5 ms·

Tax evasion is, but tax avoidance isn’t.

by mtsr 8y ago

madeofpalk 8y ago
What's 'tax avoidance'? Doesn't everyone avoid tax when they claim expenses and make deductions?
- ui-explorer12 8y ago
  yes - so maximizing your use of any method to reduce your tax burden is (a) the smart thing to do and (b) the (a)moral imperative of a corporation. not a judgement call, just not sure how you frame the raison d'etre for something that oesn't embody life to begin with.
  - cheerlessbog 8y ago
    Why moral imperative? Perhaps you mean ethical or legal, but is not even legally required, so far as I know, that a corporation must maximize return to investors. More broadly, society created the concept of the corporation and imbued it with valuable privileges such as limited liability and a potentially favorable tax regime. Some argue it would be morally reasonable to require it balance the interests of stakeholders.
- mtsr 8y ago
  Exactly, and when companies do the same thing it’s legally considered perfectly fine. Morally can be a different matter, though.
- hackeraccount 8y ago
  Evasion is a bug in the tax code. Avoidance is a feature. Laws are written to create the possibility of avoidance - e.g. we add a 20% tax on cigarettes. We create a 20% tax credit on solar panels. We don't tax interest gains off of savings accounts. For what it's worth it's pointless to complain about tax law complexity. Complexity increases with the amount of money you're trying to drag out of the economy. The more money you want the greater the temptation to create loopholes because they end up being worth more. Imagine a country where the tax rate is 100%. If you pass a law that taxes building cars at 90% you've effectively created an industry. Compare that with how much you'll be loved if the tax rate is 10% and you lower the tax on making cars to 9%. Still good but you'll only garner like not love. Honestly this is why the details of tax law - how fair it is for example - only marginally interest me. The overall rate - and for that you might as well include borrowing, so it's easier to just ask - what percentage of GDP does the government spend are a lot more interesting to me.
whynyc 8y ago
Illegal avoidance is called evasion.

Tax evasion is, but tax avoidance isn’t.

by mtsr 8y ago

Tax evasion is, but tax avoidance isn’t.

madeofpalk 8y ago

What's 'tax avoidance'? Doesn't everyone avoid tax when they claim expenses and make deductions?

ui-explorer12 8y ago
yes - so maximizing your use of any method to reduce your tax burden is (a) the smart thing to do and (b) the (a)moral imperative of a corporation. not a judgement call, just not sure how you frame the raison d'etre for something that oesn't embody life to begin with.
- cheerlessbog 8y ago
  Why moral imperative? Perhaps you mean ethical or legal, but is not even legally required, so far as I know, that a corporation must maximize return to investors. More broadly, society created the concept of the corporation and imbued it with valuable privileges such as limited liability and a potentially favorable tax regime. Some argue it would be morally reasonable to require it balance the interests of stakeholders.
mtsr 8y ago
Exactly, and when companies do the same thing it’s legally considered perfectly fine. Morally can be a different matter, though.
hackeraccount 8y ago
Evasion is a bug in the tax code. Avoidance is a feature. Laws are written to create the possibility of avoidance - e.g. we add a 20% tax on cigarettes. We create a 20% tax credit on solar panels. We don't tax interest gains off of savings accounts. For what it's worth it's pointless to complain about tax law complexity. Complexity increases with the amount of money you're trying to drag out of the economy. The more money you want the greater the temptation to create loopholes because they end up being worth more. Imagine a country where the tax rate is 100%. If you pass a law that taxes building cars at 90% you've effectively created an industry. Compare that with how much you'll be loved if the tax rate is 10% and you lower the tax on making cars to 9%. Still good but you'll only garner like not love. Honestly this is why the details of tax law - how fair it is for example - only marginally interest me. The overall rate - and for that you might as well include borrowing, so it's easier to just ask - what percentage of GDP does the government spend are a lot more interesting to me.

whynyc 8y ago

Illegal avoidance is called evasion.