4 ms·

1. These journalists don't understand the half of it. All of these structures, mechanics etc serve a purpose, and while most journalists do a decent job of desc

1. These journalists don't understand the half of it. All of these structures, mechanics etc serve a purpose, and while most journalists do a decent job of describing what the rich use (i.e. trusts, companies, foundations, PoA, etc) they don't actually describe why they do it. 2. Avoidance is not evasion. These really shouldn't be lumped all together because there is a massive difference. 3. Even if they get rid of all pure (Cayman Islands style) tax havens tomorrow, the rich won't be paying more in tax. They would then go to more respectable jurisdictions, such as Luxembourg, Switzerland, (for non Americans) the US, Singapore, etc.

mattmanser 9y ago
I think your 3rd point is way off base, this is the whole point about avoidance. The rich are using the disparities between the laws systems to avoid tax and that's what needs fixing. You shouldn't be able to make a billion $$$ in the UK, for example, and then claim you actually earnt it in Luxembourg. If we, the UK tax payers, gave you the eduction, the opportunities, the law systems, the safety provided by our armies, foreign office, judicial systems, social safety nets and care from our health system, as well as all the other tangibles and intangibles that I could probably list for a couple of pages, you should pay back your share into the society. And yes, that's a percentage, not a fixed amount. The social contract of societies is being broken by these avoidance schemes. You luck out in the business lottery, then you pay up to help the rest of us. You'll still be stinking rich. And in the eyes of most people there's not much difference between avoidance and evasion, just the law. I think that's where a lot of the problem stems from, as long as the politicians keep saying "it's ok, but we need to tweak this and that" and giving sweetheart deals out to the rich not available to the rest of us, the public think "this is really not ok, it's totally unacceptable", we're going to keep getting Trumps, Farages, Le Pens and Brexits happening in western democracies. I think the general feeling is that the rich "got away" unpunished with the 2008 crash and now the scale of their tax avoidance is emerging, on top of the income gap widening, it's only going to get worse and politicians seem unwilling to change course and if they don't we'll all be in for some really nasty surprises in the next 10/20 years.
- rayiner 9y ago
  Where do you draw the line between legitimate avoidance and illegitimate avoidance? My wife and I bought a house in order to lower our tax bill. I think it's wrong to have a huge tax deduction primarily benefiting people who already are well off. But is that illegitimate avoidance? What about estate planning, which encourages individuals to divest assets to their kids on a certain schedule so as to maximize how much of their nursing home care is paid for by Medicare/Medicaid instead of their own assets. Is that illegitimate avoidance? How about deferring capital gains tax on the sale of equities by instead taking a loan using the equities as collateral. What differentiates these things?
  - roel_v 9y ago
    Well it's obvious - when it's done by someone in my income class and I expect to do it at some point in the future, it's fine and I'm already paying enough in taxes; but when it's done by someone who has more money than I do, they're thieving capitalists who should be thrown in jail.
    - deleted 9y ago
      [deleted]
  - charlesdm 9y ago
    You can't draw a line, which is part of the problem. In addition, the moral compass of various people can and will be different. What I think is fine, someone else will think is excessive. As long as there are smart people, you will have avoidance. The capital gains deferral is a simple example of something that is hard to fix. And there are a ton of situations like that. If this was an easy problem to solve, it would have been solved. In fact, I'd go as far as saying that it can't actually be solved. You can get rid of tax havens, but tax avoidance has existed for 2000+ years. In fact, in most cases, you don't even need to go "offshore" to secure great tax benefits. There used to be a window tax: https://en.wikipedia.org/wiki/Window_tax https://en.wikipedia.org/wiki/Window_tax. Guess what? People avoided it by bricking up their windows.
ams6110 9y ago
> Avoidance is not evasion. This is an important point. There is nothing wrong with not paying taxes that you are not obligated to pay. Stories like this are just clickbait for "hate the rich" readers.
- charlesdm 9y ago
  > Stories like this are just clickbait for "hate the rich" readers. And it seems there are many. :)
hans_mueller 9y ago
people from country A can only hide money in country B if the number of people from B hiding money in A is not significant to the government or society of B and vice versa. otherwise A and B would sooner or later have an agreement to avoid this because both will make more money then through taxes. that's what happend with Switzerland and the EU.

mattmanser 9y ago

I think your 3rd point is way off base, this is the whole point about avoidance. The rich are using the disparities between the laws systems to avoid tax and that's what needs fixing. You shouldn't be able to make a billion $$$ in the UK, for example, and then claim you actually earnt it in Luxembourg. If we, the UK tax payers, gave you the eduction, the opportunities, the law systems, the safety provided by our armies, foreign office, judicial systems, social safety nets and care from our health system, as well as all the other tangibles and intangibles that I could probably list for a couple of pages, you should pay back your share into the society. And yes, that's a percentage, not a fixed amount. The social contract of societies is being broken by these avoidance schemes. You luck out in the business lottery, then you pay up to help the rest of us. You'll still be stinking rich. And in the eyes of most people there's not much difference between avoidance and evasion, just the law. I think that's where a lot of the problem stems from, as long as the politicians keep saying "it's ok, but we need to tweak this and that" and giving sweetheart deals out to the rich not available to the rest of us, the public think "this is really not ok, it's totally unacceptable", we're going to keep getting Trumps, Farages, Le Pens and Brexits happening in western democracies. I think the general feeling is that the rich "got away" unpunished with the 2008 crash and now the scale of their tax avoidance is emerging, on top of the income gap widening, it's only going to get worse and politicians seem unwilling to change course and if they don't we'll all be in for some really nasty surprises in the next 10/20 years.

rayiner 9y ago
Where do you draw the line between legitimate avoidance and illegitimate avoidance? My wife and I bought a house in order to lower our tax bill. I think it's wrong to have a huge tax deduction primarily benefiting people who already are well off. But is that illegitimate avoidance? What about estate planning, which encourages individuals to divest assets to their kids on a certain schedule so as to maximize how much of their nursing home care is paid for by Medicare/Medicaid instead of their own assets. Is that illegitimate avoidance? How about deferring capital gains tax on the sale of equities by instead taking a loan using the equities as collateral. What differentiates these things?
- roel_v 9y ago
  Well it's obvious - when it's done by someone in my income class and I expect to do it at some point in the future, it's fine and I'm already paying enough in taxes; but when it's done by someone who has more money than I do, they're thieving capitalists who should be thrown in jail.
  - deleted 9y ago
    [deleted]
- charlesdm 9y ago
  You can't draw a line, which is part of the problem. In addition, the moral compass of various people can and will be different. What I think is fine, someone else will think is excessive. As long as there are smart people, you will have avoidance. The capital gains deferral is a simple example of something that is hard to fix. And there are a ton of situations like that. If this was an easy problem to solve, it would have been solved. In fact, I'd go as far as saying that it can't actually be solved. You can get rid of tax havens, but tax avoidance has existed for 2000+ years. In fact, in most cases, you don't even need to go "offshore" to secure great tax benefits. There used to be a window tax: https://en.wikipedia.org/wiki/Window_tax https://en.wikipedia.org/wiki/Window_tax. Guess what? People avoided it by bricking up their windows.

ams6110 9y ago

> Avoidance is not evasion. This is an important point. There is nothing wrong with not paying taxes that you are not obligated to pay. Stories like this are just clickbait for "hate the rich" readers.

charlesdm 9y ago
> Stories like this are just clickbait for "hate the rich" readers. And it seems there are many. :)

hans_mueller 9y ago

people from country A can only hide money in country B if the number of people from B hiding money in A is not significant to the government or society of B and vice versa. otherwise A and B would sooner or later have an agreement to avoid this because both will make more money then through taxes. that's what happend with Switzerland and the EU.