4 ms·

How are exotic tax reduction schemes caused by accountants? That's like saying fires are caused by firefighters. They're a consequence of compulsory taxation.

toss1 8y ago
No, they are not a necessary consequence of compulsory taxation. There is no necessity to create any exotic tax reduction scheme. They are created by over-financialized MBAs trying to evade their company's obligations to society. If you have a real plan for to effectively run a complex society without compulsory taxation to implement necessary collective goods (roads, policing, schools, defense, etc., etc, etc), I'm all ears, and I'm sure so are many others. Until then, your comment is purely specious.
- duncan_bayne 8y ago
  Many people would dispute elements of your "necessary" lists, especially Austrian economist and Objectivists (I'm in the latter camp). Also, many people have proposed alternatives for funding legitimate Government functions without coercion, and relying on charity for the rest (like education) in cases where people can't afford them.
  - toss1 8y ago
    "Many people"... OK. Sure the "Austrian economics" crowd is out there. Yes, they have a point about avoiding hyperinflation, but also often oversimplify. In what country has a modern complex society been actually run without actual coersive tax? In what society have complex and costly ventures like an entire modern education, defense road system been done with it? Any real, hard examples? Abstract ideology is lovely, but is not a practical govt that manages to build the basis for an advanced and advancing society
    - duncan_bayne 8y ago
      Consider where this logic would take you if you applied it to all spheres of life. There would never be experimentation, innovation, or in fact development of any kind. Coming back to the Objectivist angle, there's a great passage from Atlas Shrugged that covers this: ===== "Then what on earth do you know about Rearden Metal?" "That it's the greatest thing ever put on the market." "Why?" "Because it's tougher than steel, cheaper than steel and will outlast any hunk of metal in existence." "But who says so?" "Jim, I studied engineering in college. When I see things, I see them." "What did you see?" "Rearden's formula and the tests he showed me." "Well, if it were any good, somebody would have used it, and nobody has." He saw the flash of anger, and went on nervously: "How can you know it's good? How can you be sure? How can you decide?" "Somebody decides such things, Jim. Who?" "Well, I don't see why we have to be the first ones. I don't see it at all." "Do you want to save the Rio Norte Line or not?" He did not answer, "If the road could afford it, I would scrap every piece of rail over the whole system and replace it with Rearden Metal. All of it needs replacing. None of it will last much longer. But we can't afford it. We have to get out of a bad hole, first. Do you want us to pull through or not?" "We're still the best railroad in the country. The others are doing much worse." ==== In general this feels like a class of logical fallacy, of the form "no-one has attempted to achieve X, so X must be undesirable" but I can't find it in any lists. edit: To make it clearer, take your post, and substitute slavery for coercive taxation. Your argument immediately appears specious, because with the benefit of hindsight we know that large, complex, modern societies did just fine after abandoning slavery. But people argued against emancipation in just that way at the time.
      - perl4ever 8y ago
        People arguing about slavery in the US did have the ability to observe that other societies had abolished it and been successful. And we today have the ability to observe other societies that don't have a stable monopoly of force and taxing power and see them in perpetual chaos, where competing groups with different sources of revenue struggle to become governments. It doesn't make any sense to say nobody has ever tried anarchy, because (a) it's all over the place, and manifestly involves poverty and misery, and (b) it was the original state of humankind, so we know it is possible and that government as we know it develops from it.
- ghein 8y ago
  Simple tax laws are easy to enforce and leave no room for creativity. They also leave no room for "cheap" campaign promises and new initiatives that politicians can announce and display to the media (repeatedly). We'll give a tax credit for low emissions vehicles to save your children's lungs and the planet! An incentive to finance homes for nurses! Tax is just code. Poorly architected code with lots of documentation that obfuscates rather than illuminates. Politicians love to nudge through the tax system as it seems cheap, costs are obscured as, and there's no project to fail like there is if you try to build something. You end up with perpetual scope creep and "minor" additions. Then you get people politicizing the outcomes - "bad people" are taking advantage of a good program, or a "bad company" isn't paying as much as someone thinks they should in an ideal world. If you are going to live in a nation of laws rather than the whim of some functionary you need to let everyone do what is legal, rather than just preferred individuals or classes.
  - toss1 8y ago
    Totally agree that politicians like to over-complicate and obfuscate tax code and other things, and that tax code is an insanely complex mess. Certainly should be fixed. Yet, it does not follow that similarly elaborate non-payment near-scams (& felonious schemes) are a necessary feature. An overly complex tax code is a necessary prerequisite, but not a sufficient condition. for that, you also need scheming MBAs & accountants.
tialaramex 8y ago
No, they're really cooked up by accountants and tax lawyers. In the UK the situation works like this: You, an accountant or tax lawyer or more likely firm employing both, come up with a scheme for avoiding tax that you think might be legal. You can charge people money for teaching them this scheme and helping execute it. Now, you tell the government about the scheme. The tax man can say "Yup, that's legal, all good" (and maybe tell the government the tax laws need changing if it wants to stop this next year) or they can take your clients to court and if a court agrees, require them to pay the extra taxes. You don't care, you got paid either way - the law doesn't chase you so long as you report the clever scheme.
- xioxox 8y ago
  Except the tax man doesn't approve schemes. See https://www.gov.uk/guidance/disclosure-of-tax-avoidance-schemes-overview https://www.gov.uk/guidance/disclosure-of-tax-avoidance-sche.... They may come along later and take you to court if they decide to.
- toss1 8y ago
  Similarly, in the US, there's a structure called a "Private Letter Ruling", where an accountant/attny can request a private ruling about the tax treatment for a transaction/structure/etc.. IIRC it costs about $25K, and if they say it is compliant, you can go with it.

toss1 8y ago

No, they are not a necessary consequence of compulsory taxation. There is no necessity to create any exotic tax reduction scheme. They are created by over-financialized MBAs trying to evade their company's obligations to society. If you have a real plan for to effectively run a complex society without compulsory taxation to implement necessary collective goods (roads, policing, schools, defense, etc., etc, etc), I'm all ears, and I'm sure so are many others. Until then, your comment is purely specious.

duncan_bayne 8y ago
Many people would dispute elements of your "necessary" lists, especially Austrian economist and Objectivists (I'm in the latter camp). Also, many people have proposed alternatives for funding legitimate Government functions without coercion, and relying on charity for the rest (like education) in cases where people can't afford them.
- toss1 8y ago
  "Many people"... OK. Sure the "Austrian economics" crowd is out there. Yes, they have a point about avoiding hyperinflation, but also often oversimplify. In what country has a modern complex society been actually run without actual coersive tax? In what society have complex and costly ventures like an entire modern education, defense road system been done with it? Any real, hard examples? Abstract ideology is lovely, but is not a practical govt that manages to build the basis for an advanced and advancing society
  - duncan_bayne 8y ago
    Consider where this logic would take you if you applied it to all spheres of life. There would never be experimentation, innovation, or in fact development of any kind. Coming back to the Objectivist angle, there's a great passage from Atlas Shrugged that covers this: ===== "Then what on earth do you know about Rearden Metal?" "That it's the greatest thing ever put on the market." "Why?" "Because it's tougher than steel, cheaper than steel and will outlast any hunk of metal in existence." "But who says so?" "Jim, I studied engineering in college. When I see things, I see them." "What did you see?" "Rearden's formula and the tests he showed me." "Well, if it were any good, somebody would have used it, and nobody has." He saw the flash of anger, and went on nervously: "How can you know it's good? How can you be sure? How can you decide?" "Somebody decides such things, Jim. Who?" "Well, I don't see why we have to be the first ones. I don't see it at all." "Do you want to save the Rio Norte Line or not?" He did not answer, "If the road could afford it, I would scrap every piece of rail over the whole system and replace it with Rearden Metal. All of it needs replacing. None of it will last much longer. But we can't afford it. We have to get out of a bad hole, first. Do you want us to pull through or not?" "We're still the best railroad in the country. The others are doing much worse." ==== In general this feels like a class of logical fallacy, of the form "no-one has attempted to achieve X, so X must be undesirable" but I can't find it in any lists. edit: To make it clearer, take your post, and substitute slavery for coercive taxation. Your argument immediately appears specious, because with the benefit of hindsight we know that large, complex, modern societies did just fine after abandoning slavery. But people argued against emancipation in just that way at the time.
    - perl4ever 8y ago
      People arguing about slavery in the US did have the ability to observe that other societies had abolished it and been successful. And we today have the ability to observe other societies that don't have a stable monopoly of force and taxing power and see them in perpetual chaos, where competing groups with different sources of revenue struggle to become governments. It doesn't make any sense to say nobody has ever tried anarchy, because (a) it's all over the place, and manifestly involves poverty and misery, and (b) it was the original state of humankind, so we know it is possible and that government as we know it develops from it.
ghein 8y ago
Simple tax laws are easy to enforce and leave no room for creativity. They also leave no room for "cheap" campaign promises and new initiatives that politicians can announce and display to the media (repeatedly). We'll give a tax credit for low emissions vehicles to save your children's lungs and the planet! An incentive to finance homes for nurses! Tax is just code. Poorly architected code with lots of documentation that obfuscates rather than illuminates. Politicians love to nudge through the tax system as it seems cheap, costs are obscured as, and there's no project to fail like there is if you try to build something. You end up with perpetual scope creep and "minor" additions. Then you get people politicizing the outcomes - "bad people" are taking advantage of a good program, or a "bad company" isn't paying as much as someone thinks they should in an ideal world. If you are going to live in a nation of laws rather than the whim of some functionary you need to let everyone do what is legal, rather than just preferred individuals or classes.
- toss1 8y ago
  Totally agree that politicians like to over-complicate and obfuscate tax code and other things, and that tax code is an insanely complex mess. Certainly should be fixed. Yet, it does not follow that similarly elaborate non-payment near-scams (& felonious schemes) are a necessary feature. An overly complex tax code is a necessary prerequisite, but not a sufficient condition. for that, you also need scheming MBAs & accountants.

tialaramex 8y ago

No, they're really cooked up by accountants and tax lawyers. In the UK the situation works like this: You, an accountant or tax lawyer or more likely firm employing both, come up with a scheme for avoiding tax that you think might be legal. You can charge people money for teaching them this scheme and helping execute it. Now, you tell the government about the scheme. The tax man can say "Yup, that's legal, all good" (and maybe tell the government the tax laws need changing if it wants to stop this next year) or they can take your clients to court and if a court agrees, require them to pay the extra taxes. You don't care, you got paid either way - the law doesn't chase you so long as you report the clever scheme.

xioxox 8y ago
Except the tax man doesn't approve schemes. See https://www.gov.uk/guidance/disclosure-of-tax-avoidance-schemes-overview https://www.gov.uk/guidance/disclosure-of-tax-avoidance-sche.... They may come along later and take you to court if they decide to.
toss1 8y ago
Similarly, in the US, there's a structure called a "Private Letter Ruling", where an accountant/attny can request a private ruling about the tax treatment for a transaction/structure/etc.. IIRC it costs about $25K, and if they say it is compliant, you can go with it.