Google shifted $23B to tax haven Bermuda in 2017
reuters.com
reuters.com
If you blame the company for doing this then I expect that you also make 0 deductions on your personal taxes and pay as much as possible.
This is legal. I can't fault them ethically for taking advantage.
What are we doing here, other than sharing opinions and arguments?
And it shouldn't have been.
As a blanket statement, not it should not. As a counterexample, consider that the whole purpose of the US First Amendment as regards speech is that it should not be illegal to speak, even if others don't like your speech (including because they think it's unethical).
As another counterexample, the war on drugs and alcohol prohibition are examples, in the US, of people trying to make unethical things illegal. The latter is widely accepted as a failure. I'm pretty sure that eventually the former will be too.
In general, trying to equate "I disapprove of X" and "X should be illegal" is a really dangerous tendency that comes and goes. It seem to be on the rise recently, unfortunately, at least in the US...
You can still defend somebody's right to speak (from an ethical pov) if you don't like what they say. These things don't have to be easy.
I don't see what you're getting at. Laws are to govern things people should or shouldn't do - ethics are opinions on what people should or should not do.
Am I missing something?
In RFC terms, laws are MUST and MUST NOT.
Ethics are SHOULD and SHOULD NOT.
There's a difference between those, even in RFCs. There is a similar difference in laws+ethics.
My point is that it is not a given that ethically dubious actions should be illegal. Furthermore, what is ethically wrong to some may not be so for others.
That's all. My only point is, "its legal" is not a pass from being socially judged by us plebs.
"Cheating on your spouse is not ethical but it is legal, would you argue for it to become illegal?"
It was and is in fact illegal for many years precisely because people found it not ethical enough. In english common law, it was even a felony. It is changing (and has changed in a lot of states) precisely because people are more okay with it than they were.
In practice, the legality of things is generally decided by the societal consensus around "ethical dubiousness".
It is definitely illegal in various jurisdictions, and even criminal in many. It's also generally viewed to be no longer federally constitutional since the late 60's due to various supreme court decisions. As a result, most states have struck the laws down over time or repealed them (wikipedia has a map somewhere of this), so you generally only see it as a plea bargaining anymore. IE people will plead to adultery instead of a greater crime.
(Yes, it's as weird as it sounds)
Not everywhere.
If you are in the U.S. military it's illegal and punishable under Article 134, with a maximum punishment of dishonorable discharge, forfeiture of all pay and allowances, and confinement for up to 1 year.
Depending on the state, again in the U.S., it can also be a crime. In Virginia it's a Class 4 misdemeanor according to Virginia Code § 18.2-365/ It's also grounds for divorce.
It's true you cannot replace legal with ethical, but the above should tell you the reason why:
Your definition of what is ethical has not reached enough consensus to be legal/illegal.
It's fine to say others should have your moral values and have arguments why. But expecting them to and scoffing at them for not doing so is silly - this is literally the stuff that makes legality not black and white.
Really it's about legality vs social aberrance. Which is not the same as ethics.
If you have a problem with these legal loopholes, go after your congressman.
The government is the people and the laws tend to reflect what they feel is acceptable because otherwise it would already be made illegal. Corporations are also these very same people and so they'll follow the same standards. I believe your issue has nothing to do with corporations but more about different cultures and values, and perhaps the efficiency of a government that can keep pace with the population.
Where is the difference that would allow us to condemn the companies for maximizing profits by use labor laws but not condemn them for maximizing profits using tax laws?
>Also nothing is that simple.
Yet the previous statement seemed to have been made quite simply, an idea that if you take advantage of any law in your favor, you cannot condemn someone who takes advantage of any other law in their favor.
Money isn't people.
It is not, however, a company's responsibility to build highways, or to figure out how to finance the building of said highways, or to set up and fund public education, or to hire and pay police, is the point. When it becomes a company's responsibility to do so, we march gleefully into one of several dystopian cyberpunk science fictions (pick your favorite) ;)
For example, Google takes advantage of government contracts and grants, paid for by taxes. They also take advantage of the highway, city, water, power, education, housing, copyright and trademark laws, unemployment insurance, and legal (that is, the court system) infrastructure largely built and paid for (directly, by grants, or subsidies) using taxes.
You choose how to spend your time and if you spend it earning an income then you're taxed to pay for the other things that let society function so that you can do so. How much you earn in a given time is irrelevant.
Exactly; OP makes a simple, matter-of-fact statement, and then proceeds to say "nothing is that simple" when they get challenged? Seems like a double standard to me.
The difference beyond people vs money is that a company with shareholders is not obligated to use child labor but is obligated to reduce tax expenditures. It's not simple because what do you consider more ethical? Tax minimization or hiring children to increase profits?
Not doing so would definitely be against the interests of the company.
[0] https://en.wikipedia.org/wiki/Double_Irish_arrangement#Multi...
Just because something's legal doesn't mean it's ethical.
I am open to the idea that Google is still paying an appropriate amount in taxes! Just not by that particular argument.
It's fine if you have personal ethics that are different, but that doesn't automatically apply to everyone.
Of course ethics are subjective. But voicing those ethics is how we arrive at a set of societal values in the first place! It's crazy to suggest that anyone complying with the law should be immune from criticism.
>> It's crazy to suggest that anyone complying with the law should be immune from criticism.
Never suggested this. My point was to focus on the root cause if you want to create change, regardless of why.
Law is the attempt at legalizing ethical principles. Quite often the laws fall short of the actual ethical consensus of the society due to the fact that the members of the society ultimately have little direct control over what laws get made and how those laws are enforced, for example:
federal judges are appointed, not elected.
most people aren't able to parse legalese enough to fully grasp the implications of a law they support.
laws often get passed by Congress people by virtue of some group with financial interests using their money to influence decisions, etc.
That's grossly imprecise. Laws do reflect some of ethical issues that exist in a society but these two are intersecting sets.
If you're a deontologist, sure.
Very few people are pure deontologists. There are all sorts of cases of cases where people would say the ethical thing to do is to not follow a law.
And this doesn't even have to be because the law is "bad" per se; it can just happen that you're in a situation the law's framers did not consider or could not imagine.
But quite apart from that, there is a wide swath of things that are _legal_ to do but that one should probably still not do. And that's fine. We don't want to criminalize all behavior we disagree with, even if an overwhelming majority disagrees with it. This idea lies at the center of US First Amendment jurisprudence, for example.
If an overwhelming majority disagrees then it becomes law because the government represents the people. Failure to do so means there's a problem with the political system, which is what I said in my original comment.
Law is a tool to enforce societal norms — but it's not the only one, nor is it necessarily the best one.
That depends. This is why we have things like constitutions and constitutional courts, to prevent certain things from becoming law even if an overwhelming majority thinks they should.
Of course if you're talking something like 99% majority, I agree. But even a 70% majority, which would generally be considered overwhekming, may not be enough today, in the US, to enact a constitutional amendment. You seem to consider this a bug. I consider this a feature.
But past that, there are things that overwhelming majorities disagree with _doing_ but still don't think should be criminalized. Again, First Amendment jurisprudence is full of examples.
To give a concrete example: is it ethically better for the government that spends as much as it does on military infrastructure to have more money, or the company that builds a search engine and a video-sharing service?
Like pretty much any debate about ethics I would say.
When I do my deduction, you don't see me trying to make it look like going to the restaurant with my kids is a business expense. It would be possible to argue that it is actually a business expense, it would be legal to, but we can both agree that it's abusing the law and it wasn't actually a business expense.
This is the same, their office in Bermuda (if they even have a physical location there) aren't actually making $23B in 2017, that money was made in others countries, using peoples from theses others countries, using infrastructures from theses others countries, thus theses taxes have to be paid for this reason.
This is what I consider unethical.
I've seen a company exec cheat on his wife with a paid hooker on a holiday to Hawaii make it a business expense (both paying the hooker and the holiday itself) and treating the hooker bad enough the company got sued for sexual harassment (because they paid the hooker, that means ... you can fill in, and no it doesn't matter if they "knew" they were doing it or not), AND not getting fired for it. And while this is a tax offense, the idea of him getting sued by the IRS for this is sadly almost absurd. They might do it if they catch him in a lot bigger problems as well, but not likely.
Purely coincidentally, currently in the newspaper, 72 year old millionnaire getting sued for running a company building luxury hotels, collecting unemployment, and charging a government-funded not-for-profit ~1 million euros for consultation services while not registering the income in his personal income statement for taxes. Ironically, this is happened 9 years ago and 7 months, so if the government made even a small error in this case it will be forgiven (which is a near guarantee).
Just because you consider something cheating doesn't mean everybody does, or even that it's a common view, or that it's a crime.
In your example, while you can certainly argue that, I’d say there’s a not-so-negligible non-zero chance the IRS won’t see it that way and any potential risk/penalties don’t make the upside worth it.
Ethics are subjective and personal. Society agrees on most principles and these are what become our laws, but not everything (like cutting in line) is at a scale that matters.
In this case, society has agreed on tax laws that this is the right amount. You are completely free to suggest something else and get the support to change it. Tax laws change all the time and loophole has already been closed so it seems like everything is working as it should here.
Not at all. Society can, and does, agree on all sorts of stuff without it becoming law. This is generally a very good thing, because criminalizing behavior, even behavior everyone agrees is not great, has significant costs. Sometimes those costs are larger than the costs of the behavior itself.
Either they abandon higher morals or decided to be in the same moral mud as Marck Z and facebook
In this case saying its 'legal' misses all the processes, politics, lobbying, accounting firms drafting laws, ideology, tax havens, that are all in play to leave little 'loopholes' like this for selective enrichment.
Google and other corporate interests who benefit from these 'loopholes' saying 'this is legal' is understandable, but why should an individual say this?
How about employees allowed to sell their services to a third parties incorporated in low tax regions competing for their membership, which in turn then license it to employers, leading to reduced tax in their home countries? Why is this not a thing? If everyone did that the whole tax base would dissipate and destroy our current system, hence its now allowed, why is the exact same thing ok for corporations?
Uh, no. It's called bankruptcy.
One view is that bankruptcy laws in the US created a powerful bankruptcy bar whose special interest in enriching themselves through consumer-friendly bankruptcy laws became more powerful and focused than the special interest of banks.
https://legacy.voteview.com/pdf/Berglof_Rosenthal_Bankruptcy...
Isn't that what people are doing when they point out the problems with it?
The money in question here, for example, is paid by foreign citizens in non-US countries. How much of that money is owed to the US government, and why? How much owed to the nations from which those citizens hail, and why?
This is the biggest personal dilemma I face. Does it make sense to pay double for services from companies that aren't the big 5? Does it make sense to divest my retirement holdings from companies and indexes that have investments in the big 5? Will this just add new companies that will behave just as poorly? Am I better off trying to lobby my elected officials for change? I really have no good answer for this complex issue despite the fact that it bugs me and I think about it frequently.
> some of the world's biggest companies which have absolutely failed at anything resembling civic duty.
I find it interesting that you see it as "championing corporate tax avoidance" instead of pointing out the failure of government to correctly control taxes. Perhaps we can debate how the money is actually spent on civic issues as that is probably more productive than who spends it.
Paying taxes is not the failure of duty that I describe in a completely different story about San Francisco's problems, and paying more voluntarily is not the solution to it.
So please describe where exactly is the inconsistency that you claim is clear?
Google could not pay taxes by giving their employees raises or bonuses, invest in infrastructure, donate it to charity, etc.Instead they stash it in the Caribbean.
I wouldn't care but their executives actively push a political agenda not inline with their actions which makes them rampaging hypocrites and thus open for criticism
I never argued it was illegal, I'm saying it's not ethical
It's not arbitrary. If the primary purpose of an entity or transaction is to avoid tax, then its employment is likely to constitute illegal tax avoidance or evasion (the terms have distinct legal meanings but those are not very interesting here). Purpose is determined primarily by contemporaneous documentation.
Is there some interpretation involved? Yes, because just about any legal decision involves some interpretation and these matters tend to be exceedingly complex. By their nature, they usually involve some sort of subterfuge or concealment. But it's not arbitrary. There are laws and precedents that attempt to define exactly where the line is.
Here are some references that might help clarify further.
http://taxexecutive.org/tax-avoidance-vs-tax-evasion/ https://www.lowtax.net/blogs/The-Basics-of-Tax-Evasion-Tax-A...
The Netherlands is an economy about the size of California, the reason Google only makes 13.6 million here is that they make the subsidiary pay a lot of royalties to a Bermuda Google entity, who probably bought these rights internally from the Google Corp for a price that was way too low. They can price these royalties anything they want, so it will always be an amount that leaves a maginal profit.
> This is legal.
Of course they say that, but it depends on many things, such as the fairness of their internal pricing. If those prices are not fair, the arrangement may not be legal.
It entirely allowed to both hate the tax system AND hate the corporate cronyism that created it.
Also your "if you blame the company..." scenario is, at best, a weak comparison. It would be akin to living and working in New Jersey, a highly taxed state, and instead shifting your assets to be taxed as if you live in Florida where there is no personal income tax.
I mean campaign finance reform is a topic people on both sides at least pay lip service to (or at least bemoan how the other side gets funded).
Campaign financing is something that I agree with, if I can afford to help this candidate reach more voters, why not? There is nothing wrong in that. There is another, different discussion about what this money should be spent on, eg this candidate is great vs these other candidate is bad, but I don't see nothing wrong with giving money for a candidate campaign.
Lobbying is different, in most countries in the world this is called bribing, hence a factor in corruption.
A company dumps toxic chemicals into the air/water, and it results in horrible deaths and destruction to the environment which makes everyone's lives worse.
However, they've managed to do this in a completely legal way. Maybe they moved the dumping to a region without strong regulation. Maybe they found some legal loophole. Maybe they funded a politician's campaign who then carved out a legal loophole for them.
Would you still not blame the company or call their actions unethical in this case?
I personally would blame the company. I would consider their decisions unethical. I would also want to fix the laws so that I could legally hold them accountable, but I wouldn't absolve the company of responsibility until those laws were fixed.
How is tax avoidance all that different? Sure, it's not directly harming anyone. However, the lack of funding for the government means fewer social services and those services often are used to help people avoid horrible deaths (such as homeless freezing on the streets, veterans receiving medical care, or safety improvements to roads) and to improve the environment we live in (national parks, clean water initiatives, etc.).
However this resulted in killing off all the marine life and fishes. So what do the fishermen do? Take up piracy!
Because that's what we are talking about there. 100 million gross and 3.5 million taxes is a drop in the sea compared to 22B gross.
If we can't have non-corrupted politicians. Who should we blame then? Maybe the people that get most benefits from that fact. Like the top management level of those corps.
1 : https://www.reuters.com/article/us-germany-politics-glyphosa...
Yeah not the same thing.
The same thing would be for us to open a shell company in Bermuda, ask our job to pay us through there and use that bank account to pay for our local purchase.
The deductions we get are for a reason, as long as the reason apply, it's perfectly ethical to use theses deductions. Once you don't actually respect that reason, no it's not ethical to use theses deductions.
I knew some independent workers that went to restaurant and put that as a business expense to get a deduction. It was clearly not an actual business expense, we could argue that it was (well how could you have a business without eating?), but it was certainly not related to any business being done. The deduction would still pass, it would still be "legal", but it wouldn't be ethical at all.
Society has already decided that "because I can" is not a universally acceptable reason or defense.
The (far) bigger point is that it's royally fucked up.
And that of course corporations are not even (remotely) comparable to individuals. When you and I are able to radically reduce our tax liabilities by shifting our assets to Bermuda (or anywhere else), then perhaps we can have a discussion based on appeals to individual responsibility.
But of course we can't. And that's why the state of affairs is royally fucked up.
That has yet to be determined. Tax law does recognize acts whose sole or primary purpose is to avoid taxes (i.e. not as a side effect of other business purposes) as evasion, and evasion is illegal. Just because such cases are very hard to prosecute successfully, and are rarely prosecuted at all for that or other reasons, doesn't make an illegal act legal.
> I expect that you also make 0 deduction
That's an incredibly shallow argument. Those who identify a problem don't have to be martyrs. In particular, those who identify inequity are under no obligation to increase it at their own expense before it can be addressed. I'll be glad to give up my exemptions when the tax code is fixed for everybody, not while others are still benefiting from its flaws.
Policy and decisions and personal benefit should be separate. We should respect those who will argue for a policy change out of principle, even when that means giving something up, and not demand that they give up more. The people we really shouldn't trust are those who never argue for a policy that doesn't benefit them. That's called corruption.
Hey, at least it's got a fun name. I can't imagine anyone is too surprised by this. Personally I'm happy to pay my tax burden. I grew up in America, went to public schools and benefited from public services.
Corporate tax evasion like this seems like fixation on a local maxima. There's no way to account for the return on your mandatory tax investment, but their is a return and it's important for everyone.
In theory this is solved by government action to make legal schemes illegal and prosecute anyone using illegal tax avoidance schemes. In practice lobbying against this is often cheaper than paying, so you end up with giant loopholes and defunded tax collection agencies.
At least this hole is getting closed, but that's a minor victory in the grand scheme of things
The problem isn't that these strategies are unfair; the problem is that authorities can't agree on a uniform concept of "fair" because it's in their best interest to get the most business in their territory. Prisoner's Dilemma again, in the opposite direction.
It's unclear why that money would be owed to the US ethically. These companies are, ostensibly, already paying their fare share in payroll taxes, real estate taxes, sales taxes, commercial use taxes, etc.
It's not just this, It's also evasion of taxes that could've been paid in these countries. (Could've, because what they're doing is legal, so they have no obligation to.) What they do, is most easily explained with the Starbucks example:
Starbucks has one subsidiary, based in the Netherlands, that holds the rights to sell coffee with the name 'Frappuccino'. All Starbucks stores are owned by another subsidiary. Whenever a store sells a 'Frappuccino', they pay a $1 royalty on that name. Because royalties aren't taxed in the Netherlands, this $1 is pure profit.
This is from memory, so It's probably not completely right, but in the end they really do evade foreign taxes, not just a double tax in the US.
... and that's before we even touch on the ethical framework around which anybody gets to charge any taxes at all on "right to a name;" the companies we're talking about are already paying sales tax, real estate tax for land, payroll taxes, etc., etc., etc.
... it comes back to the ethics and morality of "Can you tax intangible goods" in the first place, and that's where things get really exciting. For what is the value of a piece of software, and how do you measure it? ;)
The company is headquartered there, the IP was developed there, the founders were educated there, the core technology that made their company possible was funded by US tax payers, the safe environment that makes business possible is secured by police and military funded by US tax payers, etc
When the company then goes on to do business in another country as well, where another nation is providing security, safety, infrastructure, perhaps a public education system that creates a workforce the company wants to invest in... How much does the company owe its home country?
If you graduated university, how much do you owe your alma mater in annual donations beyond what you paid for the diploma program? ;)
When you put money into a 401k, that's tax avoidance.
A fluid pipe line, perhaps. There are no ethics. Expect companies to do everything there allowed to. Disallow things you don't want them to do.
It's this easy.
It is far more complex including game theory and recognizing prisoner's dilemma in action.
I think you need to take your rose colored glasses off.
I never said the past was perfect – that's a strawman. But it's self-evident that companies on average used to think contrary to what Freidman was proposing. That's why he was arguing for it in the first place!
And before the Friedman Doctrine, they could be more easily condemned for their lack of social responsibility without the constant refrains that the only duty a corporation is to make money for its shareholders.
It has to do with the consistency of due process from the group demanding payment.
The only meme you presented was the idea that groups recognized as governments are a more respectable group to pay and secondly that their arbitrary levies are to be respected at any arbitrary amount. And that combination of ideas working together is pretty new, there is simply no reality to support the view of the world someone else convinced of when you were young. You can donate directly to the Treasury if you want to imagine more roads and schools are going to be built.
That's a pretty anti-democratic "meme." Some "governments are a more respectable group to pay" because they're the collective us, not some arbitrary other.
Why exactly were laws invented?
> stupid
Elaborate.
To highlight it, people highlight the hypocrisy of individuals using the law to minimize the money they pay out while criticizing corporations using the law to minimize the money they pay out. While you can argue there is a difference, doing so puts you in an ethical framework that not all people in the discourse might share.
But when those same people see a company doing the same, they get pissed off and call it unethical, "not the right thing", etc.
TL;DR: companies are fighting for their interests, just like people are.
If there was a simple consensus on what the "right" thing to do was, that would be the law.
I'm sorry this just isn't true. There is a lot of consensus in the US about things:
* legalization of pot
* legal status for DREAMERS
* bigger taxes on corporations
And yet, none of these things (all of which poll very highly) become law.
What results are you talking about? That the candidate who was for all those things won the popular vote by an unheard of 3 million votes? That fact seems to back up the consensus :)
You are vastly underestimating the number of Americans who do not think like you do. All other things aside, that's going to make politics (and the necessary work to change laws you disagree with) difficult.
I want to point out the nature of the arguments you are making here. Its either in deliberately bad faith, or you are genuinely confused about these things. The latter is ok while the former isn't.
Your comment in response to my statement about the consensus was to state that the 2016 presidential election indicated there was no consensus on these topics. Presidential elections are not a good way to gauge consensus on individual topics, and there have been many studies which have found the reason for choices weren't the issues I pointed out, but more racial fears of immigrants and minorities. I should have probably replied with this to your original comment.
Despite this, and unpopular candidates in both parties, the one that supported the issues I mention still won by 3 million votes. That is why I point to it as being "consensus".
Now, what you are doing, is to argue on the technical definition of consensus. Sure, that 2% differential does not sound like a compelling consensus if you ignore the context in which people voted. However, like I said, its still not the best way to gauge it.
A much better way to gauge consensus is by polling and here are the numbers:
* 62% for pot legalization http://www.pewresearch.org/fact-tank/2018/10/08/americans-su...
* 66% support legal path for DREAMERS https://www.npr.org/2018/02/06/583402634/npr-poll-2-in-3-sup...
* 75% favor larger tax on corporations https://www.reuters.com/article/usa-tax/three-quarters-of-am...
That fails to match substantially any of the definition of consensus, IMO: https://www.merriam-webster.com/dictionary/consensus
To me "consensus" requires something more like 90+% agreement if there are possibly valid arguments for the opposition. There's consensus that we stop at red lights. There's consensus that we wear coats outside on cold winter days. There's consensus that regularly smoking tobacco is harmful. There's consensus that the Earth is not flat.
IMO, there are strong arguments for a lot of things I believe in, but I don't assume/presume consensus on them and would not introduce a 48-46 or 29-28 finding as evidence of consensus.
Do you believe Brexit was a consensus in the UK then?
1. Your time scale seems very off. The law rarely changes quickly.
2. None of these things have large scale social consensus, even where there are majorities. The closest is legalization of pot, and it is in fact becoming legal where there is consensus.
But right now, surveys show only 62% of people US-wide support legalization of pot[1].
That's not social consensus of the kind that the law represents long term.
[1] http://www.pewresearch.org/fact-tank/2018/10/08/americans-su...
(I chose Pew since they are very independent, and for the record, i'm pro-legalization)
Not true, especially in the US where it changes pretty quickly. Certainly quickly enough to close tax loopholes that are draining the Treasury.
> None of these things have large scale social consensus, even where there are majorities. The closest is legalization of pot, and it is in fact becoming legal where there is consensus.
Again, not true:
* 62% for pot legalization http://www.pewresearch.org/fact-tank/2018/10/08/americans-su...
* 66% support legal path for DREAMERS https://www.npr.org/2018/02/06/583402634/npr-poll-2-in-3-sup...
* 75% favor larger tax on corporations https://www.reuters.com/article/usa-tax/three-quarters-of-am...
2. I cited these very statistics and explicitly said they are not the kind of level of social consensus that tends to change the law.
You have provided nothing to argue otherwise. I can't tell whether you claim it is not becoming legal where there is large enough local consensus (which is definitely true, and supports my larger point).
There are methods for people to do this as well in the two countries in the system mentioned, but it is way more difficult in terms of effort required and gains gained and impossible if you are an employee and not an owner of a (one man) business.
This could be "solved" either by Ireland increasing its tax rate or by other countries changing their laws to no longer allow for exfiltration of money to Ireland from their economies. But they won't do these things for their own (cross-national competition) reasons. Odd to blame the company when it's the countries that don't want to change, though.
If, on the other hand, a company is actually breaking international law, as Apple has apparently done (https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-i...), that's a different story altogether.
I personally don't believe in corporate taxes. I can't imagine that any reasonably sized corporation would voluntarily forego effort to lower their tax burden considering the relatively low cost of a few accountants / accounting software. Because of that, I prefer a system where only individuals pay taxes.
Now, skipping the fact that my suggestion requires most countries to rethink their individual/person tax code regarding income, property, etc and speaking in a largely hypothetical sense - would abandoning corporate taxes for personal taxes not be easier to ensure that money gets back to the government? As a person it's much harder for me to lower my "profits" in order to dodge taxes. But as a company I can make myself 'break even' or just below it pretty easily.
I'd like to hear counter points to this because normally when I ask my friends the responses I get are more along the lines of "corporations are evil" more than "could it even work economically".
+1 to only have taxes at the individual level. Also, make tax a quadratic function instead of step function. Step function always leads to stupid / shady behaviors around the step points.
1. People should be motivated to work and rewarded for that. 2. Corporations should be motivated to provide goods and services. 3. Luck should be normalized
Kansas massively cut their corporate taxes in 2012, with the implicit promise that lowering taxes for "job creators" would pay for itself. The deficit for the state became so massive as their revenue dropped, that the state had to close education and other municipal services. [1] Kansas is now heralded as an example of how 'trickle down' economics of cutting taxes for 'makers' fails. [2]
[1] https://www.forbes.com/sites/beltway/2017/06/07/the-great-ka...
[2] https://www.washingtonpost.com/opinions/trickle-down-economi...
Which might mean nothing gets paid but a minimum.
ETA: Getting your employer to pay your company instead of you would be tax fraud.
Isn't that what people do if they are contracting?
So as a person, any time you can utilize a corporation's resources without drawing income, you are cheating the system. This definitely already happens, but in your case it would go to another level.
This is illegal.
> This is illegal.
Citation, please.
Take a real life example. Look at Bill Perkins. He live streams poker from his boat. The boat is essential for setting the atmosphere for the live stream. Look at Tai Lopez. He purchases / rents luxury vehicles and residences to portray himself as successful, which is important to his brand. So where do you draw the line?
Corporations, then, reflect the combined, amplified economic output of private citizens. Which is why they must be taxed; for the same reason you would want to tax individuals.
That is the Why part. But you seem to be saying that because corporations will always find loopholes that we just give up. As long as the Government is nimble enough to discover these loopholes and close them, this becomes an un-economic endeavor. Which is why... Governments are good, and should be made as functional in these things as possible.
Alternatively, there's the Henry George system which seems to be getting some interest again. My main issue with this system is that so much "goods" are virtual now being software and information... even virtual land has real value today. I haven't seen a good explanation of how Henry George's system of taxing the 'finite' resources could be adopted to our (still vastly growing) digital age and digital assets.
Corporate taxes provide an additional incentive to reinvest the profits of your business, rather than just sitting on them.
They also allow national governments to extract tax revenue from foreign shareholders.
And it's that second point that is really the biggest deal, since a unilateral lowering of corporate taxes and replacement with income taxes may increase the tax burden on your citizens.
Ireland likes having a low tax rate because it has a comparatively low tax base and can incentivize these extremely large companies to pay taxes in Ireland, but as you can see, this harms the rest of the EU.
Corporations are not inherently evil, but any sufficiently powerful entity is in a good position to abuse its power (governments included). Would it really be a good idea to skew the system to benefit corporations over individuals even more, with all the rampant power abuse going on already?
If your master has no such Code of Conduct, then you have no such Code of Conduct when push comes to shove.
It's like "we value your privacy" or "all natural ingredients", it means nothing because you can define the terms anyway you like.
Defining meaning is really hard.
That's why English Common Law relies on precedence to fix details. "Codes of Conduct", mission statements and advertising are all just meaningless fluff because they are open to interpretation.
Was that wrong?
Also my understanding is that even before, the income moved to tax haven was still subject to US corporate tax, though companies were able to defer taxation until it was repatriated.
https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St...
What this article and most of the discussion misses is that many of these tax havens are just better for business in ways that have nothing to do with taxes
As the article alluded to: PART of an arrangement
You have a catalogue of Cantonal systems, Confederacies, Federations where you can incorporate at the country level or an obscure state’s level (the US has no way to incorporate at the federal level), Segregated Portfolio Companies decades before similar entities were offered in more respected jurisdictions, useful Trust laws with no supranational government undermining them, useful information protection laws with no supranational government undermining them, and thats before we even touch on banking and brokerage services and free trade agreements
The ability to offer these without levying a lazy passive tax for the privilege or “protection” is just icing on the cake
Don't like it? Me either, but Google is still playing by the rules.
And EU tax laws aren't determined in Washington.
Of course, when you retire.....
My point being: they are one of the richest companies in the world, committed to a leftist worldview. The fact that they do everything they can to funnel money away from the poor, downtrodden, socioeconomically-disadvantaged, marginalized, etc., which they so loudly proclaim "need our help!"---the word hypocrisy doesn't even cut it.
Thus the hipocrisy.
No it's not.
It is, because I say it is and that's the game we are playing.
OK, I'll play.
....
Here's this 3000 page book, it says you own me 30% of what you just made.
Really, let me read it. No, it says I owe you nothing.
Really, OK, I suppose it does.
Number Two: In 1900, 90% of Americans were self employed; now it's about 2%." - Deus Ex
1. Women that were homemakers.
2. Men that worked in agriculture.
The extent to which chains/internet has elliminated these mom and pop stores is staggering... and also why there was so much "self-employment" back then
Disclaimer: I'm making an intelligent guess here; these views are not (AFAIK) backed by any study
They would have more luck by taking Larry Page hostage (and no, it wouldn't work either).
Edit: This would be specifically for individuals hiding their wealth abroad and declaring a lower than actual income, and not for corporations that publish their balance sheets.
The more interesting scenario would be a smaller government trying to embarrass or blackmail the US by doing something similar with THEIR military, and that's the stuff of James Bond movies. ;)
I find it ironic that Google and Apple and FB have extremely well protected physical security surrounding their datacenters, but have trillions of dollars in assets in little Island banking systems which likely have few, and easily accessible, physical undersea cables providing their main services....
If you "transfer" billions of dollars to "Bermuda" or some such - where does that money actually reside? Wouldn't Bermuda have their financial systems hosted in, perhaps, Switzerland?
If you were to cut off internet to the actual island of Bermuda, what actual financial impact would it have on those funds.
Would they be effectively quarantined to Bermuda? Or are they just legally labeled as being under Bermudian financial jurisdiction in whatever financial cloud these DB fields physically live?
Internet access is just a convenience. Phone calls and faxes work fine and larger banks have private networks backed by fiber, microwave and satellite links. If that's all unavailable then records will be moved with the physical cash.
Stopping internet would do nothing. Stopping all digital access would slow down some transactions by hours or days. Stopping all physical and digital access would completely stop transactions but the rest of the global system will continue on and will usually cover for any problems.
So the worst you could is stop transfers for hours or days, and with this kind of money you'll end up facing military action aided by intelligence services that will want you locked up in a hole for a very long time.
edit: just to pre-empt any confusion, I'm not accusing you of wanting to do this. I'm just curious what you think someone interested in this would expect from it. Other than to bloody the noses of the elites and make them a little uncomfortable for a short period, I can't see any real impact unless an attacker goes further than DDOS or cutting cables (e.g. if they were to steal some of the money as well, or wipe records)
Attacking civilians is mostly pointless. Though, that’s also my view on terrorists so I don’t really understand the mindset.