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Corporations have a fiduciary responsibility to their shareholders to reduce their tax burden to the lowest possible levels. Assuming the tactics they embrace
by downandout 10y ago
Corporations have a fiduciary responsibility to their shareholders to reduce their tax burden to the lowest possible levels. Assuming the tactics they embrace are legal, they are doing exactly what they can and should.
- andrewprock 10y agoYet, they also have an ethical responsibility to the society in which they operate. Being legal and ethical are two different things.
- deleted 10y ago[deleted]
- mrschwabe 10y agoWhat if the taxes are unethical?
- andrewprock 10y agoThat's like asking "what if profits are unethical?"
- mrschwabe 10y agoWhy would profits be unethical?
- bobwaycott 10y agoProfits would be unethical if they were derived from unethical business practices. This isn't difficult to imagine.
- mrschwabe 10y agoOkay fair point. Though I don't necessarily see the correlation to taxation. I assume what perhaps is being implied is that the money from taxation can be used for ethical or unethical practices (as oldmanjay points out). Yet that analogy skips how tax is only possible with profit, not to mention the fundamental issue of whether or not taxation of profit is ethical in the first place.
- bobwaycott 10y agoWell, your original question was in response to an assertion that a corporation has an ethical responsibility to its society. You asked what if the taxes are unethical, which strikes me as a bit silly at best. I only offered a suggestion to your second question of why certain profits would be considered unethical. The matter of the choices made by leaders who spend tax revenue is independent of levying, paying, and collecting taxes. If you have an argument that describes how taxing profits is unethical in contemporary society, as they are legislated by elected representatives, I'm sure there are others beside me who'd love to read it.
- jedmeyers 10y agoThen taxes is not the way to remove those profits from the company.
- bobwaycott 10y agoThat wasn't the question I was answering.
- spdy 10y agoHow can a tax be in this category?
- oldmanjay 10y agoThere are many ways a tax can be unethical. It may finance torture, invasion, and fomenting coups in undeveloped nations that lead to widespread suffering. For example.
- bobwaycott 10y agoThat is not an ethical problem with the tax, but with the choices made by leadership on policies and budgets.
- hueving 10y agoSure it is. Taxes can be levied for very specific purposes. Even ignoring that category of taxes, if you find that a whole country is operating immorally, then funding that company is immoral.
- spdy 10y agoBut this is not the context we are talking about here. Spain is part of the EU and the so called "1st" world.
- lostlogin 10y agoTo reply to a comment I can't reply to: spdy 7 minutes ago But this is not the context we are talking about here. Spain is part of the EU and the so called "1st" world. I'm not sure if you're being tongue in cheek or not, but the 1st world may have less repression and human rights violations but it doesn't have none. And member states have invaded other countries in recent memory, have been involved in torture, institutional racism, etc.
- bobwaycott 10y agoFYI: you can reply to any comment by clicking on the n [minutes/hours/days] ago link.
- kafkaesq 10y agoWhat if the taxes are unethical? Doesn't matter -- when the principals signed documents agreeing to incorporate, they simultaneously agreed to abide by the what the law says in regard to paying taxes due as the law requires. If they thought these laws were "unethical"... well, that was their chance to make a principled stand against them.
- ZacharyPitts 10y agoFiduciary responsibility to maximize profits / reduce tax burden is a myth. https://news.ycombinator.com/item?id=7985690 https://news.ycombinator.com/item?id=7985690
- downandout 10y agoThere are legitimate discussions that can be had about the specific strategies that companies should use to maximize shareholder value. For example, paying higher wages might mean better employees and ultimately more profits despite the increased costs. Long-term investments in R&D might result in higher overall value for the company, despite the short-term hit to the balance sheet. However, I don't think a legitimate argument can be made that companies should pay what amount to optional taxes (taxes they could avoid but don't). Lawmakers are free to change the laws, but large corporations will always pay the minimum allowed by those laws.
- andrewprock 10y agoOf course there is. I think there is a strong economic consensus that government subsidies can be bad. Your argument essentially invalidates that and supports a world where legal corruption is moral.
- hueving 10y ago>Your argument essentially invalidates that and supports a world where legal corruption is moral. No it doesn't. It implies that the correct fix is to eliminate tax loopholes, not attempting to guilt a corporation into paying more, which is about as effective as guilting the sun into cooling down.
- andrewprock 10y agoWell, now your arguing "that companies should pay what amount to optional taxes" by closing tax loopholes.
- munificent 10y agoHow does that thinking apply when you consider that companies actively lobby and work to affect the laws? Are you arguing that companies have a responsibility to change laws to maximize their profits? If a company could get a law passed that let them, say, remove all environmental restrictions, are you arguing that they should do that? Do their fiduciary responsibilities trump their social ones?
- downandout 10y agoFor-profit corporations are not formed to serve the public good. They are formed to make money for their shareholders. They can and should always act in their own interest. Lawmakers exist specifically to serve the public good. If they are allowing lobbyists to affect this responsibility, then they should be voted out of office. So yes, corporations that can afford to do so have a responsibility to try to get laws passed that favor them, and elected lawmakers have a responsibility to the public to ensure the laws that they pass are in the public interest.
- HappyDreamer 10y agoA super interesting question. If a company attempts to abolish environmental restrictions, in order to, say, get to sell food with carcinogenic substances, and in that way make more money — then one viewpoint can be, that the company attempts to make money by killing people. I.e. attempted murder. Therefore the executives and people at the company, responsible for lobbying / bribing politicians, in order to remove all environmental restrictions so that the company can sell poisonous food — they should go to prison. Right now I think that's what I wish would happen. Tax evasion (= money "only"), though, is very different from removing environmental restrictions (= killing people).
- smokeyj 10y agoSo lobbying is the equivalent of murder.. but the party accepting the bribe.. that was entrusted to protect you from murderers.. should not go to prison? Frankly, in this picture you've painted, I'm not sure what the point of this bribe accepting party is. This is like having a body guard that might shoot you if there's a higher bidder. The whole point of the body guard is to protect you from killers, but now he's shopping around for contracts on your head. It's almost like the State having a monopoly on violence is paradoxical to it's alleged end goal.
- disordinary 10y agoThinking like this is why capitalism sucks. You can have socially reprehensible investors and companies, you can also have too much money. Don't be evil my arse.