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Comment by eridius | Hacker News Reader

By your logic, everybody should pay far more than the taxes they owe.

The honorable judge Learned Hand (yes, really) once said

> There is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

As long as companies are staying within the bounds of the law, it's perfectly reasonable for them to keep their tax bill as low as possible, and one might even argue that (for public companies) they're required to do so in order to perform their fiduciary duty to their shareholders. If you have a problem with the "loopholes" that companies use to lower their tax bill, you should take it up with the people who make the law, not the companies that follow the law.

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Stop posting this damn quote. Just stop it. It's disingenuous and dishonest in the extreme, and whatever relevance it may once have had is long gone. I'm so sick of hearing it in every Hacker News discussion of corporate tax, by ostensibly intelligent people.

Here's why: for tax regulations created through a transparent democratic process and a popular mandate, this quote might be proper, but that's not what happens. The kinds of tax loopholes that allow for companies like Apple to dodge their obligations are created through corruption and regulatory capture, and would be choked off in a heartbeat if the general public actually had any say in the matter. Worse, they're simply not available to schlubs like you and me, so it's not a level playing field. To set up these loopholes in a corrupt way, and then use this quote (and the broader attitude of "It's legal, so it's OK!") to gag people from complaining about it, is despicable.

> created through corruption and regulatory capture

Who is corrupt, who creates the regulatory capture, and how do the people in a democracy correct that? Or do we just throw up our hands?

We definitely should not throw up our hands! But one of the first steps in fixing the problem is to convince more people that there actually is a problem, and that it is not bad or hypocritical to oppose the use of tax loopholes. That's why I bristle whenever that quote shows up here; it's a deliberate effort to convince people that there's not even a problem. Hacker News seems to have no problem understanding that "legality != morality" when it comes to drugs, so I don't understand why it's so much harder to grasp re: taxation.

I think the quote is used to point out that Apple did nothing (legally) wrong by following the existing law. It seems to be appropriate.

Do I think corporations should be paying more in taxes? Sure. But Learned Hand's point is still worth considering, especially in a climate where many think everyone should pay more taxes.

I say, OK, you first. There's a line on the tax form where you can voluntarily pay more. Put your money where your mouth is, I say.

> I think the quote is used to point out that Apple did nothing (legally) wrong by following the existing law.

I think you're simply wrong here. The quote very clearly refers to morality, not legality[0], so I criticize it on moral grounds.

> I say, OK, you first. There's a line on the tax form where you can voluntarily pay more. Put your money where your mouth is, I say.

Funny you should bring this up! This is the HN corporate tax argument I hate second-most, after the Learned Hand quote. It's a tu quoque fallacy that's simply used as a gag order to pre-emptively shut down any debate on the issue, since obviously no one meets that standard.

[0] And even if it didn't, that's how it's used in practice when it's posted here.

Learned Hand's remarks are moral in the sense that he says there is nothing sinister (wrong or evil) in following the tax law by arranging your affairs to pay the least, and also that those who say it is immoral to do so are wrong (in the legal sense). But it was a legal opinion rendered by a Supreme Court justice. (Sorry, I don't recall the particulars of the case he was addressing.)

As to the tu quoque fallacy, that is a moral argument, not a legal one. If you want to pass laws that only target some but not others, there is a moral judgment there. If you argue against doing so by pointing out that the advocates of such laws would not like to have them applied to themselves, that is a reasonable response to such an argument to highlight the hypocrisy of that position.

The bigger issue is what is usually implied by the quote, which is a sort of naturalistic fallacy of law. Namely, that whatever is legal is moral, and therefore by implication changing the law would be immoral.

Yes, I agree. But let's not slander Learned Hand by attributing to him the intentions of those who quote him. In fact, compared to some more recent justices, I am confident that he would have filed outraged dissenting opinions in recent cases where the law made by representatives was set aside and, in some cases, new law was imposed from the bench.

The quote doesn't say that whatever is legal is moral. It makes a specific judgement that arranging your affairs to keep taxes as low as possible is not immoral, and it points out that everybody does this, rich and poor, corporations and people alike, and that demanding others pay more than their required amount is hypocritical and sanctimonious.

They didn't follow existing laws, this the point. They got a special exemption.

How are you supposed to figure out the morality of something when there are hundreds of pages of very special case rules for how to follow the tax law?

The entire point of having a representative democracy is that the representatives are supposed to look out for the best interests of the voters when making laws and regulations. If they write laws that benefit multi-billion dollar companies at the expense of everyone else than the representatives aren't doing their job correctly and need to be set straight by the voters.

The reason why the quote about tax minimization is BS is that the government still has to pay its bills. If every rich corporation is taking advantage of every conceivable loophole, and lobbying for ever more loopholes then the share of the bill starts to fall on the shoulders of everyone else, who doesn't have the time or money or both to lobby for special treatment. And that is unfair.

OTOH, there has to be some balance especially with the amounts of money we're talking about, or corporations will stop trying lobbyists and start hiring white collar crooks to hide their money. Which is why the proper place to settle this is in the legislature where everyone gets at least some way to sort out who pays and how much.

Couldn't the democratically elected representatives decide to spend less instead of more?

I am just curious, can you find a concrete example of where the interests of the people and state were put above the interests of the lobby groups of the big corporations?

Taxes are evil. Taxes are theft.

Or not.

You're not going to change behavior by moralizing to people who consider what you think is moral to in fact be immoral, or who at least are amoral about the whole manner as corporations tend to be. Since we can't seem to agree on the moral issues of taxes, all that's left is the reality of law, and the incentives of the law. It's posturing to think we can solve the matter by any other means than top-down legislation and enforcement, if indeed there is a problem to solve. (Corporations and individuals both have many arguments for why they are paying enough taxes already thank you.)

You're not going to change behavior by moralizing to people who consider what you think is moral to in fact be immoral

You're right. Which is why I think a fair solution is to round up people who think taxation is automatically immoral (along with the rest of the "if a government did it, then it is by definition immoral" brigade), drop them somewhere with no government and no laws, limited resources and maybe a bunch of weapons, and let them put their philosophies to the test.

If there are any survivors, then when they make their way back to civilization they might have a different worldview.

It'd be a fun experiment, but I'm occasionally revolted by the supposed outcome people seem to fantasize will happen. Income tax, the tax people usually complain the most about, is only 100 years old, how did anything get done before it? If you did the experiment with Americans I'd sooner expect to see something like a 19th century Mormon settlement than Somalia or whatever hellish landscape is in your mind.

I believe these cases should be judged on case by case basis. If the entity acts in bad faith I think it's fair to held it accountable. The laws should not be treated as a compiler. If you make billions profit in a country and pay no tax I think it's fair to assume that you acted in bad faith.

Whether or not you agree with the quote, that does not make it the slightest dishonest or disingenuous, and I'm feeling rather insulted by your comment. Apple did not create the tax loopholes, and there should be no expectation whatsoever that they should pay a higher tax bill than they're legally required to do. Not only because of their fiduciary duty to their shareholders, but also because paying more taxes than necessary puts them at a competitive disadvantage against companies that don't pay more taxes than necessary. As I said in my original comment, if you have a problem with the laws, take it up with the people who create the laws, not the people who follow them.

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