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I'm pretty sure they are paying their taxes. To pay the minimum allowed by law is their fiduciary duty.

plesner 10y ago
It's a common misapprehension but it's just not correct. There is no such thing as a fiduciary duty to minimize taxes. See https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_under_Delaware_corporate_law https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_und....
- loeg 10y ago
  Best interest of the company usually includes producing the most income for shareholders, which involves minimizing expenses. Taxes are an expense. It may not be written down in stone but it follows logically from other principles.
  - deleted 10y ago
    [deleted]
  - plesner 10y ago
    If what you're saying is true then it's easy to provide evidence: just find a case where a company has been successfully sued for not minimizing their taxes sufficiently. I've never heard of such a case and I can't imagine how it could exist and not be mentioned every time a company receives criticism for evading taxes.
    - Spivak 10y ago
      What you're saying is ridiculous. No company would be sued for overpaying their taxes but their accountants would certainly be fired. Assuming you're from the US, every year you have the choice to take the standard deduction or itemize. Do you ever feel guilty for choosing the option that lessens your tax burden? Why would you hold a company to a higher standard? If you think that companies should pay more taxes, then push your government to close the loopholes they're using and/or raise taxes. If you're counting on people to 'do the right thing' when they're directly incentivized not to you're going get nothing but disappointment.
      - plesner 10y ago
        The original comment said it was their fiduciary duty to minimize taxes. It's not - exploiting loopholes is a choice, not a legal obligation. You're talking about incentives which is a different discussion. There are incentives that go the other way too: evading taxes looks bad, it's bad for business if society crumbles for lack of revenue, morally it's wrong to benefit from infrastructure, education, etc and not contribute back. But that's not the point I was addressing.
    - JumpCrisscross 10y ago
      > just find a case where a company has been successfully sued for not minimizing their taxes sufficiently If I owned a company overpaying taxes I'd seek to have them acquired (priced using a tax-efficient income assumption) or management replaced. Suing would be unlikely. That said, I agree with your general point that no fiduciary obligation is likely violated. It's just bad business.
- seanmcdirmid 10y ago
  If you believe in natural selection, then those companies that do better at minimizing taxes are more likely to survive than those that don't, meaning the tax minimizing companies we see now are simply the result of a natural progression.
  - escape_goat 10y ago
    I know that you are saying something that sounds true to you, so I am going to walk through the logic so that you can re-evaluate how much attention you are paying to critical thinking on these matters. What you're proposing is referred to as 'Social Darwinism'. In this application it is used in a pseudo-logical fashion to beg the question entirely and falsely imply the justification of a lemma. Your argument is as follows. "If you believe in (1) [natural selection applied to companies], then (2) [causal hypothesis: '1' leads to 'type'], meaning that (3) the [companies of type] we see now are the result of [natural selection applied to companies]." I hope it is apparent when you look carefully that the 'companies of type' we are seeing now would be simply the result of natural selection in any case, that there is no support for the causal hypothesis presented, and that the causal hypothesis is not in fact a logically necessary implication of the original lemma. The reason that this might feel meaningful, rather than be at first glance a tangle of errors, is that it involves the juncture between a hypothesis for which you feel you have evidence (and do!) with a core belief. Your hypothesis: "companies that do better at minimizing taxes are more likely to survive than those that don't." Your belief: "markets are efficient and the best economy arises when companies are allowed to compete without interference." The difficulty here is in the confusion of the two intellectual contexts. Natural selection is a descriptive theory about how what is came to be. Market libertarianism is a prescriptive theory about how what should be can come to be. They are not interrelated. Under condition of Soviet Market, natural selection will still exist. Even if regulatory capture helps a company survive instead of perish, libertarian theory still advocates against it. If you believe in natural selection applied to companies, then what we have here is the natural and almost predictable extinction event of those companies that over-optimized on minimizing taxes. However, the belief in "natural selection applied to companies" is essentially meaningless once you decouple it from action or advocacy; coupled to advocacy, it is incoherent. It inherits absolutely no scientific justification or intellectual rigour from biology.

It's a common misapprehension but it's just not correct. There is no such thing as a fiduciary duty to minimize taxes. See https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_under_Delaware_corporate_law https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_und....

loeg 10y ago
Best interest of the company usually includes producing the most income for shareholders, which involves minimizing expenses. Taxes are an expense. It may not be written down in stone but it follows logically from other principles.
- deleted 10y ago
  [deleted]
- plesner 10y ago
  If what you're saying is true then it's easy to provide evidence: just find a case where a company has been successfully sued for not minimizing their taxes sufficiently. I've never heard of such a case and I can't imagine how it could exist and not be mentioned every time a company receives criticism for evading taxes.
  - Spivak 10y ago
    What you're saying is ridiculous. No company would be sued for overpaying their taxes but their accountants would certainly be fired. Assuming you're from the US, every year you have the choice to take the standard deduction or itemize. Do you ever feel guilty for choosing the option that lessens your tax burden? Why would you hold a company to a higher standard? If you think that companies should pay more taxes, then push your government to close the loopholes they're using and/or raise taxes. If you're counting on people to 'do the right thing' when they're directly incentivized not to you're going get nothing but disappointment.
    - plesner 10y ago
      The original comment said it was their fiduciary duty to minimize taxes. It's not - exploiting loopholes is a choice, not a legal obligation. You're talking about incentives which is a different discussion. There are incentives that go the other way too: evading taxes looks bad, it's bad for business if society crumbles for lack of revenue, morally it's wrong to benefit from infrastructure, education, etc and not contribute back. But that's not the point I was addressing.
  - JumpCrisscross 10y ago
    > just find a case where a company has been successfully sued for not minimizing their taxes sufficiently If I owned a company overpaying taxes I'd seek to have them acquired (priced using a tax-efficient income assumption) or management replaced. Suing would be unlikely. That said, I agree with your general point that no fiduciary obligation is likely violated. It's just bad business.
seanmcdirmid 10y ago
If you believe in natural selection, then those companies that do better at minimizing taxes are more likely to survive than those that don't, meaning the tax minimizing companies we see now are simply the result of a natural progression.
- escape_goat 10y ago
  I know that you are saying something that sounds true to you, so I am going to walk through the logic so that you can re-evaluate how much attention you are paying to critical thinking on these matters. What you're proposing is referred to as 'Social Darwinism'. In this application it is used in a pseudo-logical fashion to beg the question entirely and falsely imply the justification of a lemma. Your argument is as follows. "If you believe in (1) [natural selection applied to companies], then (2) [causal hypothesis: '1' leads to 'type'], meaning that (3) the [companies of type] we see now are the result of [natural selection applied to companies]." I hope it is apparent when you look carefully that the 'companies of type' we are seeing now would be simply the result of natural selection in any case, that there is no support for the causal hypothesis presented, and that the causal hypothesis is not in fact a logically necessary implication of the original lemma. The reason that this might feel meaningful, rather than be at first glance a tangle of errors, is that it involves the juncture between a hypothesis for which you feel you have evidence (and do!) with a core belief. Your hypothesis: "companies that do better at minimizing taxes are more likely to survive than those that don't." Your belief: "markets are efficient and the best economy arises when companies are allowed to compete without interference." The difficulty here is in the confusion of the two intellectual contexts. Natural selection is a descriptive theory about how what is came to be. Market libertarianism is a prescriptive theory about how what should be can come to be. They are not interrelated. Under condition of Soviet Market, natural selection will still exist. Even if regulatory capture helps a company survive instead of perish, libertarian theory still advocates against it. If you believe in natural selection applied to companies, then what we have here is the natural and almost predictable extinction event of those companies that over-optimized on minimizing taxes. However, the belief in "natural selection applied to companies" is essentially meaningless once you decouple it from action or advocacy; coupled to advocacy, it is incoherent. It inherits absolutely no scientific justification or intellectual rigour from biology.