3 ms·

This. I run a small company as well, and taxes are a damn maze. I just checked the tax authorities website in this country, and there are no less than 121 diff

by mstade 9y ago

This. I run a small company as well, and taxes are a damn maze. I just checked the tax authorities website in this country, and there are no less than 121 different tax-exempt health activities – things my company can pay for me, without having to also pay taxes. For most other things, there's sales tax (possibly other kinds of tax too, but let's limit it ourselves for brevity) that comes in at no less than three different levels, depending on what you're paying for. Many things, most things, my company can't legally pay for directly, but must pay me income, which I then pay for, as well as paying the taxes. This probably makes sense, except of course now I'm being taxed twice: once on the income itself, and then again on the expense. Oh unless of course it's a deductible expense, in which case I might be able to deduct it from my year end declaration. Also this depends on what it is I'm paying for, some services are subsidized and the subsidy is applied immediately, so I'm only paying half the taxes – unless I've used up my subsidy limit (which I can't check.) I don't mind paying taxes, I really don't, because I can clearly see what I get for them for the most part. The streets are clean, health care is paid for and mostly seems to work for me, the garbage truck shows up on time, the water flows freely from my taps, and the electric grid never seems to have any issues. My friends with children get to take a lot of time off to care for their kids, and when they are old enough for day care that works too. I had the privilege of attending great public schools, and higher education is paid for. The list goes on. I really don't mind paying a reasonable amount of taxes, and I'm not even that upset about companies and people investing their money wisely. But when there are legal ways of "optimizing" your tax foot print, if you can afford the expertise to do so, it becomes really demoralizing to pay your taxes as asked. Corporations and individuals aren't going to change their ways, so government has to step in and fix these things. It's probably real hard to do, but it needs to be done. Either that or provide tax optimization services for free, so we can all enjoy these same incredibly low tax rates. (At which point tax reform probably has to happen anyway.)

danilocesar 9y ago
Governments have no interest in fixing it. Usually law makers and legislators benefits from those loopholes, directly (with their own money) or indirectly (with campain supporters). Not only in corrupt contries but also in well stablished democracies. Those loopholes are used even by people who claims doing a lot of charity, as Paradise paper is showing. I'm very pessimist about this going away anytime soon.
- mstade 9y ago
  Yes, this is probably the sad truth. You hear officials lament the immoral actions of corporations one day, then sign loopholes designed by BigCo and friends into law the next. Which is exactly why I think the tax office should provide a free service to anyone looking to optimize their tax footprint. If it's legal, why not?
chii 9y ago
an alternative (which i m not sure is better, but...) is to have absolutely zero tax across the board. Then every possible service any entity requires is paid for in a user pays system.
- mstade 9y ago
  I personally don’t believe this works, and that there are plenty of things history can teach us of what can work in a decentralized and presumably privatized sector, and what must remain in a public (albeit not necessarily centralized) sector. I don’t think taxes are inherently bad, but I think there’s something to be said for reducing the distance between paying the money and seeing (even if not necessarily receiving) the benefits of doing so. I think there’s a balance to be had, but I don’t think we get there with the kind of complex tax systems we have in most(?) countries today. I don’t know what such a system would look like. I just know that when Netflix came around and made streaming easier than piracy, for a reasonable amount of money, I jumped on board and never looked back. It’s a flawed analogy I know, but there’s something to be said for just making things dead pan simple and reasonable. There’ll still be people and companies trying their best to avoid taxes, but if we can reduce them juicy margins enough, maybe at some point it just isn’t worth the hassle...

by mstade 9y ago

danilocesar 9y ago

Governments have no interest in fixing it. Usually law makers and legislators benefits from those loopholes, directly (with their own money) or indirectly (with campain supporters). Not only in corrupt contries but also in well stablished democracies. Those loopholes are used even by people who claims doing a lot of charity, as Paradise paper is showing. I'm very pessimist about this going away anytime soon.

mstade 9y ago
Yes, this is probably the sad truth. You hear officials lament the immoral actions of corporations one day, then sign loopholes designed by BigCo and friends into law the next. Which is exactly why I think the tax office should provide a free service to anyone looking to optimize their tax footprint. If it's legal, why not?

chii 9y ago

an alternative (which i m not sure is better, but...) is to have absolutely zero tax across the board. Then every possible service any entity requires is paid for in a user pays system.

mstade 9y ago
I personally don’t believe this works, and that there are plenty of things history can teach us of what can work in a decentralized and presumably privatized sector, and what must remain in a public (albeit not necessarily centralized) sector. I don’t think taxes are inherently bad, but I think there’s something to be said for reducing the distance between paying the money and seeing (even if not necessarily receiving) the benefits of doing so. I think there’s a balance to be had, but I don’t think we get there with the kind of complex tax systems we have in most(?) countries today. I don’t know what such a system would look like. I just know that when Netflix came around and made streaming easier than piracy, for a reasonable amount of money, I jumped on board and never looked back. It’s a flawed analogy I know, but there’s something to be said for just making things dead pan simple and reasonable. There’ll still be people and companies trying their best to avoid taxes, but if we can reduce them juicy margins enough, maybe at some point it just isn’t worth the hassle...