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While Facebook is not doing everything it can to evade taxation in many countries, right? And let them choose what to do with the money. Why isn't Zuckerberg pl

While Facebook is not doing everything it can to evade taxation in many countries, right? And let them choose what to do with the money. Why isn't Zuckerberg pledging to drive his company as a good citizen?

sokoloff 11y ago
I would call that tax avoidance, not evasion, but no matter. Judge Learned Hand (a real person's name) wrote, "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes." I agree wholeheartedly. I imagine that were I in their shoes, I'd be fairly confident that I could do more good for the world by private philanthropy, directed to causes that I felt compelling, than by fueling general government spending/avarice around the world.
- pen2l 11y ago
  > I imagine that were I in their shoes, I'd be fairly confident that I could do more good for the world by private philanthropy, directed to causes that I felt compelling, than by fueling general government spending/avarice around the world. I think that is beside the point. These companies are violating the spirit of law, not the letter of the law, when they avoid taxes. Take for example, the recent Pfizer/Allergen merger which happened merely for tax-avoidance reasons. It's legal, but it's totally uncalled for and it's clear to see why: a lot of what Pfizer stands on is from NIH-funded research, it's from us the tax-payers. Pfizer should have played fair by paying back, so NIH can fund even more studies, so that more people are employed, so that academia has more breathing room, etc.
  - sokoloff 11y ago
    There are clear interpretations and case law that state that faithful adherence to the letter of the tax law is fine. How is one to interpret the "spirit" of the law when the spirit inferred by one reader is at odds with the text of the law as acted upon by someone else? It's (relatively) easy to show compliance with the letter of the law. It's (essentially) impossible to show compliance with all possible spiritual interpretations thereof. The Internal Revenue Service (of the US) writes: Avoidance of taxes is not a criminal offense. Any attempt to reduce, avoid, minimize, or alleviate taxes by legitimate means is permissible. The distinction between evasion and avoidance is fine yet definite. One who avoids tax does not conceal or misrepresent. He shapes events to reduce or eliminate tax liability and upon the happening of the events, makes a complete disclosure. Evasion, on the other hand, involves deceit, subterfuge, camouflage, concealment, some attempt to color or obscure events, or making things seem other than what they are. Did this Dutch company purchase product/services from this Irish company? Did these two companies merge and the surviving company was the non-US company? Did this executive receive stock options on such-and-such date? Those are all relatively easy questions of fact. Should the surviving entity of the merger have been the US company? (According to whom? Or on what basis? To what end? Which benefits the investors the most? What did the shareholders vote to do with their company? Why should someone else judge that what they did was "legal but improper"?) The real issue is simply that the US is relatively uncompetitive as a corporate domicile (on a rates and particularly on a "worldwide income basis") Attempts to patch the system without addressing this root issue are unlikely to succeed in a clean and sustainable fashion, IMO.
  - russell_h 11y ago
    Can you clarify which law (or IRS rule - I don't mean to be pedantic here), specifically, you feel Facebook is violating the spirit of? Most common tax avoidance strategies are possible due to very deliberate policies in each of the relevant jurisdictions. Its fine to claim that there is something wrong with the laws in question, but I haven't been able to identify one that strategies like the "double-dutch" violate the spirit of.
- milge 11y ago
  Agreed. I'd rather have my taxes being spent on worthwhile endeavors instead of half going to blow up strangers on the other side of the world. $435 hammers to line Dick Cheney's pockets? No thank you. A large portion of my taxes going towards curing cancer? Have some extra.
  - rquantz 11y ago
    Well, military spending is half of discretionary spending, but it's nowhere close to half the federal budget. I'd rather these billionaires and corporations be paying into the commonweal and helping us to pay for the social programs and infrastructure we need that are chosen by the will of the people. Instead they get to choose whatever priority is important to them, which are sometimes helpful (malaria) and sometimes disastrous ("education").
unchocked 11y ago
Your question is a good response to the framing of this philanthropy as "giving back". Indeed, if the point of it is to give back, why not simply mold your corporate behemoth into something kinder and gentler. I don't think this sort of thing is about "giving back" however. I think it's something more ambitious than that: to "do something", do something transformative for the future. Though Zuck's manifesto isn't well thought out yet, I'm stoked that he's committed to doing something with that $45B. Because hoarding up billions of dollars into family dynasties is pretty much doing nothing.
- scott_karana 11y ago
  > Because hoarding up billions of dollars into family dynasties is pretty much doing nothing. Well, his money isn't stuffed under sofa cushions, so it would bankers choosing what to invest in, but your point still stands. ;)
  - KayEss 11y ago
    If the wealth is held as stock then there is no "money" for the bankers to do anything with. At best he can borrow money with the stock as collateral and then allow bankers to invest that.
    - jacquesm 11y ago
      In that case he'd better pray the stock doesn't tank.
sanatgersappa 11y ago
Because most tax money is wasted on wars and special interests.

sokoloff 11y ago

I would call that tax avoidance, not evasion, but no matter. Judge Learned Hand (a real person's name) wrote, "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes." I agree wholeheartedly. I imagine that were I in their shoes, I'd be fairly confident that I could do more good for the world by private philanthropy, directed to causes that I felt compelling, than by fueling general government spending/avarice around the world.

pen2l 11y ago
> I imagine that were I in their shoes, I'd be fairly confident that I could do more good for the world by private philanthropy, directed to causes that I felt compelling, than by fueling general government spending/avarice around the world. I think that is beside the point. These companies are violating the spirit of law, not the letter of the law, when they avoid taxes. Take for example, the recent Pfizer/Allergen merger which happened merely for tax-avoidance reasons. It's legal, but it's totally uncalled for and it's clear to see why: a lot of what Pfizer stands on is from NIH-funded research, it's from us the tax-payers. Pfizer should have played fair by paying back, so NIH can fund even more studies, so that more people are employed, so that academia has more breathing room, etc.
- sokoloff 11y ago
  There are clear interpretations and case law that state that faithful adherence to the letter of the tax law is fine. How is one to interpret the "spirit" of the law when the spirit inferred by one reader is at odds with the text of the law as acted upon by someone else? It's (relatively) easy to show compliance with the letter of the law. It's (essentially) impossible to show compliance with all possible spiritual interpretations thereof. The Internal Revenue Service (of the US) writes: Avoidance of taxes is not a criminal offense. Any attempt to reduce, avoid, minimize, or alleviate taxes by legitimate means is permissible. The distinction between evasion and avoidance is fine yet definite. One who avoids tax does not conceal or misrepresent. He shapes events to reduce or eliminate tax liability and upon the happening of the events, makes a complete disclosure. Evasion, on the other hand, involves deceit, subterfuge, camouflage, concealment, some attempt to color or obscure events, or making things seem other than what they are. Did this Dutch company purchase product/services from this Irish company? Did these two companies merge and the surviving company was the non-US company? Did this executive receive stock options on such-and-such date? Those are all relatively easy questions of fact. Should the surviving entity of the merger have been the US company? (According to whom? Or on what basis? To what end? Which benefits the investors the most? What did the shareholders vote to do with their company? Why should someone else judge that what they did was "legal but improper"?) The real issue is simply that the US is relatively uncompetitive as a corporate domicile (on a rates and particularly on a "worldwide income basis") Attempts to patch the system without addressing this root issue are unlikely to succeed in a clean and sustainable fashion, IMO.
- russell_h 11y ago
  Can you clarify which law (or IRS rule - I don't mean to be pedantic here), specifically, you feel Facebook is violating the spirit of? Most common tax avoidance strategies are possible due to very deliberate policies in each of the relevant jurisdictions. Its fine to claim that there is something wrong with the laws in question, but I haven't been able to identify one that strategies like the "double-dutch" violate the spirit of.
milge 11y ago
Agreed. I'd rather have my taxes being spent on worthwhile endeavors instead of half going to blow up strangers on the other side of the world. $435 hammers to line Dick Cheney's pockets? No thank you. A large portion of my taxes going towards curing cancer? Have some extra.
- rquantz 11y ago
  Well, military spending is half of discretionary spending, but it's nowhere close to half the federal budget. I'd rather these billionaires and corporations be paying into the commonweal and helping us to pay for the social programs and infrastructure we need that are chosen by the will of the people. Instead they get to choose whatever priority is important to them, which are sometimes helpful (malaria) and sometimes disastrous ("education").

unchocked 11y ago

Your question is a good response to the framing of this philanthropy as "giving back". Indeed, if the point of it is to give back, why not simply mold your corporate behemoth into something kinder and gentler. I don't think this sort of thing is about "giving back" however. I think it's something more ambitious than that: to "do something", do something transformative for the future. Though Zuck's manifesto isn't well thought out yet, I'm stoked that he's committed to doing something with that $45B. Because hoarding up billions of dollars into family dynasties is pretty much doing nothing.

scott_karana 11y ago
> Because hoarding up billions of dollars into family dynasties is pretty much doing nothing. Well, his money isn't stuffed under sofa cushions, so it would bankers choosing what to invest in, but your point still stands. ;)
- KayEss 11y ago
  If the wealth is held as stock then there is no "money" for the bankers to do anything with. At best he can borrow money with the stock as collateral and then allow bankers to invest that.
  - jacquesm 11y ago
    In that case he'd better pray the stock doesn't tank.

sanatgersappa 11y ago

Because most tax money is wasted on wars and special interests.