul Grahams Hierarchy of Disagreement. essay. While it is not perfect I do believe it is a step in the right direction.
I find myself babbling and may have had far too much wine but I find this response really enlightening but also infuriating at the same time. Surprisingly I find myself thinking of an XKCD comic [0] that I interpret as defending yourself by saying the law allows is the worst defense available. [1]. I admit I pointed out (incorrectly) that they are legally obligated to obtain the biggest profit possible however I think as I said above (meta quote) I expect a business, organization, organism, etc to act in its own self-interest to survive in the best means possible to gain an advantage over preditors, competitors and other external threats (i.e. climate or other non-direct threats)
[1]
quote:
> (mouse over) I can't remember where I heard this, but someone once said that defending a position by citing free speech is sort of the ultimate concession; you're saying that the most compelling thing you can say for your position is that it's not literally illegal to express.
all of the above said, I find myself wanted to by you a few coffees/scotchs/wines and continue this discussion for an entire weekend.
This isn't Amazon's fault.
This is the government's fault.
This is the citizenry's fault for not holding their government accountable to holding Amazon accountable.
Amazon, the government, and "citizens" are guilty.
I'm with you until you get to the point where it's somehow my fault that over the decades those with the most money and influence stacked the deck to create favorable tax statuses for those with the most money. FOH with that.
Also the IRS is part of the executive branch and had it's funding and therefor ability to enforce the tax code gutted year after year. That's now 2 of the 3 branches we have to "protest".
If corporations were actually people, they would almost all be psychopaths and most people here know that. In a lot of ways this situation has been developed and maintained by design.
Comparing them to individual behavior is simply not relevant at this stage of discourse. Holding companies to the same standards we hold human beings to might not be a bad idea in some hypothetical future society, but we are absolutely nowhere near there right now and there are a whole lot of more important battles to fight before we can even think about starting to have that conversation.
You took this to an extreme end with those phrases, none of which were mentioned by the OP. You’re trying to draw a parallel but the violent wording is designed to incite and anger. Not a good tactic for serious discussion.
The fact is the tax laws exist and Amazon doesn’t break them. There are a lot of loopholes and financial maneuvering to get away from some taxes, and Amazon isn’t the only culprit here — but quite possibly is the biggest — and getting out of paying taxes is something companies and millions of Americans try to do every April.
The number one way to fix this is to vote for representatives and politicians who believe in sane, regular tax plans and who are naturally suspicious of large tech companies like Amazon (and Google, Microsoft, Apple, Netflix, Facebook, etc.) and it’s important for customers to vote economically, “with their wallets”, if they don’t like a companies business practices.
In general though, I believe every publicly traded company should be forced by the government to make their tax returns public and accessible. In fact, I actually believe every tax return ever filed by anyone should be public... but that’s an ideal.
The historical Boston Tea Party event comes to mind. Not wanting to pay taxes (or in this case, legally minimizing your tax burden) is as American as apple pie.
Looking at individual company tax returns is the wrong solution to this problem. It's not just ineffective, it's dishonest.
It's tempting to take a "tax the bastards" viewpoint and argue that the tax-avoiding companies are the problem, that they're freeloading, scamming the government. That's the message you get from the presidential candidates. But that argument wilfully ignores the most important fact: tax incentives are the way the government pays people and companies to change their behavior.
The incentive says the government will pay you $X if you do some specific thing. Install solar panels, cut carbon emissions, employ members of a vulnerable population. There are thousands of options. They use the tax process to distribute the rewards because it's simpler and cheaper that way.
Low-tax companies are just the ones who operate in spaces with a lot of these incentives. Identifying the companies isn't relevant, the companies aren't the problem. You want to instead identify the incentives that are eating up your revenue. How much does your solar panel incentive cost? That kind of thing.
And before you ask: Yes, offshore income arrangement are another tax incentive. They're more complicated beause they involve several countries competing on tax rates, but it's just another version of the same problem.
Trying to establish a set of rules for what counts as a business expense and what doesn't for the infinite number of changing industries is a futile task. It also creates weird situations like Apple harboring cash outside the USA.
We should get rid of the corporate tax rate and tax money when it comes out of corporations to real people (dividends, buybacks, etc) at a revenue neutral rate. Would make things a lot cleaner
All this means is that large net-worth individuals will increase the practice of keeping money within a corporate structure and using that for as many expenses as possible.
Through what mechanism can a large net worth individual get a company like Apple to buy things for them? They're not the only shareholder
This is also possible to do today and when it happens the SEC investigates whether a $100M painting for the CEO's office was an appropriate expenditure of other shareholders money. The tax policy doesn't have a bearing on this type of fraud
letters of credit or equivalent, heck there are whole circuits already that work like that, they move around credits at neutral exchange rates so they end up financially as exchanging debts, like sardex.
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[ 4.8 ms ] story [ 289 ms ] threadWhat's the big secret? If you're proud of what you earn and the taxes that flow from that then show it. If you're not proud, then that should be exposed too.
I'd rather not have the in-laws knowing exactly how much I make or have my next employer know exactly how much more they're offering than the last one thank you very much. While I understand that in some countries tax returns are public, those countries are very different than the US in a multitude of ways (which are beyond the scope of this comment, I'm not going write a wall of text, those invite nit picking).
But on the flip side, you'll know exactly how much your colleagues make.
Can’t you also ask your co-worker if you care to know?
My thought is this also risks creating unnecessary resentment in the office. (Most people will react negatively finding out a colleague makes $10k more, even if that colleague has more years of experience - people don’t think about compensation rationally)
For most large companies you can already research what the average salary is for a specific position on sites like glassdoor.
Taking privacy away from people and giving them something of no value to them in trade is a poor justification for change.
The reason I don't want to share my tax return is that it reveals my income. The last time I revealed my income it created a lot of negative relationships.
It could also be that Waterluvian had a low income and that affected his relationships.
Or it could be that it just differed in a direction (up or down) that his peers didn't expect or appreciate for whatever reason.
I can think of a lot of reasons revealing my income would affect various relationships I have (whether that's a good thing or a bad thing isn't relevant), even though I wish it wouldn't. Information about money does change the way people treat you.
When I was a kid, people knew my family wasn't doing so well and I'd get lots of well-intentioned charitable offers from friends and friends' parents that just made me feel really bad about myself, so there's one way that having a lower income revealed can affect relationships in an apparently positive way that's still uncomfortable.
Why? With coworkers who were jealous?
No, in laws and neighbours. Mother in law assumed all tech is paid the sams: poorly. Because her son is paid poorly for his IT job. So when I bought a house that was significantly larger than hers, the relationship changed. She felt lied to all these years.
I also made the mistake of speaking to a neighbor forgetting that everyone comes from different walks of life. So my house that will be paid off in 7 years with one income was "a humble purchase" while my neighbor and his wife are apparently struggling to keep their house with two jobs. I felt awful about my misstep in words. Really a slap in their face.
Although with those friends we've danced around the income part enough that we know the general income range of each other. I had a situation with work co-workers where we were all the same level and years of experience and we shared salaries, and people got a little salty over <$500 / yr differences.
People ask for a lot of fixes to say, pay inequality between men and women, but I think transparent salaries would go a long way and are a fairly simple mechanism. I have very rarely made the experience that pay inequality, if properly justified, was taken the wrong way.
Real life example: the male member on the cleaning crew was the only one certified for certain toxic chemicals -- because the women didn't want to be, even for the pay raise.
But if all you saw was the tax returns, you'd assume there was a wage imbalance.
Arguably, the entire "wage gap" is down to men working more, taking more risks, and being more forward negotiating; having more data sets that obscure rather than reveal that probably won't help -- we've known that the wage gap was a behavior gap since it was found, people just aren't honest about that.
Market transparency is good!
Frankly, I am not that interested in what others are payed. This is something I can negotiate with my boss myself and isn't my business for other people. And I don't want others to know about my income either. You can be sure that people will judge you by your income and feel superior if they make even 10 bucks more. Even your friends might get jealous about your income.
Some people see a value in discretion and some people do not. I belong to the former. There is just so much baggage attached to that shit that it isn't attractive to me at all.
For modest earners, their public income can become a kind of super credit rating; it can gate access to some businesses and services, or establishments that want an aura of exclusivity, like social clubs. In effect it can make it harder to jump levels on the ladder.
For high earners, their public income can lead to gouging and an unwillingness to discount. A car dealership or a contractor might use it to gauge price sensitivity.
I'm sure there might be complicated social outcomes too. Would dating change in a world with transparent salaries? Would neighborhoods and neighborhood diversity? For the worse, or better?
In most cases it ended up skyrocketing as a result. CEOs could see exactly what every other CEO was on when negotiating. Meanwhile boards didn't want to pay under market rate and be blamed for cheaping out if things went wrong.
That's the wrong intention and not what I described in my post. Maybe in those countries CEO salaries were non competitive or too low compared to the value that a CEO provides. I explicitly said that I see transparency as a mechanism to rationalise salaries, not make them more egalitarian everywhere.
But where I think it without a doubt will have an equalizing effect is between people doing equal work but being compensated differently. That effects ordinary workers more than extraordinary talent.
Try it, it's fun! You get more leverage that way.
> If you're not proud, then that should be exposed too.
What if I'm not proud because I earn only half of what my neighbor earns?
Really, so much is wasted to display wealth superiority.
But if salaries were transparent, there would be much less reason to beat about the bush regarding job offers - It would be quite clear what the going rate was, and how that related to executive pay, etc.
If I ask for you credit history or how much you earn or make in taxes, then you will be informed by the government in letter form, exactly what information I was given about you, as well as my name and address.
That makes it a lot less attractive to snoop around in people's data. Hence in Norway it is mainly news organizations that do these kinds of things in relation to writing articles. Otherwise you make yourself look foolish.
Also it is a bit odd that Americans should be so concerned with privacy as you privacy laws are rather weak to begin with. E.g. unlike Norway you can administer drug tests to any employee in the US or do criminal background checks on all new hires. That would be highly illegal in Norway. Only business which can prove to the government that such checks are vital to the type of the business they do would be allowed to do such checks. E.g. working with children.
Basically the US focus its "privacy" laws on hiding information important to the wealthy, while those at the bottom of the latter have most of their sensitive information easily exposed.
That alone is reason enough not to do it.
upper middle class people are juicy targets, rich enough to get some profit, not enough to have proper security. what could go wrong exposing them all in a nice list, indexed and sortable, right?
How is public financial exposure different from living in an affluent area, having an expensive car, etc, etc?
On the other hand, someone driving an expensive car is not necessarily well off, there are quite a lot of people living paycheck to paycheck that drive "expensive" cars.
Kidnap? It seems a little ridiculous for most cases.
I know a guy - we'll call him Mr. Frugal - he's worth, I'd estimate, $5 to $10 million based on what I know about his income and assets over the last 30 years (I know a fair bit to make that estimation). An old family friend, he's in his 70s at this point. He built his wealth from nothing, very slowly, and is a notorious penny pincher (the most extreme version of it I've ever seen). He lives in the same house he has owned since the 1960s; it's worth $150k-$175k today.
This man would be a very ripe target for any number of schemes. Targeting his bank accounts / investment accounts / personal identity, credit, and so on. That's entirely ignoring any kidnapping or blackmail type risks. It doesn't take more than a few moments of consideration to understand how his finances being made so public would make him a target for all sorts of criminals. That despite the fact that he lives very modestly and there is nothing in his home to indicate such wealth. His wealth is held outside of his home, and that's where you would target him. Frankly, given this is HN, I think it's pretty silly obvious that the physical contents of a home often are not the best target for thieves / criminals today.
They become millionaires and stay millionaires because they don't change their frugal spending habits.
Now certainly these people living modestly don't have assets at home that are juicy targets, but they would be juicy targets for kidnapping and extortion.
If they don´t - someone else will take their stash and have fun with it.
Win-win.
If tomorrow nobody could keep it quiet, it doesn't mean the 60% would all get kidnapped, because today the 40% aren't getting kidnapped.
What benefit are we trying to achieve and how does applying that to most corporations get that? Saying we should have it for publicly traded companies makes a lot more sense than every private company let alone every person.
1) There are many people in my life who would make it much more difficult if they knew how much I make. I've kept it from them for a very good reason and they're definitely the kind of people who would just go and look that kind of stuff about random people they know. This would tell them how much I have in investments and property as well.
2) It would necessarily reveal far too much personally identifying information or not serve the purpose you'd want it to. If I had ran away from an abusive or stalking relationship, they could simply look up the state and municipality I pay taxes in, and what company I worked for, making it almost trivial to find me. This could also mean finding (and targeting) anyone that works for a certain company.
3) It would be far too easy for companies to use this information for any number of purposes. I'm currently getting a huge amount of mail about moving companies and brokers because my landlord publicly put my condo up for sale. It could get much worse than that.
4) If I'm the daughter of an extremely conservative family but I'm working at a strip club, even if I'm "not proud" of what I do that give no good cause to expose it to the world.
These are the situations from off the top of my head and already it would reveal far more information than I'm comfortable with. "If you have nothing to fear than you have nothing to hide" is never an appropriate excuse to curtail anyone's privacy.
Why would "strip club" be exposed? Only the amount you make should be. Your arguments all seem rather selfish. I realise the proposal might be extremely uncomfortable for some, but consider the overall benefits.
Because the EIN is listed on the W-2, which is filed as part of the return.
And if you're going to reply that you meant some abbreviated form of the tax return, then:
The "what have you got to hide" class of arguments you're using to insist we expose an abbreviated version would also apply to expanding the abbreviated version to full disclosure. And you might be reasonable enough to stop, but that doesn't mean others will be.
People have strong motives to want to dig into political opponents or people they don't like, and we know from history the "what have you got to hide" question and friends are routinely used in trying to eviscerate 4A and 5A rights.
But my argument is not so much "what have you got to hide", but more "we're all in this together".
(And yes, people jumping to entirely the wrong conclusion is another potential issue...)
Do you think your 4 examples are endemic problems in those countries?
Because what you pay in taxes has been public information in my home country Norway for many decades. None of the problems you mentioned have been an issue.
As hard as it may seem, Norway values BOTH transparency AND privacy more than the US. So there are lots of laws which protect your privacy.
1) It does not state HOW you make your living. Just roughly how much you pay in taxes and how much you earn. The details are left out.
2) There are always systems in place to help protect citizens with special needs for more privacy.
3) Companies in Norway cannot pass around information about you to each other or store information about you it does not strictly need. It is not like the US where companies can en masse huge amounts of data about customers and sell it to each other. Information gathering for commercial purposes is quite restricted.
4) As a rule in Norway, you are informed about people obtaining information about you. E.g. if a company does a credit history check on me, I will get a mail stating exactly what company credit checked me and word by word, what information they where provided. The credit check info leaves out a lot of the details that would be available in the US.
Same goes if somebody checks your taxes and income. You are informed of who makes the check and what info they have been provided.
I hope this gives an idea of how you can in fact embrace greater transparency while at the same time promote stronger privacy laws.
I can remark that Norwegian politicians and CEOs are among the lowest paid in the world despite Norway being among the richest countries in the world. I think our long tradition for transparency is a contributing factor to that. Not so fun to be greedy when it is obvious to everyone.
Most of your examples also seem to impact those that present differently than they really are, I’m not saying that that’s not a valuable ability but it’s interesting. I wonder how much of our current political situation is due to believing or rejecting how others present...
It can be made to work in societies that are already pretty open and equal, but in a highly unequal society like America?
I care about my own, and the only thing that bothers me is that I pay too much tax.
If Amazon paid more, I don't think any of us would pay less, so who cares how much they pay.
Fair enough, those people depended on Barclays for their livelihood but not quite what people have in mind when they think about the amount of tax a company pays
Anyway, you can just imagine how companies would use that figure rather than corporate taxes
Good idea though
In general, people get annoyed if a company is extremely successful and contributes little in the way of direct taxes.
Companies like Amazon benefit massively from all the tax (infrastructure, education, etc ...) that is paid by other companies and by citizens, yet contribute little directly.
Perhaps, it would be possible to list both separately rather than amalgamated together.
A final point is that, to a greater or lesser extent, big companies must have employees but seemingly get to choose the level of taxation they pay.
They just get a rebate on R&D hours invested just like every other company that does software/hardware engineering. People bitching about this should look into their own company's finances because I can almost guarantee their company is filing for that credit.
Is your company paying $0 in net taxes?
Working as intended? The tax code is designed to encourage this kind of reinvestment.
Does "every penny we owe" mean what a layperson would think, or does it mean their lawyers used every weird loophole they could find to make sure they "owe" nothing at all?
The second part of the quote is irrelevant. It's nice that they're creating jobs, but they're only mentioning that to essentially bribe us into accepting being swindled out of money they owe. Just pay your taxes!
You say “just pay your taxes”. What is the amount at which you would believe they are doing just that? What is the standard for which someone who we think isn’t paying their taxes should have their tax returns publicized? (I say punlicized because the IRS already has a mandate to audit, and Congress has statutory authority to request them, so presumably what’s left is publicizing them? I appreciate that’s not what you said though :-))
If they haven’t, this sounds like pandering. But hey, so’s “let’s axe student debt” instead of the obvious “let’s 20x Pell grants”, so...
But legislatures play this game plenty too.
(And that's not even mentioning the cases where they created the problem in the first place.)
We should funnel many more students into vocational schools where they’d contribute more to society (by not having to revert to waitressing as fall back). They could be nurses, welders, HVAC, etc earning good money. But no, we have many many people regretting their majors and many disillusioned with the job prospects of their peripheral majors.
My pet peeve is the attention elite private schools get. They represent a very small fraction of all students. We should instead ensure state schools remain affordable but also ensure that grades mean something and not everyone “deserves” acceptance. We should push people who don’t fit in academically into vocations rather than string them along and have them fail in a career.
For corporations investors need to be able o be informed about their business operations - it is what separates it from a scam and prevents the investment system from collapsing as it would if there was nothing stopping anyone from just taking the money and running off with it. Earning and tax information wouldn't make sense as private.
That doesn't mean that employees and customers have no right to privacy because of a corporation. Just like how states don't have rights but the people making them up do.
After the financial crisis, bankers were unpopular, so politicians in the U.K. curried favour with the public by bringing in a banker bonus tax.
Tech companies were once the pride of the nation in the U.S. and the notion of creating tax incentives for tech investment in the U.S. was highly popular. Nowadays, they are no longer popular, so there is now a public outcry for taxing them more.
Tax can't be like that, because investments don't go to where there is a lot of uncertainty.
I do agree that Amazon not paying any tax is an indicator of a broken system that needs fixing. But politicians coming out and saying "I'm going to tax Amazon" is not right either. They should say what the system should be, bring it in, and then stick with it, making sure there is proper enforcement.
They can't just come out during each electoral cycle and say "This year, we like Tesla, so whatever system doesn't have Tesla paying any taxes, that's the right system. And this year, we dislike Amazon, so whatever system levies a lot of taxes on Amazon, that's the system we're going to have. Not sure if the same will still be true next year, but we'll cross that bidge once we get to it."
The issues of that tax code are systemic but that level of abstraction is seldom understood.
So, really, what it was was plainly and simply: "Here are a bunch of people who are disliked by the majority of the electorate. Therefore, let's have them give us some money."
EDIT: This was the story I was talking about: https://www.nytimes.com/2009/12/10/business/global/10pound.h...
It has to be one of those things that do knowing you’re sacrificing everything. Like being a deserter or being a double agent. Your belief has to be high and you should be willing to take the repercussions as a patriot. Not too dissimilar from being a colonial revolutionary.
I frankly get scared when people think otherwise. Corrupt af.
If you were asking for sunlight, and everyone's tax returns would be opened for public scrutiny, that would be one thing. But you are choosing a sub-group, and saying, "No, we only want to drag your tax returns out into this spotlight." That's a totally different thing, and that incentivizes a completely different set of behaviors game theoretically speaking.
It may do other good things, but only after a period of substantial demagoguery and incomprehension.
https://news.ycombinator.com/newsguidelines.html
Well, that's true. If we could count on well reasoned analysis from all concerned, that might be one thing. But I think we all know that likely won't happen. It rarely does with anything actually. And policies based on sound bite scapegoating are rarely a good idea either. Witness, the drug war.
Probably best for congress to just do their jobs, look at every tax return in corporate America, and recommend and make regulatory changes where appropriate. No real need for grandstanding, it wouldn't be helpful. The grandstanding might actually hurt in this case?
Free Markets, Liberal Democracy means freedom of exchange of information. We're not talking about National Security Interests here.
But in the recent debates we also discussed if candidates would prosecute Trump after he’s no longer a sitting President, apparently conveniently forgetting that it’s the DoJ, not the President, who decides who to prosecute.
You’re mostly right on tax policy, though a lot of tax policy is set by guidance on and interpretation of the statutes, which the President can influence since Treasury is part of the Executive.
On the other hand, if we set aside the politics of prosecuting an ex-President for a moment (that debate could go on and on), the DOJ is part of the Executive Branch, and the Attorney General is appointed by the President. It would be in those candidates’ power to set that prosecutorial agenda for the DOJ if elected.
(Finally, I’m guessing we also agree that we’re not an statute interpretation or a regulation away from Amazon paying, let’s say, 10% of their SEC-reported profits in taxes.)
Sure. But that’s a political judgement, not a statement about the actual powers of the Executive, which is what you were talking about above.
It’s within the President’s power to instruct the AG to pursue a particular case, and if the AG refuses then the President may replace them. Whether or not that’s appropriate, politically tenable, or might expose a President to action by the Legislative Branch, is a totally different question.
people should be protesting congress, not Amazon, this constant red herring is ridiculous, Amazon, like every other business is trying to compete and will pay as little taxes as possible. Tell congress to change the rules and all businesses will play by better rules.
any other conversation about the meaning of Amazon paying the tax they have to I believe is a waste of time, both parties are guilty and the citizens are guilty for not protesting congress.
They're not, it's a common misconception: https://www.lawschool.cornell.edu/academics/clarke_business_...
"Third, corporate directors are not required to maximize shareholder value. As the U.S. Supreme Court recently stated, "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." (BURWELL v. HOBBY LOBBY STORES, INC.) [1] In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders. Usually maximizing shareholder value is not a legal obligation, but the product of the pressure that activist shareholders, stock-based compensation schemes and financial markets impose on corporate directors."
[1] https://www.law.cornell.edu/supremecourt/text/13-354
"While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits. If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well.
HHS would draw a sharp line between nonprofit corporations (which, HHS concedes, are protected by RFRA) and for-profit corporations (which HHS would leave unprotected), but the actual picture is less clear-cut. Not all corporations that decline to organize as nonprofits do so in order to maximize profit. For example, organizations with religious and charitable aims might organize as for-profit corporations because of the potential advantages of that corporate form, such as the freedom to participate in lobbying for legislation or campaigning for political candidates who promote their religious or charitable goals."
[1] https://www.law.cornell.edu/supremecourt/text/13-354#OPINION...
While I understand your point in misconception 3 and it is salient, I suspect if Amazon acted in a way where no one could understand their strategy to be profitable it would have serious challenges in execution, implementation and most important 'trust'. I use scare quotes here because trust is very hard to build and if the business as a whole appeared to act in an 'irrational' (read not in a way to maximize profits) I would expect investors money to leave as well.
while the law changes over time I expect a business, organization, organism, etc to act in its own self-interest to survive in the best means possible. If Amazon is following the current tax law (I assume the answer is yes here) then every business is doing the same and will protect its profits in the name of competition. I feel the only solution here (if Amazon not paying taxes is a problem) is to go to the people who design these laws. In my opinion if we were playing a board game and Amazon was a player, they are playing by the rules and our issue is truly with the people who made the laws/rules and not with the player itself, if a board game had loop holes they would be abused (and often are) and the solution is not to point and blame the player, it is to communicate with the game creator and advise on why their rules/laws are not fair to begin with. I am pointing at Amazon because this article is about Amazon, however every business(player) is guilty in acting in their own best interest, guilty of trying to survive and win.
I find this really infuriating to see some of the comments below that appear to deliberately put words in my mouth or opinions and miss the point of my argument and I hope more people will review Paul Grahams Hierarchy of Disagreement. essay. While it is not perfect I do believe it is a step in the right direction.
I find myself babbling and may have had far too much wine but I find this response really enlightening but also infuriating at the same time. Surprisingly I find myself thinking of an XKCD comic [0] that I interpret as defending yourself by saying the law allows is the worst defense available. [1]. I admit I pointed out (incorrectly) that they are legally obligated to obtain the biggest profit possible however I think as I said above (meta quote) I expect a business, organization, organism, etc to act in its own self-interest to survive in the best means possible to gain an advantage over preditors, competitors and other external threats (i.e. climate or other non-direct threats)
[0] https://xkcd.com/1357/
[1] quote: > (mouse over) I can't remember where I heard this, but someone once said that defending a position by citing free speech is sort of the ultimate concession; you're saying that the most compelling thing you can say for your position is that it's not literally illegal to express.
all of the above said, I find myself wanted to by you a few coffees/scotchs/wines and continue this discussion for an entire weekend.
I really appreciate your response.
You're right, it's our problem.
This isn't Amazon's fault. This is the government's fault. This is the citizenry's fault for not holding their government accountable to holding Amazon accountable. Amazon, the government, and "citizens" are guilty.
I'm with you until you get to the point where it's somehow my fault that over the decades those with the most money and influence stacked the deck to create favorable tax statuses for those with the most money. FOH with that.
Also the IRS is part of the executive branch and had it's funding and therefor ability to enforce the tax code gutted year after year. That's now 2 of the 3 branches we have to "protest".
Your argument is morally reprehensible.
Comparing them to individual behavior is simply not relevant at this stage of discourse. Holding companies to the same standards we hold human beings to might not be a bad idea in some hypothetical future society, but we are absolutely nowhere near there right now and there are a whole lot of more important battles to fight before we can even think about starting to have that conversation.
The fact is the tax laws exist and Amazon doesn’t break them. There are a lot of loopholes and financial maneuvering to get away from some taxes, and Amazon isn’t the only culprit here — but quite possibly is the biggest — and getting out of paying taxes is something companies and millions of Americans try to do every April.
The number one way to fix this is to vote for representatives and politicians who believe in sane, regular tax plans and who are naturally suspicious of large tech companies like Amazon (and Google, Microsoft, Apple, Netflix, Facebook, etc.) and it’s important for customers to vote economically, “with their wallets”, if they don’t like a companies business practices.
In general though, I believe every publicly traded company should be forced by the government to make their tax returns public and accessible. In fact, I actually believe every tax return ever filed by anyone should be public... but that’s an ideal.
https://news.ycombinator.com/newsguidelines.html
Not sure how wise it is for politicians to employ a populist strategy against companies that outstrip them in favorability among the average citizen.
It's tempting to take a "tax the bastards" viewpoint and argue that the tax-avoiding companies are the problem, that they're freeloading, scamming the government. That's the message you get from the presidential candidates. But that argument wilfully ignores the most important fact: tax incentives are the way the government pays people and companies to change their behavior.
The incentive says the government will pay you $X if you do some specific thing. Install solar panels, cut carbon emissions, employ members of a vulnerable population. There are thousands of options. They use the tax process to distribute the rewards because it's simpler and cheaper that way.
Low-tax companies are just the ones who operate in spaces with a lot of these incentives. Identifying the companies isn't relevant, the companies aren't the problem. You want to instead identify the incentives that are eating up your revenue. How much does your solar panel incentive cost? That kind of thing.
And before you ask: Yes, offshore income arrangement are another tax incentive. They're more complicated beause they involve several countries competing on tax rates, but it's just another version of the same problem.
People don't understand, so they ask for more information. That's about as honest as it gets.
> tax incentives are the way the government pays people and companies to change their behavior.
Which has nothing to do with motivation. That's a large part of the ask.
We should get rid of the corporate tax rate and tax money when it comes out of corporations to real people (dividends, buybacks, etc) at a revenue neutral rate. Would make things a lot cleaner
This is also possible to do today and when it happens the SEC investigates whether a $100M painting for the CEO's office was an appropriate expenditure of other shareholders money. The tax policy doesn't have a bearing on this type of fraud