6 ms·

As an aside, I'm surprised tax code simplification isn't a bigger issue in this current US presidential election. Apple and Google hold billions of dollars outs

by sna1l 11y ago

As an aside, I'm surprised tax code simplification isn't a bigger issue in this current US presidential election. Apple and Google hold billions of dollars outside of the US in order to pay lower taxes. I would have thought more people would be looking for solutions to this common problem.

olegious 11y ago
Tax policy is not something John Public understands. It is much easier to discuss, focus on and sell sound bites.
- sandebert 11y ago
  Also known as bike-shedding. https://en.wikipedia.org/wiki/Law_of_triviality https://en.wikipedia.org/wiki/Law_of_triviality
cordite 11y ago
Simplification would mean that some people pay more, some people pay less, but if people are told they will have to pay more by an opponent to simplification, then they will likely join that opponent. There is very little critical thinking among the peoples these days, and I fear that sets us on a dangerous societal path.
- ams6110 11y ago
  People would be fine with paying more, as long as the more is less than what they spend on avoidance now.
bendykstra 11y ago
The problem demands a technocratic answer, but it's an emotional issue. Candidates could endorse incentives for companies to pay more tax (Clinton has, quietly[1]), but that would not satisfy voters who want to see companies shamed and punished. [1] http://www.alternet.org/hillary-clintons-plush-life-corporate-lecture-circuit http://www.alternet.org/hillary-clintons-plush-life-corporat...
rhizome 11y ago
Probably has something to do with "tax simplification" always getting hijacked by estate and capital gains tax goons.
dietrichepp 11y ago
I don't see how the money held outside the US is connected to tax code simplification. If anything, taxing that money would make the tax code more complicated, not less complicated.
- ams6110 11y ago
  The main issue is it would be taxed too highly if it were brought back, thus it's held outside.
- sna1l 11y ago
  My thought: More complicated tax code --> More loopholes, so Less complicated tax code --> Less loopholes. But I'm not tax expert by any means.
- devishard 11y ago
  It might be complicated to tax that money, but if we simplified tax code there would be fewer complicated ways in which people can legally get the money offshore in the first place. Tax simplification is a prevention, not a cure.
  - icebraining 11y ago
    It wouldn't help in the mentioned cases, though - the money was received offshore in the first, it didn't "go" there.
    - lijason 11y ago
      Is that true? I'm not an accountant, but I thought a lot of companies do things like give ownership of a technology to a foreign subsidiary and then have their US operation "license" that technology at high cost to move profits overseas as well. Maybe that loophole was closed though?
- tomschlick 11y ago
  The general idea is that those companies would like to bring that money back to fund various things. They can't without getting hit with a high tax rate so they keep it outside. If we simplified the tax code it would help curb the max exodus of that money and if we had a lower rate they would bring that money back in.
ams6110 11y ago
One of the candidates still in contention has as one of his feature agenda items to simplify the tax code and eliminate the IRS "as we know it."
- sna1l 11y ago
  If you are talking about Ted Cruz, I think his idea is a little too simple.
valgaze 11y ago
Not to beat a dead horse, but not-so-shockingly a certain enormous software firm that happens to tax prep software was opposed to simplification too: * http://www.theverge.com/2013/3/26/4150900/intuit-lobbies-against-returns-free-tax-filing-system http://www.theverge.com/2013/3/26/4150900/intuit-lobbies-aga... * http://theweek.com/articles/466220/why-turbotax-tried-make-taxes-more-complicated http://theweek.com/articles/466220/why-turbotax-tried-make-t... * https://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing https://www.propublica.org/article/how-the-maker-of-turbotax...
- semi-extrinsic 11y ago
  This is a tangential issue (consumer vs corporate tax), but the US tax system is beyond ridiculous. In the socialist democracy where I live, doing my taxes is literally a no-op. It just fixes itself (with a possibility for me to submit correct numbers if the govt. calculated ones are wrong.)
  - cmurf 11y ago
    If you think U.S. personal taxes are ridiculous (and they are), consider small business taxes. The Schedule C drags in all kinds of craziness, many worksheets don't even get filed but you have to do them to get the number on the form right. And then 1120S? That was the form I gave up on and hired a CPA.
    - Pluizer 11y ago
      I need S-expressions to parse question 8 on that form.
  - robbiep 11y ago
    Agreed - why they don't use a PAYG/PAYE system is crazy.
- rglullis 11y ago
  Living in Germany now, I think things in the US are actually better than here. All years I lived in the US I paid less than $50 and was done with the thing in a couple of hours. In Germany, not only the tax code is complicated, you MUST go through a Steuerberater. There are some associations that can help you if you don't have any property and have a contract job (angestellt). And it still costs more in time and money than just buying TurboTax. It's incredible to think that Brazil has managed, despite all of the backwards mentality when dealing with bureaucracy, actually manages to be the best example I can give of dealing with taxes: the Brazilian IRS provides a free Java-based tool that is reasonably easy to use.
nihonde 11y ago
"...hold billions of dollars outside of the US in order to pay lower taxes." You might also say that they elect to keep money earned outside the US away from the US tax code because they have a duty to their shareholders to minimize their exposure to taxes in general.
- johnchristopher 11y ago
  What's your point ? Are you saying they are morally right to avoid taxes or shifting the blame to the shareholders ? (I seem to recall Google avoided paying taxes in the UK on benefits made in the UK by transferring the money elsewhere).
  - vixen99 11y ago
    Of course people are morally right to avoid taxes! Only an idiot would act otherwise. You simply organize your affairs so that you comply with the fiscal rules and "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" -- Lord Clyde in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] As to the objection to low tax locations: 'It’s pure tax protectionism: governments don’t produce widgets, so they are all in favour of free trade in widgets; but they do produce taxes, so they want to keep out the competition. Low-tax jurisdictions act as a safety valve that makes it harder for politicians to oppress their citizens with crippling taxes'. Eamonn Butler: http://www.adamsmith.org/blog/ http://www.adamsmith.org/blog/ In the EU, merely trying not to buy goods subject to VAT is a tax avoidance measure!
    - johnchristopher 11y ago
      > Of course people are morally right to avoid taxes! That's a major postulate. Especially regarding the morality of it and the practicality. Frankly that's another debate and I think we can already agree to disagree. I'll point out that Google is not people though and the mass of money being evaded that way can't be justified in the eyes of the people down the social ladder who are told to buckle up their seat belt once again because the 'conomy is crashing again and they are going to need to make sacrifices to save banks (again).

by sna1l 11y ago

olegious 11y ago

Tax policy is not something John Public understands. It is much easier to discuss, focus on and sell sound bites.

sandebert 11y ago
Also known as bike-shedding. https://en.wikipedia.org/wiki/Law_of_triviality https://en.wikipedia.org/wiki/Law_of_triviality

cordite 11y ago

Simplification would mean that some people pay more, some people pay less, but if people are told they will have to pay more by an opponent to simplification, then they will likely join that opponent. There is very little critical thinking among the peoples these days, and I fear that sets us on a dangerous societal path.

ams6110 11y ago
People would be fine with paying more, as long as the more is less than what they spend on avoidance now.

bendykstra 11y ago

The problem demands a technocratic answer, but it's an emotional issue. Candidates could endorse incentives for companies to pay more tax (Clinton has, quietly[1]), but that would not satisfy voters who want to see companies shamed and punished. [1] http://www.alternet.org/hillary-clintons-plush-life-corporate-lecture-circuit http://www.alternet.org/hillary-clintons-plush-life-corporat...

rhizome 11y ago

Probably has something to do with "tax simplification" always getting hijacked by estate and capital gains tax goons.

dietrichepp 11y ago

I don't see how the money held outside the US is connected to tax code simplification. If anything, taxing that money would make the tax code more complicated, not less complicated.

ams6110 11y ago
The main issue is it would be taxed too highly if it were brought back, thus it's held outside.
sna1l 11y ago
My thought: More complicated tax code --> More loopholes, so Less complicated tax code --> Less loopholes. But I'm not tax expert by any means.
devishard 11y ago
It might be complicated to tax that money, but if we simplified tax code there would be fewer complicated ways in which people can legally get the money offshore in the first place. Tax simplification is a prevention, not a cure.
- icebraining 11y ago
  It wouldn't help in the mentioned cases, though - the money was received offshore in the first, it didn't "go" there.
  - lijason 11y ago
    Is that true? I'm not an accountant, but I thought a lot of companies do things like give ownership of a technology to a foreign subsidiary and then have their US operation "license" that technology at high cost to move profits overseas as well. Maybe that loophole was closed though?
tomschlick 11y ago
The general idea is that those companies would like to bring that money back to fund various things. They can't without getting hit with a high tax rate so they keep it outside. If we simplified the tax code it would help curb the max exodus of that money and if we had a lower rate they would bring that money back in.

ams6110 11y ago

One of the candidates still in contention has as one of his feature agenda items to simplify the tax code and eliminate the IRS "as we know it."

sna1l 11y ago
If you are talking about Ted Cruz, I think his idea is a little too simple.

valgaze 11y ago

Not to beat a dead horse, but not-so-shockingly a certain enormous software firm that happens to tax prep software was opposed to simplification too: * http://www.theverge.com/2013/3/26/4150900/intuit-lobbies-against-returns-free-tax-filing-system http://www.theverge.com/2013/3/26/4150900/intuit-lobbies-aga... * http://theweek.com/articles/466220/why-turbotax-tried-make-taxes-more-complicated http://theweek.com/articles/466220/why-turbotax-tried-make-t... * https://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing https://www.propublica.org/article/how-the-maker-of-turbotax...

semi-extrinsic 11y ago
This is a tangential issue (consumer vs corporate tax), but the US tax system is beyond ridiculous. In the socialist democracy where I live, doing my taxes is literally a no-op. It just fixes itself (with a possibility for me to submit correct numbers if the govt. calculated ones are wrong.)
- cmurf 11y ago
  If you think U.S. personal taxes are ridiculous (and they are), consider small business taxes. The Schedule C drags in all kinds of craziness, many worksheets don't even get filed but you have to do them to get the number on the form right. And then 1120S? That was the form I gave up on and hired a CPA.
  - Pluizer 11y ago
    I need S-expressions to parse question 8 on that form.
- robbiep 11y ago
  Agreed - why they don't use a PAYG/PAYE system is crazy.
rglullis 11y ago
Living in Germany now, I think things in the US are actually better than here. All years I lived in the US I paid less than $50 and was done with the thing in a couple of hours. In Germany, not only the tax code is complicated, you MUST go through a Steuerberater. There are some associations that can help you if you don't have any property and have a contract job (angestellt). And it still costs more in time and money than just buying TurboTax. It's incredible to think that Brazil has managed, despite all of the backwards mentality when dealing with bureaucracy, actually manages to be the best example I can give of dealing with taxes: the Brazilian IRS provides a free Java-based tool that is reasonably easy to use.

nihonde 11y ago

"...hold billions of dollars outside of the US in order to pay lower taxes." You might also say that they elect to keep money earned outside the US away from the US tax code because they have a duty to their shareholders to minimize their exposure to taxes in general.

johnchristopher 11y ago
What's your point ? Are you saying they are morally right to avoid taxes or shifting the blame to the shareholders ? (I seem to recall Google avoided paying taxes in the UK on benefits made in the UK by transferring the money elsewhere).
- vixen99 11y ago
  Of course people are morally right to avoid taxes! Only an idiot would act otherwise. You simply organize your affairs so that you comply with the fiscal rules and "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" -- Lord Clyde in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] As to the objection to low tax locations: 'It’s pure tax protectionism: governments don’t produce widgets, so they are all in favour of free trade in widgets; but they do produce taxes, so they want to keep out the competition. Low-tax jurisdictions act as a safety valve that makes it harder for politicians to oppress their citizens with crippling taxes'. Eamonn Butler: http://www.adamsmith.org/blog/ http://www.adamsmith.org/blog/ In the EU, merely trying not to buy goods subject to VAT is a tax avoidance measure!
  - johnchristopher 11y ago
    > Of course people are morally right to avoid taxes! That's a major postulate. Especially regarding the morality of it and the practicality. Frankly that's another debate and I think we can already agree to disagree. I'll point out that Google is not people though and the mass of money being evaded that way can't be justified in the eyes of the people down the social ladder who are told to buckle up their seat belt once again because the 'conomy is crashing again and they are going to need to make sacrifices to save banks (again).