Hacker News Reader

Comment by wklauss | Hacker News Reader

what should a for-profit company do, then, once its successful?

they should continue to make great products and build upon their past success. you may not understand the tax angle on their cash, or perhaps you don't care. but i don't think making a profit is mutually exclusive with social responsibility, and i think paying taxes on profit is the deal we signed up for by operating businesses in the US.

> I think paying taxes on profit is the deal we signed up for by operating businesses in the US.

Unfortunately, the obligations of a corporation are such that they have to maximize profits. Avoiding taxes in those ways is not illegal, so big corporations are obligated to do it.

Bullshit. I'm sick of hearing this myth to justify immoral behaviour of corporations. The owners of a corporation can freely define its purpose. There is no legal obligation to maximize profits. And in most countries (I can't speak for the Anglo-American system), it would not be possible to sue the management for not doing tax-avoidance unless the shareholders very specifially required the management to do so at a general assembly.

(Sorry, I don't know the exact definitions here)

Couldn't the shareholders dismiss the Board of Directors if they deem they are making decisions that are not in the best interest of the share price?

They do not need a reason to dismiss the board, a majority vote suffices. The shareholders own the company, so they can install whatever board they like for whatever reason they like. I'm not aware of any board that got dismiseed for not aggressively optimizing taxes. Similarily, shareholders rarely complain about philantropic programmes of large corporations, for example this: http://www.exxonmobil.com/Corporate/community.aspx

Thanks.

Let's be honest, if Facebook decided to give back their $430 million tax credit and pay 40% on their $1.1 billion of profit, their share price would take a major dive.

Do you think the board would not be dismissed?

(Same goes for Apple, Google, etc. etc.)

http://www.forbes.com/sites/robertwood/2013/02/19/tax-increa...

Probably not since I think Zuckerberg et al controls the board.

I hear this a lot, but it's not really true in practice. Suppose that natural resource extraction becomes temporarily more profitable than software. Do software companies suddenly switch get into the mining business?

The maximize profit argument is not an absolute imperative, and is often used to justify bad behaviour.

> paying taxes on profit is the deal we signed up for by operating businesses in the US.

What happens when you don't sold your product in the US? Why does the profit of Apple selling an iPad in UK have to result in them paying taxes in US instead on UK?

Why does Apple Operating Europe (Cork, Ireland, 100% owned by Apple Inc. but not operated in the US) has to pay them?

I really understand and adhere to the basic idea you are trying to defend but it's just not so simple with multinationals (Apple or any other), especially if the regulatory system leaves enough holes for them to make structures like this.

Reply on news.ycombinator.com