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Can you explain, how does this apply to the article, though? These people structured transactions that violated both the spirit (definitely) and the letter (qui

Can you explain, how does this apply to the article, though? These people structured transactions that violated both the spirit (definitely) and the letter (quite likely), but the complexity of the transactions let them survive challenges by the IRS because the IRS wasn't set up to deal with them. I don't see what "We can't have it both ways" refers to here, among other things you said. I think people do sometimes overstate the amount of legal and ethical complexity in all this.

jdsully 8y ago
Sometimes the spirit of the tax code is to protect a specific entity in a congressman’s state. The tax code has no moral authority as it’s already corrupt. We can’t have it both ways. If loopholes are being intentionally put in we can’t blame people for taking advantage of loopholes. I’d love a fair tax code but until we have one I won’t begrudge anyone for being smart about how they pay.
dalbasal 8y ago
What makes me think it applies is the term "abuse." If it was clearly rulebreaking, they would have called it a "violation," I assume. What I'm arguing is that the rules themselves don't have a spirit. Not all rules, but most tax rulesets. The complexity of transactions is largely a factor because of the complexity of the rules. They're complex because tax rules are constantly being fiddled with to benefit someone, encourage something or shield something. It's the kind of ruleset you end up with specifically because you're not being principled. The spirit of the tax rules that U2 is taking advantage of is exactly the type of whats-good-for-me-is-good-for-me spirit that he was being accused of. If there's a loophole in the rules to protect some industry or district that happened to have been politically important or connected at some point and some other groups manage to take advantage of it... For principled rules (don't rape, murder or steal) it makes sense to appeal to the spirit. It's not necessarily inarguable but it exists. We can debate whether something constitutes theft sensibly, and appeal to the spirit of the rule. But, if there were weird rules specifically defining stealing commercial vehicles "not theft" because in the early 90s some economists theorized this would help balance insurance company finances somehow... the "spirit" of the "no stealing" rule becomes meaningless. All you have at that point is the rules in ink. I'm not even talking about ethical complexity, mostly. This bleeds into empirical reality pretty directly. Where we have complicated and unprincipled tax rules we tend to have complicated and unprincipled avoidance, tax structuring, planning or pick your euphemism.
- conistonwater 8y ago
  > If it was clearly rulebreaking, they would have called it a "violation," I assume. No, they would have called it a violation if it was found to be illegal in court, or in a settlement. Since that didn't happen, it would be wrong to call it a violation (for essentially technical reasons). I think you're at the very least missing that there is a category of things that are "illegal but not prosecutable". I also don't think your U2 example helps, because I still don't see what it has to do with the issue in the article.

jdsully 8y ago

Sometimes the spirit of the tax code is to protect a specific entity in a congressman’s state. The tax code has no moral authority as it’s already corrupt. We can’t have it both ways. If loopholes are being intentionally put in we can’t blame people for taking advantage of loopholes. I’d love a fair tax code but until we have one I won’t begrudge anyone for being smart about how they pay.

dalbasal 8y ago

What makes me think it applies is the term "abuse." If it was clearly rulebreaking, they would have called it a "violation," I assume. What I'm arguing is that the rules themselves don't have a spirit. Not all rules, but most tax rulesets. The complexity of transactions is largely a factor because of the complexity of the rules. They're complex because tax rules are constantly being fiddled with to benefit someone, encourage something or shield something. It's the kind of ruleset you end up with specifically because you're not being principled. The spirit of the tax rules that U2 is taking advantage of is exactly the type of whats-good-for-me-is-good-for-me spirit that he was being accused of. If there's a loophole in the rules to protect some industry or district that happened to have been politically important or connected at some point and some other groups manage to take advantage of it... For principled rules (don't rape, murder or steal) it makes sense to appeal to the spirit. It's not necessarily inarguable but it exists. We can debate whether something constitutes theft sensibly, and appeal to the spirit of the rule. But, if there were weird rules specifically defining stealing commercial vehicles "not theft" because in the early 90s some economists theorized this would help balance insurance company finances somehow... the "spirit" of the "no stealing" rule becomes meaningless. All you have at that point is the rules in ink. I'm not even talking about ethical complexity, mostly. This bleeds into empirical reality pretty directly. Where we have complicated and unprincipled tax rules we tend to have complicated and unprincipled avoidance, tax structuring, planning or pick your euphemism.

conistonwater 8y ago
> If it was clearly rulebreaking, they would have called it a "violation," I assume. No, they would have called it a violation if it was found to be illegal in court, or in a settlement. Since that didn't happen, it would be wrong to call it a violation (for essentially technical reasons). I think you're at the very least missing that there is a category of things that are "illegal but not prosecutable". I also don't think your U2 example helps, because I still don't see what it has to do with the issue in the article.