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Fiduciary responsibility to maximize profits / reduce tax burden is a myth. https://news.ycombinator.com/item?id=7985690 https://news.ycombinator.com/item?id=7

Fiduciary 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 ago
There 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 ago
  Of 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 ago
      Well, now your arguing "that companies should pay what amount to optional taxes" by closing tax loopholes.
      - zardeh 10y ago
        They're no longer optional at that point.
- bobwaycott 10y ago
  That you cannot think of such an argument doesn't mean much. That such possible arguments wouldn't obtain "legitimacy" in your mind explains far more about your conception of the role of business in society. There are no optional taxes—any company that actively seeks ways to avoid taxes is not dealing justly or ethically with the society in which it exists. The same goes for citizens. A healthy and just society cannot exist when its citizens, and their corporations, seek to enjoy all the benefits of citizenship and the services provided, but simultaneously work diligently to avoid upholding their end of the arrangement to support and perpetuate a healthy and just society.
  - hueving 10y ago
    You are free to overpay on your taxes as well. I assume based on your reasoning that you give the government your entire income minus expenses. Governments have the ability to levy taxes. If they need money they should levy a tax. It's that simple. There is no 'right amount' that a company should be paying that is more than the law requires them to pay.
    - bobwaycott 10y ago
      You appear to be responding to things I have not said. No suggestion at all of right amounts or paying more than the law requires.
      - hueving 10y ago
        No, your comment quite clearly implies that the corporations should not utilize the tax laws to pay the minimum required amount of taxes. You use words like 'avoid' to imply that it's evasion, but it's 'avoiding' in the same way as someone who 'avoids' taxes by taking a deduction for a dependent.
        bobwaycott 10y ago
        No, you've misread and inserted your own ideas as what I meant. The comment I replied to used 'avoid' in describing 'optional taxes'. I reused the word in disagreeing with the notion there are optional taxes, particularly as these allegedly optional taxes were suggested as taxes a corporation took action specifically to avoid. [Edit]: Moreover, you still fail to address how I've suggested any notion of right amounts or paying more than the law requires. I have not. Since the comment I replied to used 'avoid', and you think avoid implies evading taxes, then you seem to assert I should understand the GP to be saying optional taxes are those taxes a company can take action to evade. This is even more problematic. The effort a corporation expends to avoid taxes, such as those under scrutiny in the matter at hand, are not at all homologous to electing to take a dependent exemption for an individual citizen. Reducing one's tax bill via deductions and elected credits is not the same as going to great lengths to create special structures that enable a corporation to avoid tax bills altogether.

Fiduciary 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 ago

There 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 ago
Of 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 ago
    Well, now your arguing "that companies should pay what amount to optional taxes" by closing tax loopholes.
    - zardeh 10y ago
      They're no longer optional at that point.
bobwaycott 10y ago
That you cannot think of such an argument doesn't mean much. That such possible arguments wouldn't obtain "legitimacy" in your mind explains far more about your conception of the role of business in society. There are no optional taxes—any company that actively seeks ways to avoid taxes is not dealing justly or ethically with the society in which it exists. The same goes for citizens. A healthy and just society cannot exist when its citizens, and their corporations, seek to enjoy all the benefits of citizenship and the services provided, but simultaneously work diligently to avoid upholding their end of the arrangement to support and perpetuate a healthy and just society.
- hueving 10y ago
  You are free to overpay on your taxes as well. I assume based on your reasoning that you give the government your entire income minus expenses. Governments have the ability to levy taxes. If they need money they should levy a tax. It's that simple. There is no 'right amount' that a company should be paying that is more than the law requires them to pay.
  - bobwaycott 10y ago
    You appear to be responding to things I have not said. No suggestion at all of right amounts or paying more than the law requires.
    - hueving 10y ago
      No, your comment quite clearly implies that the corporations should not utilize the tax laws to pay the minimum required amount of taxes. You use words like 'avoid' to imply that it's evasion, but it's 'avoiding' in the same way as someone who 'avoids' taxes by taking a deduction for a dependent.
      - bobwaycott 10y ago
        No, you've misread and inserted your own ideas as what I meant. The comment I replied to used 'avoid' in describing 'optional taxes'. I reused the word in disagreeing with the notion there are optional taxes, particularly as these allegedly optional taxes were suggested as taxes a corporation took action specifically to avoid. [Edit]: Moreover, you still fail to address how I've suggested any notion of right amounts or paying more than the law requires. I have not. Since the comment I replied to used 'avoid', and you think avoid implies evading taxes, then you seem to assert I should understand the GP to be saying optional taxes are those taxes a company can take action to evade. This is even more problematic. The effort a corporation expends to avoid taxes, such as those under scrutiny in the matter at hand, are not at all homologous to electing to take a dependent exemption for an individual citizen. Reducing one's tax bill via deductions and elected credits is not the same as going to great lengths to create special structures that enable a corporation to avoid tax bills altogether.