Just because everyone is doing it doesn't mean it's a sensible idea. It's a huge failure which makes honest ethical people to pay more in a world where everyone

Just because everyone is doing it doesn't mean it's a sensible idea. It's a huge failure which makes honest ethical people to pay more in a world where everyone else "optimizes" to bigger or lesser degree. It's a system where the only question is how much you go into shady area. This is a problem at every scale from micro companies to big corps. >>Like many laws, there are subjective components and that is what precedents and courts are for. But this is not similar to subjective laws where you need to come-up with interpretation for some case. Here you would need to assess "real value" of every transaction out there which is just not possible. >>Tax agencies understand that businesses exist to make a profit and try to come up with systems that are compatible with that. This is not an argument. There exist taxes which are simple in structure and which are not possible to evade without committing forgery. VAT is one such tax, taxing revenue (but not income) is another idea. Income tax isn't like that.