4 ms·

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 th

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.
  - harryh 9y ago
    Why does the cap gains deferral need to be fixed? The gov't will get its money one day. Who cares if exactly when gets moved around a few years one way or the other?
    - charlesdm 9y ago
      I honestly don't. But then again I don't care about tax avoidance either, and the Panama and Paradise papers weren't exactly ground breaking and shocking to me.
charlesdm 9y ago
> I think the general feeling is that the rich "got away" unpunished with the 2008 crash.. However, the rich did not cause the crash of 2008. The banks did. The rich took a hit in 2008; just like anyone. I know plenty of (previously) rich people who were wiped out because they were overleveraged at the time. Their net worth did come back, because the government essentially gave a ton of free money away via QE, leading to massive asset price increases since 2008.
wav-part 9y ago
If we, the UK tax payers, gave you the eduction, ... WRONG. Will this meme ever die ? Rich have always been paying extreme majority of the tax revenue. For example according to this recently released official report [1] in regards to the tax reform, In 2019 people earning >=$100k will make up 23.4% of number of tax _returns filed_ and contribute to 78.6% of all individual income tax revenue. So if top 23.4% is ok with tax avoidence then the others really dont have much say. If the bottom 76.6% want more whatever they need to figure out a payment plan on their own. [1] https://www.jct.gov/publications.html?func=startdown&id=5036 https://www.jct.gov/publications.html?func=startdown&id=5036
- mattmanser 9y ago
  Meme? Say you're rich today. You had the opportunity when you were 18 and an adult to move country and live somewhere with a regressive tax regime. You didn't, because those countries suck, don't start moaning about it now you're earning good money. Now you're rich and you're cheating the system because you don't like paying your fair share. Your fair share is a percentage. Without the percentage based tax system we can't afford to be a great country for businesses. You want to move to a regressive tax regime because you've got all the benefits already, but can't because the electorate don't agree so you're now "avoiding" tax. Or maybe even Daddy/Mummy made all the money and you want a free ride. That's simply you trying to have your cake and eat it. You've already benefited from a progressive tax regime where the rich pay more because they can afford to. Previous generations paid for your opportunity to make it big. Paid for gangsters not to turn up and take over your business. Paid for no corrupt politician throwing you in jail and stealing your business. Paid for the roads and postal system and educating your employees and giving you the courts to pursue late payers. It paid for the opportunity you or your Daddy/Mummy had. But somehow we should change the rules for you? But, on average, within 2 or 3 generations your family will be middle class again. They won't agree with your temporary stance. Your own descendants will, in all probability, be against your stance. It's not that it's "WRONG", it's that you want the best of both worlds, a fantastic country protecting you and nurturing you to do business in, and paying a small amount of taxes.
  - charlesdm 9y ago

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.
- harryh 9y ago
  Why does the cap gains deferral need to be fixed? The gov't will get its money one day. Who cares if exactly when gets moved around a few years one way or the other?
  - charlesdm 9y ago
    I honestly don't. But then again I don't care about tax avoidance either, and the Panama and Paradise papers weren't exactly ground breaking and shocking to me.

charlesdm 9y ago

> I think the general feeling is that the rich "got away" unpunished with the 2008 crash.. However, the rich did not cause the crash of 2008. The banks did. The rich took a hit in 2008; just like anyone. I know plenty of (previously) rich people who were wiped out because they were overleveraged at the time. Their net worth did come back, because the government essentially gave a ton of free money away via QE, leading to massive asset price increases since 2008.

wav-part 9y ago

If we, the UK tax payers, gave you the eduction, ... WRONG. Will this meme ever die ? Rich have always been paying extreme majority of the tax revenue. For example according to this recently released official report [1] in regards to the tax reform, In 2019 people earning >=$100k will make up 23.4% of number of tax _returns filed_ and contribute to 78.6% of all individual income tax revenue. So if top 23.4% is ok with tax avoidence then the others really dont have much say. If the bottom 76.6% want more whatever they need to figure out a payment plan on their own. [1] https://www.jct.gov/publications.html?func=startdown&id=5036 https://www.jct.gov/publications.html?func=startdown&id=5036

mattmanser 9y ago
Meme? Say you're rich today. You had the opportunity when you were 18 and an adult to move country and live somewhere with a regressive tax regime. You didn't, because those countries suck, don't start moaning about it now you're earning good money. Now you're rich and you're cheating the system because you don't like paying your fair share. Your fair share is a percentage. Without the percentage based tax system we can't afford to be a great country for businesses. You want to move to a regressive tax regime because you've got all the benefits already, but can't because the electorate don't agree so you're now "avoiding" tax. Or maybe even Daddy/Mummy made all the money and you want a free ride. That's simply you trying to have your cake and eat it. You've already benefited from a progressive tax regime where the rich pay more because they can afford to. Previous generations paid for your opportunity to make it big. Paid for gangsters not to turn up and take over your business. Paid for no corrupt politician throwing you in jail and stealing your business. Paid for the roads and postal system and educating your employees and giving you the courts to pursue late payers. It paid for the opportunity you or your Daddy/Mummy had. But somehow we should change the rules for you? But, on average, within 2 or 3 generations your family will be middle class again. They won't agree with your temporary stance. Your own descendants will, in all probability, be against your stance. It's not that it's "WRONG", it's that you want the best of both worlds, a fantastic country protecting you and nurturing you to do business in, and paying a small amount of taxes.
- charlesdm 9y ago