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It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden. As the oft-quoted US judge Learned Hand said: >

• i_am_proteus 7y ago
  Learned Hand never sat on the Supreme Court; he was a district and appellate judge for the Second Circuit.
  • FDSGSG 7y ago
    Thank you so much, I can't believe I got that wrong. I've been mistaken on this for far too long.
• devwastaken 7y ago
  Legal /=/ moral
  • throwaway07Ju19 7y ago
    But making them equal is the goal. When they are unequal we create moral hazards. Moral hazard like this has to be least appealing part of having shareholders.
    • kup0 7y ago
      Do you mean in all areas of life or specifically companies / shareholders? A person cheating on their spouse would pretty commonly be considered to be doing something "immoral" Yet it would be ridiculous to make something like that illegal I think the attempt to make moral and legal always align creates plenty of hazards itself Especially if the moral code the law is based on something external and nowhere near universal (like religious sources, which disagree with each other, etc)
  • FDSGSG 7y ago
    One could argue that they have a moral obligation to their shareholders to minimize their tax burden. I can't even imagine a moral obligation to pay excess taxes, that's simply not how taxes work.
    • bredren 7y ago
      That would be a business or contractual obligation. There is nothing personal about that relationship.
      • FDSGSG 7y ago
        There's nothing personal about my relationship with the tax authorities.
    • jayd16 7y ago
      By phrasing it as excess taxes you've already begged the question. You could also phrase it as paying your share or pulling your weight.
      • FDSGSG 7y ago
        Excess taxes, i.e. taxes not required by the law.
        • jayd16 7y ago
          You've already linked the concept of excess to legality, definitionally. This is why you lack the ability to understand what a moral amount could be.
          • FDSGSG 7y ago
            That's fair. Do you know what a moral amount would be? I don't know, but I also doubt that anyone else really knows.
            • 7y ago
  • rolltiide 7y ago
    which applies whether the stated tax rate is 1% or 75%, so a practically useless response unless the idea is that any written tax rate is moral if it comes from the government, which also means any legal means to mitigate the tax rate is also moral because it comes from the government
    • jayd16 7y ago
      Morality exists outside of what the law states. You're suggesting that because you can imagine both a too strict and too lenient law, morality is an impossible concept?
      • pixl97 7y ago
        I believe everyone having the same morality is an impossible concept.
        • jayd16 7y ago
          I'm not sure that's relevant to whether you personally find it moral. This conversation could exist from a personal perspective of what you find moral. That said, even if we all have different morals it seems they're mostly compatible.
      • rolltiide 7y ago
        > You're suggesting that because you can imagine both a too strict and too lenient law, morality is an impossible concept? no, not enough information has been provided to make that decision and that grandparent-OP should elaborate on their stance
  • thekyle 7y ago
    There is nothing immoral about legally minimizing your tax liability. This is like saying that it's immoral for me to contribute to my Roth IRA.
    • devwastaken 7y ago
      Blizzard takes significant advantage of the product of taxes massively disproportionate to any individual. They have an obligation to pay into it how they use it, and they have the money but purposefully are going around it. There is a lot immoral about it.
    • throwaway07Ju19 7y ago
      The tax law is written to incentivize desired behavior. We all benefit when you save for retirement so that you aren't a burden to society later. But loopholes are different. If you discovered a loophole that made it so your landlord can not enforce rent collection, would you stop paying rent ? That's basically what these companies are doing.
      • jnwatson 7y ago
        One's person loophole is another person's well-lobbied IRS rule. Many, many people would believe it is just fine if they found a loophole that set their personal taxes to 0%. Even more would be fine with a loophole that reduced their taxes by 50%. Nearly everyone would be fine with loophole that reduced it by 5%. There's only one way to handle this large moral gray area: pass laws and IRS rules to close the loopholes that experts deem excessive.
      • matz1 7y ago
        > If you discovered a loophole that made it so your landlord can not enforce rent collection, would you stop paying rent I certainly would. Thats why you have to be clear with the law and enforcement.
    • andrewprock 7y ago
      If you do it legally, there is nothing illegal about it. If you do it illegally then it's illegal. If you are doing it in such a way as to violate the social contract, then regardless of legality, I think a case could be made that it is immoral.
  • HNisCurated 7y ago
    Considering blizzard kills less humans than the United States government, legal and moral?
• mattmanser 7y ago
  No it's not. That's how change happens. It's still perfectly legal to destroy the environment in many ways, it doesn't mean we can't complain about it. If we don't talk about it, nothing happens.
  • FDSGSG 7y ago
    The problem isn't with the corporations, the problem (if it exists at all!) may be with the legislation. Complain about the law. E: CogitoCogito is absolutely right, there are companies spending lots of money around the world to push these regulations. I just seriously doubt that Activision Blizzard is one of these.
    • jayd16 7y ago
      It's helpful to have real world examples for context.
      • FDSGSG 7y ago
        Oh, absolutely. But then the headline would be "$country missed out on $amount in taxes because of lacking regulations" or something similar.
    • deogeo 7y ago
      Who do you think lobbies for such laws?
      • lukevdp 7y ago
        Politicians don’t have to listen to lobbyists. The blame lies with politicians.
        • Retric 7y ago
          Everyone talking to a politician about an issue is a lobbyist, that’s what lobbing means. It’s easy to think only those people you disagree with are lobbyists, but even just sending a letter to your congressional representative is lobbying. And there are paid lobbyists on both sides of almost every issue.
• oh_sigh 7y ago
  Did you read the first few sentences of the article? It isn't clear that what they are doing is legal. > The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties. > In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m Also, there is nothing wrong with pointing out what they are doing, even if it is by the books legal. You can still push for change in the system to make their gaming of it less possible, which requires people to be informed about what is happening first.
  • FDSGSG 7y ago
    I did, and until there's significant evidence to the contrary I will assume that what they're doing is legal. I've been audited too, and not because I did anything wrong. > Also, there is nothing wrong with pointing out what they are doing Of course not, but the real problem exists outside of Activision Blizzard. Pointing fingers at specific companies simply detracts from the real problem.
    • pdpi 7y ago
      That $345M settlement isn't definitive, watertight proof, but I sure hope it counts as "significant evidence"!
      • FDSGSG 7y ago
        Not really. We're discussing extremely complicated multi-jurisdiction legislation here. A criminal conviction for tax fraud could in fact be "significant evidence", a mere disagreement by itself is not.
    • ravitation 7y ago
      Providing evidence of a problem doesn't detract from the problem.
    • oh_sigh 7y ago
      Did you pay $345M to make the auditors go away? And I never said what they were doing was illegal. I said it isn't clear that it is legal. Hence the investigations.
• DanBC 7y ago
  Often with complex tax schemes we don't know if they're legal or not because they haven't been tested in courts. Some governments focus on low-hanging fruit or on flagrant tax evasion. They don't want a long running court case costing millions with an uncertain outcome. So we never get to find out whether this scheme is legal avoidance or illegal evasion. But, even if it's legal avoidance: I pay my tax. Why shouldn't this huge company who seeks to benefit from tax-payer funded institutions also pay their tax?
  • 0xcde4c3db 7y ago
    Such schemes are sometimes described with the tongue-in-cheek term "tax avoision".
  • ryanlol 7y ago
    So, what exactly stops the politicians from writing simple and clear tax laws? It wouldn’t be hard for the lawmakers to eliminate this uncertainty, they just want to remain competitive.
    • 9HZZRfNlpR 7y ago
      I've always wondered what about the spirit of the law/contract in these cases?
    • ArnoVW 7y ago
      Don't know the particular tax law in question, but perhaps it would help you if you thought you of lawmaking as making software (in fact in French the word for law is 'code') Everything you code has to be coherent, requirements change, and when they do it is hard to get everyone to agree on the details. You have 200 years of legacy code, have to be compatible with other states and countries, have to support all possible edge cases, and your code is interpreted not by a computer but by a human. Are there broken laws? Sure. Is it easy to make good ones? Not so sure.
• Scoundreller 7y ago
  > The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties. > In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m. Maybe not so legal?
  • FDSGSG 7y ago
    Hard to say before the courts decide. I've personally been through such disputes with tax authorities and prevailed.
    • Scoundreller 7y ago
      Doesn't sound "perfectly legal" when tax authorities are running after you.
      • FDSGSG 7y ago
        Dunno, in my case the court agreed that my actions were "perfectly legal".
        • Scoundreller 7y ago
          Care to share the details?
          • FDSGSG 7y ago
            Nothing exciting, the government felt that imaginary internet money should not be treated like other similar assets. Luckily the courts disagreed in the end. With tax laws being so complicated these disputes are everyday stuff for anyone engaged in any "unusual" activities.
            • Scoundreller 7y ago
• ravitation 7y ago
  EDIT - For HN Guidelines: Any obligation (other than legal) that Activision Blizzard has to paying taxes is not the point of the article. The point the article makes is... > The case of Activision Blizzard is just another example demonstrating the need for governments to introduce more effective measures to deal with royalty-based tax avoidance schemes. In the UK this means changing legislation to make sure that royalty payments made to companies in jurisdictions where the UK has a tax treaty are included in the charge to income tax. Also, it's clear in the header that it's not all "perfectly legal".
  • grzm 7y ago
    > "Did you read the article? The point the article makes is..." You're likely getting downvoted because you're explicitly violating the guidelines. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html > Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."
• blub 7y ago
  This business-friendly, or rather business-subservient attitude is puzzling to me. You do know that we have the right to complain about whatever we want in democracies, and this can be one of the paths that change is enacted through, I assume. So why exactly are you trying to censor those that complain, because it makes you feel uncomfortable? We will criticize tax evasion and even lawful-evil tax avoidance. You will have to live with it. If free speech becomes unbearable, I'm afraid the only solution right now is moving to North Korea, China or any of those countries where it's not tolerated.
  • jnwatson 7y ago
    Disagreement and censorship are two different things. The argument is "don't hate the player, hate the game". Complaining about the companies is wrongheaded is likely not going to get anywhere. Targeting the tax system that got here, however, has at least a remote chance of affecting change.
    • blub 7y ago
      Except the parent post was not "disagreeing", they were basically shaming those that criticize Activision by calling them ridiculous. Your and their argument is also incorrect. It's perfectly fine to dislike the player, because the player will be motivated to be less of a player and more of a good corporate citizen if they see that everyone dislikes them for their action. The tax system is immensely complex, laws are slow to pass and change. It is faced with smart adversaries which try to use the tiniest loopholes to get an advantage, while regular Joe has to pay their taxes and they're condemned immediately when they try anything funny with their taxes (which they can't anyway, because they can't afford it). This argument that the players are innocent and should not be criticized is either naive or malicious.
  • FDSGSG 7y ago
    I operate a small business with 3 employees, I'm certainly incentivised to fend for us. jnwatson worded my actual arguments better than I would.
    • 7y ago
• ALittleLight 7y ago
  I don't agree. People with enough money and expertise follow complicated routines to minimize taxes. People without the money or expertise don't have the same advantage. I don't think arranging tax payments in such a way as to require accountants and lawyers to get the most efficient tax burden is a good system. I'm not saying Blizzard employees or owners should be jailed for doing this. I'm saying we should realize this is a problem we should consider solving
  • FDSGSG 7y ago
    Could you share with us the correct amount of taxes Activision Blizzard should pay? As long as this remains an impossible question to answer then they should probably pay the least amount possible. I'm all for improving current tax regulations, but first we must agree that the problem is with the regulations.
    • stale2002 7y ago
      Yes, the correct amount is definitely at least whatever the settlement that they agreed to, where blizzard has effectively admitted that they were wrong and broke the law. They broke the law. They lost. That's what the courts determined. What, do you not believe in the law or something? Because this is what the courts did. They said that blizzard was guilty, and therefore I judge them as such.
      • FDSGSG 7y ago
        > Because this is what the courts did. They said that blizzard was guilty That is not what the courts said.
        • stale2002 7y ago
          From the article: "In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m" It looks like Blizzard was guilty enough of tax evasion that they had to settle the case for 345m$. If you have to settle a case for 345m$, then you are guilty enough for me to condemn you.
• refurb 7y ago
  In fact, the gov’t often uses tax policy to incentivize certain behavior (lower capital gains tax on long term capital gains). The gov’t is expecting tax players to optimize for the lowest tax rate!
• mntmoss 7y ago
  The players of the video games made by Activision-Blizzard complain every day about trivial and inconsequential aspects of the products and how they play. We don't say about them, "oh, but that is just the way the game is made, you should adapt to it." They are systems of rules akin to law enforced with computer code, designed, among other things, to demonstrate superior player skill, and one of the most common sources of player complaint is that they reward "wrong" skills that are not part of the competitive premise. I say, if players are right to complain about rewarding the wrong skill in the games, the public is right to complain about business being rewarded for their tax evasion skills.
  • deleted 7y ago
    [deleted]
  • ryanlol 7y ago
    People don’t complain about specific twink characters, they complain about the rules that allow that.
• Tsagadai 7y ago
  Consider it from a bureaucratic efficiency perspective instead then, if the rules are too broad and there are too many exemptions then the cost of gathering taxes increases. The government should aim for a simpler system that is more efficient (so that it can pass on the cost saving in having an efficient tax system on as reduced taxation if you are a neoliberal believer). It isn't economically beneficial for people to spend vast sums on creative accountancy in order to minimise their taxation. Tax minimisation encourages investment in areas that do not promote growth or bring new products to market. Yes, there is a personal or individual corporate reward for avoiding tax but there are significant economic downsides too. Tax havens allow corruption, terrorism and organised crime to flourish giving them a way to siphon funds around which is a massive societal detriment.
• anm89 7y ago
  I'm usually pretty libertarian but I disagree here. Yeah don't fault corporations for maximizing profits legally, that's literally their sole purpose. But it is absolutely valid to say that the laws are bad laws and that we should change them. And these laws are bad laws and we should change them.
• Fnoord 7y ago
  > It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden. How ironic that you had to post (as of now) 24 times in this very thread defending this condescending viewpoint. You're not at all addressing what the article mentions. I'll address what the article mentions. The article (quite clearly, in bold) mentions, at the top: > The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties. > In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m It appears these steps may very well be not legal. If you deal with your tax in countries such as: > The multinational company has a complex structure with subsidiaries in a number of tax havens including Malta, the Netherlands, Barbados and Bermuda. (Yes, I'm including my own country here.) Then you're appearing to do something shady with regards to tax. You can expect something shady in return. And of course, since they're also using Delaware, it could very well be that they do pay fair (or "fair") tax over their US part. If so, would you argue Americans have no say in this, given that they're not losing out on tax from Activision-Blizzard? There appears to be a lack of political willpower here in The Netherlands to combat this issue. No surprise, given how far right the current leading party (VVD) is. As a result, The Netherlands wins a little bit, but the EU as a whole loses out. Its stupid egoism like this which makes the EU lose on an international scale, akin to Germany allowing the NSA to tap data as long as it wasn't about Germans.
  • IG_Semmelweiss 7y ago
    I dont think you understand very much TP rules. These rules themselves were created by the very people that now attack them. The logic is that any government doesnt get to tax what is not locally sourced. So ok, a game is not created in the UK, and it does not benefit from the HRMC jurisdiction in terms of labor etx. But it generates oodles of cash in sales in the UK. So now they are coming back and saying that, the cost of generating the sales in the UK is higher, not because of some actual physical activity, but simply because their sales are too high. This ia basically a mafia don saying you are doing too good and therefore we must have a larger piece of the pie. Yet the dons themselves are the one that made the rules and made them necessarily obtuse and subjective in order to charge for things (a) that do not create value and (b) keep them employed
• slaymaker1907 7y ago
  I think this kind of reasoning needs to be questioned since the mechanisms available to large corporations and the wealthy completely outclass those available to less wealthy citizens and small business. Additionally, despite the delusion that some companies and individuals may have, they damn well do have similar and perhaps greater obligation to work towards the betterment of society. For some reason, we seem to think that a group of people somehow have less ethical obligations than individuals.
  • chronic84920 7y ago
    > they damn well do have similar and perhaps greater obligation to work towards the betterment of society. Says who? I don't hold the elevator door if I see someone behind me. I don't tip. I don't recycle. I don't donate blood. I don't vote. I give preferential job treatment to my friends. Is it illegal to be an asshole?
  • TheSpiceIsLife 7y ago
    Don't make the mistake of equating paying more tax with the betterment of society. I think it was PJ O'Rourke who said something like giving money and power to politicians is like giving whiskey and car keys to teenage boys.
    • karlp 7y ago
      Well, I don't know if you have seen the places where politicians have neither money nor power, but it's not pretty.
      • TheSpiceIsLife 7y ago
        Where’s the evidence to suggest repatriating these huge sums of money will be used to improve society? Where’s the evidence to suggest the money would be used to build public transport, improve the education system, reduce poverty, build more public / affordable housing? The preponderance of evidence suggests any and all of these things would be poorly managed, massively over budget, and approximately a decade behind schedule.
• thefounder 7y ago
  Yeah, I think people should complain about the lawmakers not the companies. Maybe that way we will see some changes but I doubt given the current administration stance on the subject(i.e Digital Tax)
• TheSpiceIsLife 7y ago
  Do you mean to say that complaining about laws is ridiculous? That doesn't seem like an argument someone would intentionally make. It should be obvious to anyone that some laws are unjust, insufficient, or overbearing. It's up to us to have these conversations, and push our own, or our collective, agendas.
• CapitalistCartr 7y ago
  "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread." --Anatole France
• jeiri9 7y ago
  Yes but you see if we publish articles discussing changes those laws, they might change. How can we keep from publishing too many of those kinds of things?
• caconym_ 7y ago
  It's downright ridiculous to equate expressions of dissatisfaction with the current state of tax law (allowing wealthy entities to exploit all sorts of loopholes clearly not in the spirit of paying your taxes) with some straw-man "complaining" about such activity despite the fact that these entities are probably behaving mostly within the bounds of the law "just like everybody else". Guess what: laws change, and some people think these laws should be changed so that these entities can no longer dodge the tax burden one might naively expect them to face if no loopholes existed. That's what people are talking about when these topics come up. Reducing that to "complain about [...] perfectly legal" is either disingenuous or ignorant on your part.
  • ChrisLomont 7y ago
    The parent didn’t create a straw man; you did. The article is not criticizing the laws. The article is criticizing Activision for following the law, exactly what the parent stated. Maybe you read a different article focused on the law, not a single actor?
    • caconym_ 7y ago
      I am reading the "Conclusions and recommendations" section and I am not seeing any such criticism of "Activision for following the law". Rather, I am seeing statements like this one: > The case of Activision Blizzard is just another example demonstrating the need for governments to introduce more effective measures to deal with royalty-based tax avoidance schemes. In the UK this means changing legislation to make sure that royalty payments made to companies in jurisdictions where the UK has a tax treaty are included in the charge to income tax. That is not a criticism of Activision Blizzard. It is a straightforward statement of the fact that "more effective measures [are needed] to deal with royalty-based tax avoidance schemes". So, I don't really see what you're talking about. Let's try this: do you agree that they are "using offshore tax havens to reduce their tax burden"? If so, would you further agree that this is a "tax avoidance scheme"? Why or why not?
• woodruffw 7y ago
  The article you're replying to includes claims that amount to tax fraud. In other words, the governments in question are claiming that Activision is not paying what the law demands. But more generally: I don't think anybody seriously believes that you should pay the government more than it's due. What people (myself included) believe is that the government is due more than it currently demands from the wealthy and from large corporations.
• patientplatypus 7y ago
  Umm...you know that all the laws are made by rich people right? We just had the biggest tax write off in history and you're coming in here with this BS? WOOOOWWWW
• coldtea 7y ago
  Just because the law says so doesn't make it right or moral. Just legal.
• phs318u 7y ago
  > Everyone does it, rich and poor alike No they don’t. Even if a “poor person” wanted to, they have nowhere near the scope available to “arrange their affairs” such that they can minimise their taxes at the same percentage (of income) as the rich do. To believe otherwise is naive in the extreme.
  • ghostpepper 7y ago
    I think OP was referring to the act of arranging one's affairs to make their taxes as low as possible, and not the ultimate reduction in tax rate achieved.