Can you explain your reasoning why you think it's not immoral?
Edit: why was this downvoted? HN is a site where not explaining yourself thoroughly often leads to mod intervention. The parent post didn't explain themselves even remotely.
Edit: why was this downvoted? HN is a site where not explaining yourself thoroughly often leads to mod intervention. The parent post didn't explain themselves even remotely.
If businesses operated in a vacuum from politics, then maybe you could have an argument that taxes have “nothing” to do with morality. In the real world, businesses are lobbying for changes to the tax codes to benefit them, holding disingenuous or rigged contests to extract the maximum concessions from tax authorities, relocating or transferring intellectual property and licensing it back to subholdings to min/max gains and losses, and a myriad of other schemes.
To directly answer the questions you posed: Corporations which incorporate in a state like South Dakota or Delaware to take advantage of incorporation policies, with no intention of operating primarily in those states, the majority of their business conducted in a higher tax state like California, and trying to avoid contributing back to the society of the states that they primarily operate in - yes, those corporations are less moral. They are less moral than companies which are incorporated in e.g. South Dakota where the owner lives in South Dakota, and serves primarily South Dakota residents.
Hungary is harder to answer. Did the corporations of Hungary lobby for lower taxes which resulted in that tax decrease? Does the tax decrease adversely impact Hungary as a whole, or was there a budget surplus which allows the state to lower the rate? Does the relaxed rate improve the lives of “normal” Hungarians? The answers to those, and probably more, questions would guide the answer to the question of morality.
Anyway, this is a long winded way of saying that morality is not a binary choice. It’s the perception of right and wrong guided by context.
The fact that businesses can shop around, or move to other jurisdictions, or lobby politicians, is a good thing. It is a necessary check on government power.
The alternative would be the government having absolute power to raise taxes. I don't trust the government, especially state and local governments, to handle that well. Many would raise taxes to a level that would strangle businesses and harm the economy.
Is there any evidence to support the claim that state and local governments would raise taxes to a level that harm the economy? I’m sure you could find some examples, but does the evidence support that claim in more than a few outlying cases? There’s ample logical reasoning (The Federalist Papers, for example) that state and local governments are more responsive to their populations and that the federal government should be the culprit that “shoots itself in the foot”. Outliers can exist in the inverse as well, as Kansas showed us that it’s possible to reduce taxes so much that it harms the economy!
Also, and I don’t want to come off as too nitpicky here, but I’m pretty sure governments already have absolute power to raise taxes. That is, a non-government organization cannot levy a compulsory fine on you. And don’t take this as a personal attack, but if people don’t know those sorts of things, they are not a very engaged citizen. Since the government is elected by the people, if we have uninformed and disengaged citizens, we should distrust the government. The best way to gain trust, in my opinion, is to be an engaged and informed citizen (and encourage others to be as well!), and to only elect “the best”.
edit: I may have misinterpreted your “absolute power to raise taxes”. I think now that you meant the power to raise taxes with no regard for its consequences vice meaning that another entity could raise taxes. Sorry if I put words in your mouth. In that case, yes “voting with your feet” can influence tax policy, but there are still other methods of doing that which do not require moving. I also want to point out that there’s an injustice in the ability to move in order to lower tax burdens. For example (and IANAL so someone please correct me if I am wrong), Bob’s LA Auto Shop, LLC can’t pick up and relocate its headquarters to Delaware to take advantage of lower taxes like a multinational corporation can to the Isle of Man. Is it moral that a large MNC can, but a mom and pop shop can’t?
I'm not the one claiming it is. I've stated that morality and taxes have no connection. Others in this thread, including you, are claiming that paying less taxes = immoral.
>> Corporations which incorporate in a state like South Dakota or Delaware
A grand total of 3 of the Fortune 500 are incorporated in SD or DE. 110 are in NY or CA. It would appear that by your reasoning, the number of immoral companies who "take advantage of incorporation policies" are overwhelmingly outnumbered by companies with such high morals, they selected the highest tax states.
https://www.statista.com/statistics/303696/us-fortune-500-co...
Looks like your data is paywalled. Is it the same that’s available here? https://hifld-geoplatform.opendata.arcgis.com/datasets/fortu...
Because if so, I think it’s a little bit more complicated. For example, Alphabet’s corporate headquarters is located in Mountain View, but it looks like it is incorporated in Delaware [1].
1: https://abc.xyz/investor/static/pdf/alphabet-certificate-of-...
https://www.delawarebusinessincorporators.com/pages/delaware...
>Second, Delaware’s tax system gives businesses several ways to legally minimize their tax bills. Companies that are incorporated in Delaware but do business in other states don’t have to pay state corporate income tax to Delaware. Some groups accuse Delaware of being a tax haven because the “Delaware loophole” allows companies to declare certain types of revenue in Delaware rather than in the state where the business actually occurred. Delaware also doesn’t tax profits on royalty payments, trademarks, or copyrights.
https://www.mentalfloss.com/article/76951/why-are-so-many-us...
This is hilarious.
Can you explain why that is immoral?
*Call it campaign contributions, or lobbying, or whatever you want. It's paying money to get rules made in your favor, which is bribery.
What is immoral is when someone decreases their contribution to society (in the form of taxes) through something that either does not benefit society as a whole or which is actually harmful.
That clearly benefits the homeowner (lower taxes), while is harmful to society (less tax revenue).
So are people who take the mortgage tax deduction being immoral?
I would argue it a selective tax break that benefits the homeowner 100%.
As I see it, it's not so much that a given instance of home ownership benefits society as a whole so much as it is that I see enabling its members to own a home is a core purpose of society. So I guess I could say it as: it benefits society as a whole because if it doesn't exist then, in my opinion, the society is by definition dysfunctional.[1]
When I say that enabling its members to own a home is a core purpose of society, I don't so much mean this from a white picket fence "American dream" perspective or from a home as investment perspective; although I think both of those perspectives have merit.
Rather, I think it's important that an individual has somewhere that they have autonomy, that they can modify as they see fit, that they cannot be arbitrarily evicted from, where they are their own boss, etc.
Without that:
- I think that it would be difficult for an individual to have enough autonomy to really be a full member of society.
- I think it would be difficult to say that an individual really has any stake in a capitalist society if they do not own any capital.[2]
[1] A more obvious example of similar reasoning might be food. The fact that a given person is able to eat isn't necessarily particularly beneficial to society as a whole. However, I think that most people would say that unless the vast majority of people are able to eat, then a society is dysfunctional.
Clearly in this instance there is some benefit to society as a whole from an individual being able to eat; since that allows them to work more efficiently. However, I think you could also say that home ownership provides psychological and practical benefits that allow individuals to work more efficiently.
[2] I realize that strictly speaking a home isn't capital (unless the owner runs a business out of it); however, I still feel that it can provide a "stake in the system" in the way that other property like clothing or even a car do not.