Shit like this makes my head hurt and infuriates me at the same time.
When deciding if your tax minimization strategy is a good thing simply ask yourself what would happen if everyone found a way to pay virtually nothing. The obvious thing in that scenario is that society collapses. This is obviously not a good thing.
Clearly everyone should try to pay a reasonable share. When your strategy is clearly a contrived misuse of an overly complicated tax code that goes against the spirit if not the letter of the law you should be able to figure out what side of the moral line you are on.
That isn't clear to me, because using the government to collect revenue hasn't been demonstrated to be a benefit. This still presupposes that government revenue is inherently beneficial.
I think if everyone found a way to pay virtually nothing, the government would collapse. That's not the same thing as society collapsing, society and the government are not coterminous.
Tax revenues don't go to "society", they go to the government. It is a logical leap to assume a collapse of society when the government loses funding.
The entirety of the population is doing business in dollars that would end up worth nothing which means everything grinds to a halt while people figure out how to reorganize this brave new world. Right now you own what you own courtesy of the government providing armed men to keep others from taking it and courts to settle differences.
This reorganization would inevitably mean that different groups compete to be the new powers that be. The obvious inheritors would be the existing state power structures which controls lots of armed men and women but nothing is stopping people from setting up their own feifdoms and disagreements about who controls what could trivially have to be settled by shooting each other.
It's not like we don't have plenty of examples of failed states collapsing. Look at Yugoslavia for example. Can you provide me with some counterexamples?
https://ourworldindata.org/grapher/life-expectancy-vs-health...
And that's precisely what they do.
The problem doesn't sit at the companies.
1. Politicians are responsible for the laws.
2. Companies are responsible for following the laws.
If you have a beef with any of the above, address the right parties. How they interact and depend on each other is a fact, but also it's not relevant to the above two points. Everyone has a clear responsibility.
Furthermore the phrase "dodged taxes" means "they structured their revenue so they paid less taxes than if they would structure it otherwise". Who the hell says you gotta structure your revenue in order to MAXIMIZE your taxes?
Do you do that? If not, you also "dodge taxes" as far as the media is concerned.
I don't think it's about rules ("gotta"), it's about ethics. I wouldn't say that maximizing taxes is anything, but the desire to minimize taxes is definitely anti-social.
In theory all the power for determining laws is supposed to lie in the hands of the politicians, but in practice a significant fraction of the power lies in the hands of corporations. So it doesn’t make sense to only look at part of the power structure that has set the system up this way.
When a company plans their tax they can either use the laws as they're intended (tax planning), they can deceive the tax authorities in order to illegally reduce their tax burden (tax evasion) or they can use the laws in ways which aren't necessarily intended, but which aren't yet outright illegal because we haven't had a court ruling yet (tax avoidance).
It's really easy to say "just change the law", but there are problems with that.
Prosecuting complex tax cases is fantastically expensive, and so tax authorities tend to only go to court when i) the case is obvious and ii) everything else has failed. (This includes for the small guy too -- if I chose not to pay my tax there are escalating steps of intervention before I get prosecuted). This means we simply don't know if a particular tax avoidance scheme is illegal or not, and we're unlikely to find out unless the tax authorities move to a more punitive regime.
And we don't necessarily want to give more power to the state. We want to limit the power of the state to some extent, which is why a lot of pretty unpleasant behaviours are perfectly legal, and it's why we impose that "beyond all reasonable doubt" requirement on criminal conviction.
Corporate values aren't (at least they shouldn't be) nonsense. A company could say "we do this because it's legally mandated and we don't have a choice", but that's the worst reason for doing something. Companies that make use of education, transport infrastructure, policing, healthcare, (all the things that are paid for by taxation) should pay their fair amount of tax, rather than using the law in weird unexpected ways to reduce their tax burden by an unreasonable amount.
There is a cultural thing going on here. No-one in the UK is saying that companies should go out of their way to pay more tax than they need to. And reducing their tax burden a bit is probably seen as okay. But we do have the concept of "taking the piss", and a lot of these companies are taking the piss. They need to realise that public tolerance for this is low and reducing, and that if they don't change their behaviours they're going to see increased tax regulation.
If you are feeling masochistic then I highly recommend these two books. 1. Moneyland [1] 2. Treasure Islands [2]
One can set up corporate structures in a way that will make those looking for the real owner stuck in an infinite loop spread across the globe.
[1] https://www.theguardian.com/books/2018/sep/07/moneyland-oliv...
[2] https://www.goodreads.com/book/show/10197857-treasure-island...
At a minimum, they should pay that tax savings towards vaccine rides. I won’t hold my breath.
And let's not forget that the companies frequently play an outsize role in influencing the written laws. The line between "playing the game" and "cheating" is very fuzzy in real world systems.
It's hard to be mad at someone once you realize you'd do the same thing if you were in their shoes.
Loopholes like this should be illegal, but their existence ~obligates executives to take advantage of them (fiduciary duty). You'd just be bad at business if you didn't.
As someone who wants to be good at business, I can't get mad at the players here – just the game.
this is projecting.
your comment goes on a bit more like this but i'm not going to quote all of it
there has been a cultural failure of some sort that rewards people that think like this, and encourages this kind of behavior.
maybe we should expect people, especially people in positions of responsibility, to not loot our lives out from under us
It's foolish to expect people who are in a position of responsibility _to their shareholders_ to act like they're responsible _to you_. They're not.
Close the loopholes, raise the taxes (wealth, cap gains, high-earner income, corporate, etc) and stop vilifying people for making money.
> stop vilifying people for making money
Why? They're doing it in a vile way.
Talking about how we should get them to change their morality may give us the feel goods, but that's about all it'll do.
It is, though. When outrage is misdirected, it lets the true bad guys get off scot–free.
Sure, there are some people who can be angry about everything all day long, but everyone else grows tired to listening to them, and they lose credibility for when it counts.
And frankly I think it's more effective. If you try to argue about tax policy, it's easy for a well-educated opponent to kind of dazzle you with cherry-picked stats and economic models and say "well actually this lower corporate rate is better for the economy, just look at these graphs". Anyone can find a credentialed economist to back up their position. It's much harder to look at someone straight-faced and say "actually greed is good" and "we would go bankrupt immediately if we had to pay a single extra cent in taxes". I mean they try, and it works on some people, but not as many. And whatever issue can get the most widespread agreement is the one most likely to spark some change.
And more effective? Has the railing about this since the 90s changed anything there?
If you're in business, you compete with people who put their jobs before society, so you don't really have much choice. Call that a race to the bottom if you want, but it's a race – and races need rules.
If you live in the US, I'd encourage supporting Represent.US, an anti-corruption / good-governance group. There is a critical anti-corruption, pro-democracy bill that they support nearing the floor of the senate now, and they need more people to make calls to voters.
Then reflect that in the law! Don’t setup a bunch of loopholes and then get mad when corporate tax accountants find them and use them.
In the business world there are mountains and mountains of tax incentives for employing this type of person, that type of person, building here, building there, etc. What you see in front of you is what the law is encouraging and asking companies to ignore “obviously wrong” tax setups is naive.
The line is super blurry, all the way down to a 1 person business expensing anything and everything “related” to their business.
That “cultural failure” is the consumers’ purchasing at the cheapest price available. How does a manufacturer compete with one that uses sweatshop labor if people choose to buy the sweatshop labor products? How does Lyft compete with Uber if Uber minimizes tax expenses and can price lower than Lyft?
Going after specific companies for legal maneuvers is a waste of time and energy. At the end of the day, the voting populace will punish whoever can be blamed for limiting their consumption, and the voting populace is to blame. Educating and convincing them to support politicians who support better laws is the only solution.
After I secured enough money to comfortably retire though, every dollar I got through unethical means would feel less like "securing my future economic safety" and more like "unabashed greed"
Speak for yourself, bud.
>obligates executives to take advantage of them (fiduciary duty)
Is a piece of wisdom that exists entirely on the internet unconnected with objective reality. You are obligated to in the general case to serve the shareholders interests but you are absolutely legally entirely able to take a broader and deeper view than this quarters profits and use your own judgement.
Take this situation. Do you really believe that had they NOT done this someone could have gone to court to legally compel the CEO to set up shell corps and tax havens? That isn't have fiduciary duty works. Fiduciary duty means you don't screw the shareholders to help yourself it doesn't mean you are obliged to substitute their judgement for yours or toss out vital but nebulous goals like long term profitability, reputation, and ethics. If they have enough control they have the privilege of firing you not substituting their judgement for yours.
E.g. if (completely made-up example) Lyft were practicing this kind of tax avoidance and Uber did not, the former would have potentially more budget left over to undercut the latter on prices and/or salaries.
So proper laws are still needed for an even playing field. Not that I condone Uber's practice anyway.
Who do you think politicians have their dinner with? Is it a middle class tax paying person or some rich businessmen friends?
Who will get his sympathy? Extrapolate from there.