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If I have a way to reduce tax, I'll do so as well. Nobody is against closing the loop hole. We all know what the loop hole is. Politicians should just do it.

If I have a way to reduce tax, I'll do so as well. Nobody is against closing the loop hole. We all know what the loop hole is. Politicians should just do it. Instead, they (Dems mostly) parade around publicly shaming companies who reduces tax in a legal way.

Sebguer 5y ago
Do you believe all ethical behavior should be codified in law, or just taxes?
- the-dude 5y ago
  What is ethical about paying taxes? Genuinely curious.
  - dave5104 5y ago
    Taxes pay for all sorts of things in society. They pay for childhood education, they build roads, they pay for services like fire departments. If you don't pay taxes, then it wouldn't really be fair for you to be sending your kids to public schools, driving on roads to get around, or calling the fire department when your house is burning down, since you haven't contributed anything to their upkeep.
    - imgabe 5y ago
      So the people earning $20k per year who don't pay any taxes shouldn't get to send their kids to public schools?
      - nate_meurer 5y ago
        That is pretty obviously not what the parent is talking about. The context here is tax avoidance, i.e., avoidance by those financially able to pay. This has nothing to do with those whom the government has exempted due to limited financial means. Policy debates aside, I don't think many people will seriously argue such people have an individual ethical responsibility to pay taxes.
        imgabe 5y ago
        If the government exempts you from paying taxes for low income that’s ok, but if the government exempts you from taxes for performing some kind of behavior they want to incentivize (like reinvesting company profits instead of paying them to shareholders) or structuring your company in a certain way, then you’re supposed to ignore that exemption and pay taxes anyway?
        nate_meurer 5y ago
        You're leaving out the part where corporations lobby relentlessly and effectively for the tax loopholes that best suit them. The structure and implementation of corporate taxes in the USA strikes me as needlessly complicated and corrupt, and I think corporate influence over the tax code is deeply unethical in many ways. At the same time, I wouldn't tell any individual or company that they're ethically obligated to forgo tax relief that's legally available to them. These two things are not in contradiction.
        imgabe 5y ago
        > corporate influence over the tax code is deeply unethical in many ways. It is problematic in that corporations have a lot more resources to bring to bear than the average person does. I don't find it unethical though. People have a right to express their concerns to the government and advocate for their interests, even if those people group themselves together into a legal entity such as a corporation. It would be more unethical to single out certain groups of people and say "everyone else is allowed to talk to the government and advocate for their interests, but you are not". Edit to add: It's the government's job to listen to everybody's concerns and balance the interests of different groups against each other. If we're unhappy with the job they're doing, we should elect a different government that will do a better job, not just silence groups we don't like. They are not passive elements in this who are just helplessly acted on by outside forces.
        nate_meurer 5y ago
        > everyone else is allowed to talk to the government and advocate for their interests, but you are not In practice, this is exactly the problem with revolving-door politics and regulatory capture. > we should elect a different government that will do a better job Agreed, and I would add that one of the most important functions of journalism like the OP is to inform the voters about these situations.
    - alfl 5y ago
      For example, given that Google successfully litigated the Oracle Java API copyright case in the public court system, it seems that it gains advantages from public institutions. Simple reciprocity indicates that they should support institutions from which they benefit. Mutatis mutandis for, eg, roads so that employees can get to work, etc.
      - leephillips 5y ago
        But the employees pay taxes on their salaries. And Google’s corporate profit is taxed through taxes on dividends imposed on shareholders. The only tax that Google can evade is the double taxation on profits that will be taxed again when distributed. Although it is true that this tax rate is lower than income tax.
        andromeduck 5y ago
        Just like with income taxes - it doesn't change the tax wedge at equalibrium but it feels better and that's what's important. It's like going to a store where everything is eternally 40% off.
        alfl 5y ago
        Google has never paid a dividend. “Double taxation” refers to taxation post distribution not prior (source: I was a corporate tax accountant). Finally, “evasion” is illegal. “Avoidance” is a legal tax strategy.
    - mindvirus 5y ago
      Those taxes also pay for guns and missiles and much worse stuff. Is it ethical to pay for these things? The point that the parent is making is that there's a legal obligation to pay taxes, but it's not an ethical one - the government says what you owe, and you pay that. It's muddied by companies lobbying to set the laws, but I would have to agree paying taxes the laws say you owe is not an ethical question.
    - gher-shyu3i 5y ago
      > Taxes pay for all sorts of things in society. They pay for childhood education, they build roads, they pay for services like fire departments. What's the government doing by just collecting its citizens hard earned money? It should also invest in companies and other ventures and make its own money. It also has natural resources (oil, natural gas, etc.) at its disposal. Only if those are not enough can it ask its citizens to pitch in.
  - megablast 5y ago
    You are paying for what you use. You think it’s ethical to use something and someone else should pay for it?? Or don’t you use roads, police, education, services, etc..,
    - smabie 5y ago
      I mean, not everyone uses the same things at the same amount.
    - abeppu 5y ago
      Let's also bear in mind that you can benefit from something without "using" it. I once talked to a guy who was furious that his property taxes funded public schools b/c he didn't have kids. But ... I think we'd all be worse off if there were no public schools and there was an illiterate underclass. I don't have a car and rarely drive on highways, but I have no idea where my groceries would come from if public roads were not present. I don't expect to collect social security, but I pay into it with the knowledge that all my elderly family members collect it. On the other hand, by paying our taxes, we Americans maintain thousands of nuclear weapons, and the largest and most elaborate military on the planet. So ... not all of what we pay for is "good".
  - romwell 5y ago
    > What is ethical about paying taxes? Genuinely curious. What's ethical about playing in a poker tournament and paying the entry fee? Just curious. If you are getting rich in this country, taxes are paying for what enabled you to get rich in the first place: the human capital.
  - abeppu 5y ago
    One quite popular and compelling family of ethical theories is utilitarianism, wherein "ethical" roughly means "resulting in the greatest happiness and well-being for all". Taxes and the public infrastructure and spending they support are clearly tied up in the well-being of most if not all in society. Taxes paid or not paid by corporations presumably impacts prices to customers, returns to investors, the success, failure or extent of public programs, and future decisions of taxes levied against individuals. How are taxes _not_ a thicket of ethical issues? However, I think a really ambiguous question is whether we should actually care about _corporate_ taxes over questions like treating capital gains income on the same footing as wage income. One expects that when corporations don't pay taxes, their shareholders eventually reap those savings as capital gains income ... so isn't it eventually taxed? I'm assuming here that only large multinationals engage in this sort of scheme; if there were a whole economy among rich individuals who always push their transactions through Bermudan-Irish shell companies, then perhaps it might never get taxed at any rate?
- ergocoder 5y ago
  No. However, paying tax is hardly an ethical matter. Am I unethical to choose standard deduction because it reduces my tax more than choosing itemized deduction? No? Yes? Maybe?
  - nwienert 5y ago
    Do you think media / social media shaming companies for performing elaborate tax dodges helps or hurts put pressure for political action?
    - ergocoder 5y ago
      No idea. But it doesn't seem to help much. For example, many Dems shout "tax billionaires" for years. This rallies a lot of people. "Yeah!!! Let's tax them more" we all chant. Then, when Dems is elected, they are raising tax on salaried employees who earn more than 400k a year. (Not sure if they has gone through with it yet) I didn't know I was categorised as a billionnaire.
      - roenxi 5y ago
        I suspect people think about wealth on a log scale - in my mind $90 billion and $100 billion are basically the same number despite being rather different. Thinking in terms of orders of magnitude - $400k is a lot closer to $1,000k than the US median income of around 40k. Politics isn't about precise language. They just mean wealthy people. I thought they were pretty up-front about that.
        jokethrowaway 5y ago
        That's quite ingenuous. It's of course easier to charge more taxes for moderately wealthy employees who don't have a clever tax setup and may need to. Really rich people with clever tax setups will just move out and you'll get no more revenue.
      - mLuby 5y ago
        One of only two Independent senators in Congress shouted "tax billionaires" for years, then when he didn't win the presidency, the billionaires just carried on unmolested.
- fny 5y ago
  Taxes area already codified in law, so it makes sense for the targeted behaviors to also be codified.
- voidfunc 5y ago
  One view is that the only ethics that really matters is what the law says is legal. Laws are derived by the people and encode their ethical permissibility within them.
  - whimsicalism 5y ago
    Is that your view? Is it a particularly common view? Otherwise, why is it worth discussing?
- whatgoodisaroad 5y ago
  Paying a fair amount of taxes definitely has a big ethical component to it, AND the laws around it probably ought to be changed, but that doesn't imply that they should be changed strictly because of the ethical reasons. Specifically, collecting a reasonable amount of taxes is key to the function of governments as they're set up. It would be unethical to sell somebody a car that secretly has no motor, but ethics isn't the only reason cars need motors.
  - shadowgovt 5y ago
    It is worth noting that what is "reasonable" and who owes it is one of the largest pieces of the work of a government.
  - deleted 5y ago
    [deleted]
  - gher-shyu3i 5y ago
    What's "fair share"? This keep getting repeated without any quantification.
    - nraynaud 5y ago
      In France it’s codified at the constitutional level, it’s a varying tax rate (ie marginal tax rate with slices)
  - insert_coin 5y ago
    Taxes long ago stopped being the main way governments fund themselves. If taxes were about financing the government there would just be one tax called the-cost-of-government-tax and that's it. There would be no need to tax everything you do, and at different rates and on some days but not others, but when the moon is full on tuesday you pay double except if you lived on 72nd street during 2008... Taxes are about control, about influence, and about corruption. The loopholes are there becasue someone put them there, they are not hidden. The tax-code is so complex because someone made it that complex, someone doesn't want it to be easy.
- imgabe 5y ago
  Paying taxes has nothing to do with ethics. It is the government's job to set the tax rate and tell you how much you owe. It's not like "you are legally obligated to pay this much, but there is an ethical obligation to add another X% as well"
- jokethrowaway 5y ago
  Charging taxes is unethical and a violation of the non aggression principle. I pay taxes because the alternative is fines and eventually jail. That's theft, that's coercion. The less taxes you pay the more power to you - and I'd appreciate if you shared how.
  - Sebguer 5y ago
    Living up to your account name with this hilarious response!
    - dang 5y ago
      Comments like this will get you banned here, regardless of how wrong someone else is or you feel they are. Please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules.
  - dang 5y ago
    Please don't take HN threads further into ideological flamewar. You've done it more than once recently, and we want the opposite here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- dang 5y ago
  Please don't take HN threads further into flamewar. It makes discussion noticeably crappier. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
brundolf 5y ago
These laws are enormously complex and there will always be loopholes. You can prosecute someone for maliciously exploiting your computing system, even though technically "they're just using the rules you wrote", because there will never not be such rules that allow for exploitation.
- ergocoder 5y ago
  Then, close the obvious one first. This double Dutch Irish thing. It's so obvious that we even have a nick name for it. The law is hardly perfect as it is. Will never be. Just because there are more holes. It's not the reason to not close the most obvious/impactful one.
  - Jon_Lowtek 5y ago
    The double irish was closed on January 1st 2020, after a five year grace period for the multinationals to restructure.
- tialaramex 5y ago
  This is why the UK ended up with a General Anti-Avoidance Rule (in the UK this rule is named the "Anti-Abuse Rule" but it's a General Anti-Avoidance Rule just with a different name) The way a general anti-avoidance rule works is it says you can't do things that are just to avoid paying tax. The tricky part, obviously, is figuring out how a jury can decide if it was really just to avoid paying tax. The UK's approach is a Double Reasonableness test. The jurors are asked to consider not merely what they, personally might think would be reasonable, but anything any conceivable reasonable person might think is reasonable. So maybe you can't personally imagine why anybody would want multiple sports cars, but you can imagine somebody else who might think it's reasonable to buy them, so the person who avoided tax by purchasing sixty sports cars passes the Double Reasonableness test. On the other hand, you may be unable to conceive of any person who could think that it was reasonable to open over 4000 bank accounts and then deposit £99999 into each account, if not for the fact that it avoided a tax on larger deposits and so that fails the Double Reasonableness test. [These examples are hypotheticals, feel free to go dig up actual schemes which have passed or failed the test] This provides appropriate latitude. And even if your strategy fails the Double Reasonableness test, you don't go to jail or anything, you just don't avoid taxes, you owe taxes exactly as if your behaviour didn't result in a favourable tax outcome. Which, if you really didn't do it just to avoid taxes as you've claimed, should surely be fine... The other trick which was introduced at the same time imposes a duty on tax avoidance lawyers. If you help people plan to avoid taxes, that's cool but you have to explain how your scheme works to the taxman. You likely charge for your help, that's legal, and you keep that money even if the scheme doesn't actually work (that's legal and it's just smart business) but your duty ensures that the taxman already knows about the scheme before it's used, and can decide if they want government to legislate to close it next year, if they want to go to court to claim it doesn't work (because of GAAR), or if they just let it carry on.
the_optimist 5y ago
There’s an additional level on top of this: those same politicians often actually participate in the design of tax structures that enable the same companies to be chastised for utilizing those structures and “not paying their fair share.”
- hirsin 5y ago
  Surely you don't accuse developers of being in cahoots with the attackers that use their bugs? Now, we fix our bugs, so there's a difference...
  - yunohn 5y ago
    The politicians are provably benefitting from the loopholes they help legislate. Individuals working at companies are very rarely (or never) benefitting from malicious actors attacking their company.
sarakayakomzin 5y ago
Bigly smart take. When I travel in states without left lane enforcement, I make sure to stay in the left lane going the bare minimum of the speed limit and shout to all the (Dems mostly) who want to don't want to pass on the right. it's not illegal!
cmeacham98 5y ago
> Politicians should just do it. Read the whole article, they did. > Instead, they (Dems mostly) parade around publicly shaming companies who reduces tax in a legal way. I'm not aware if google specifically has done this, but the associated problem here is that typically massive companies pay lobbyists to get the government to create (and keep) these loopholes.
- he_is_legend 5y ago
  Can someone explain to me why lobbyists are permitted? Surely politicians should be representing the needs of people who voted for them. Lobbyists appear to enable exactly the opposite behaviour.
  - candiodari 5y ago
    Because generally you want lobbyists. You can say many things about politicians, but they don't know anything about how most of the economy and country works, just like you and me don't. They don't understand either inner cities or the countryside, they don't understand how mining works, they don't understand ad auctions, ... (occasionally you'll have one politician who understands one/a few of these, I get it, but ...) So what happens once elected is essentially that interest groups (ideally multiple), amongst other companies, industry associations, unions, pension funds, government representatives, ... see the elected representatives, quite literally teach them, in a biased way, even write legislation for them (this means hiring a team of sometimes hundreds of lawyers and putting them at their disposal), and the general idea is because multiple interest groups participate you get a somewhat reasonable negotiated outcome. You don't want oil industry legislation to be written by Greenpeace. You also don't want it written by ExxonMobil. So what to do? Lock whoever they send to represent them in a room, have someone to check for guns at the door, and have them fight it out. Of course, none of these interest groups are playing fair. That can (and generally does) lead to very biased laws. However, when it comes to contentious issues, the interest groups that win are actually popular citizen-based interest groups (e.g. in climate change legislation it's clearly not one-sided, at least attempting a compromise between multiple parties, when it comes to police power, clearly someone's providing counterweights to police requests, and so on) So the general idea of democracy is: we have many idiots, not just one, to hopefully get at least "average" intelligence and decision making, then we have them listen to anybody who wants attention and then collectively take a decision. They make too many mistakes or stop listening? We replace them. Does it give ideal outcomes? No. Is it a million times better than forcing one interest group's opinion 100%? Yes. Does a mountain of money really help in making yourself heard better? Yes. It's better than an idiot who knows nothing about anything taking control of everything, which is what most alternative systems boil down to.
o_p 5y ago
Companies should contribute to society, they benefit off the public and legal infrastructure.
- kylecazar 5y ago
  I think that's why parent advocated for closing the loopholes. And I tend to agree. Would be great if we could just rely on companies to pay as much tax as they can to 'contribute', but why leave it to the honor system? Close the loopholes and codify it. It's the only sustainable, efficient way.
  - ergocoder 5y ago
    I cannot even rely on myself paying more tax than I'm legally required to. I'm sure you don't intentionally over pay your tax either. If you want more tax, just codify it.
- goldenchrome 5y ago
  They should, but companies tend towards amorality the larger they become. I think you're right to care about the issue, but we should forget about using shame as a tactic. We think of companies as institutions comprised of people who can be reasoned with, but it's more effective to think of companies as a bacterial growth on a petri dish named Earth. If you want a large company to pay taxes you have to make well-defined laws and enforce them.
  - o_p 5y ago
    Intent is a part of the law, not only actions. If you use an exploit in computer systems to get unauthorized access you cant just say "well, thats how its designed, write better programs next time". Retroactive taxes should apply here, what was written in the law was wrong with the actual intent of the lawmaker, we shouldnt encourage this stupid cat and mouse games, just pay your taxes.
    - goldenchrome 5y ago
milofeynman 5y ago
I'm sorry but you're a bit wrong. Give this propublica series a read. https://www.propublica.org/series/gutting-the-irs https://www.propublica.org/series/gutting-the-irs
dillondoyle 5y ago
Dems are also the only ones at least proposing & trying to pass changes - even if not enough. Infra bill would be paid for by restoring higher corporate tax rate and a few law changes on foreign tax. To me it's not all bluster. But I agree here in the loopholes are hard to close with entrenchment. The paid for definitely rests on way more sound math than republican 'job growth -> gdp' magic. There is quite a lot but just a few things I quickly googled: - calculate 21% tax on country-by-country basis, eliminate tax-free 10% foreign point of return - make it harder to invert by acquiring/merging foreign companies to offshore profit - eliminate tax benefits for “Foreign Derived Intangible Income” (e.g. shift IP abroad i think apple does this?). I think this one also moves those incentives stateside which would be good https://www.cnbc.com/2021/03/31/biden-infrastructure-plan-to-raise-taxes-on-global-corporations.html https://www.cnbc.com/2021/03/31/biden-infrastructure-plan-to... https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/ https://www.whitehouse.gov/briefing-room/statements-releases...
- gher-shyu3i 5y ago
  They had their chance when the corporate tax rates were 35% or higher. We know the game, nothing is going to change with higher tax rates, except more money being wasted.
  - throwaway189262 5y ago
    Actually, they didn't. Democrats have only had majority control of congress and the presidency for 5 of the last 40 years. The rest of the time, Republicans can block any bills they don't like. And they really don't like huge corporations paying taxes.
    - 0xy 5y ago
      Obama had a supermajority and didn't do anything (except the lobbyist hellscape that is the current US healthcare system). He could've passed tax reform.
      - 5y ago
ourmandave 5y ago
Instead, they (Dems mostly) parade around publicly shaming companies who reduces tax in a legal way. Yeah, come on AMERICANS, get off your asses and go vote for Ireland politicians who will close the loop hole in the IRISH tax system. <eye-f*cking-roll>
- dang 5y ago
  Please don't post like this here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
jokethrowaway 5y ago
Because part of those money flow back to the government, while middle class and small business are left paying the bill for the entire of society. That said, I'd rather have the government disappear and be replaced by companies providing insurance, protection and lawmaking - than these companies to start paying taxes.
throwaway189262 5y ago
If Dems had no intention to fix these loopholes why would they waste time making a bunch of hoopla about it? Words imply intent. Would you rather they say nothing and look away, as the Republicans are? Dems are at least doing something besides electing a billionaire who dropped the corporate tax to the lowest it's been since the 1930's.
- ergocoder 5y ago
  Yes, because right now they say one thing but do the other. Would your rather they deceive than saying nothing?
  - throwaway189262 5y ago
    What is the other thing they're doing? Nothing I've seen in their tax bills affects average americans
    - ergocoder 5y ago
      One example is taxing the billionaire. They are telling shouting shaming. Then, Dems will actually tax salaried employees who earn more 400k a year. Now this doesn't impact average American, sure. But they could have been upfront about taxing salaried employees. Another example is exactly this news. They are shaming yelling at the companies for not paying more tax. Yet they don't codify the tax law to get companies to pay more tax. Based on their yelling, they could have just added "no double Irish practice" into the tax law. No? There are many similar laws that handle extreme complex situation like "no money laundering", "no market manipulation". It's not perfect, but we still manage to handle them. At best, Dems are misleading the public. My guess is that they can't close that loophole without negative impact on other areas. But Dems never explain this at all. They try hard to say companies are evil. Yet they are the ones with power who do nothing. This is like you starting a new job, and nobody codifies your responsibility, and you are constantly yelled at for not fulfilling your obligation. Sure, Dems is the lesser of the two evils when comparing to Republicans. But let's not act like they are not deceptive here.
yunohn 5y ago
>> If I have a way to reduce tax, I'll do so as well. Please do enlighten the rest of us here, on how to reduce our taxes down to single-digit percentages, or millions/billions in absolute.
- ergocoder 5y ago
  Yes! I wish I could do double Irish loophole as well, but I can't. Do we want to close the loophole or extend the loophole to everyone? I'm confused now.
  - yunohn 5y ago
    That’s exactly my point, that you can’t do it. Individuals rarely have any avenues to construct such elaborate tax reduction schemes. I think it’s disingenuous to say that it’s similar to how one normally looks for legal tax remedies. Instead, it’s clearly a loophole invented for their own benefit.
    - ergocoder 5y ago
      My main point is that we all know what the loop hole is. We even have a nickname for it. I almost always spend the best of my ability to reduce tax. If this loop hole applied to me, I would have done it as well. Not sure why it is disingenuous. Why can't we either close it or extend it to everybody? Dems led governments for years during Obama's era. What's with the yelling and no action?
thatwasunusual 5y ago
> Nobody is against closing the loop hole. Nobody? Including those who benefit from it, you mean?
- ergocoder 5y ago
  I meant the perceived majority seen by the amount of yelling on twitter Reddit and etc., at least. I haven't seen much of people supporting the "let's not close the loophole" movement. I'm sure my 0.5 year old baby is neither for nor against this loophole. I asked but I didn't get the answer. Come on, man.

Sebguer 5y ago

Do you believe all ethical behavior should be codified in law, or just taxes?

the-dude 5y ago
What is ethical about paying taxes? Genuinely curious.
- dave5104 5y ago
  Taxes pay for all sorts of things in society. They pay for childhood education, they build roads, they pay for services like fire departments. If you don't pay taxes, then it wouldn't really be fair for you to be sending your kids to public schools, driving on roads to get around, or calling the fire department when your house is burning down, since you haven't contributed anything to their upkeep.
  - imgabe 5y ago
    So the people earning $20k per year who don't pay any taxes shouldn't get to send their kids to public schools?
    - nate_meurer 5y ago
      That is pretty obviously not what the parent is talking about. The context here is tax avoidance, i.e., avoidance by those financially able to pay. This has nothing to do with those whom the government has exempted due to limited financial means. Policy debates aside, I don't think many people will seriously argue such people have an individual ethical responsibility to pay taxes.
      - imgabe 5y ago
        If the government exempts you from paying taxes for low income that’s ok, but if the government exempts you from taxes for performing some kind of behavior they want to incentivize (like reinvesting company profits instead of paying them to shareholders) or structuring your company in a certain way, then you’re supposed to ignore that exemption and pay taxes anyway?
        nate_meurer 5y ago
        You're leaving out the part where corporations lobby relentlessly and effectively for the tax loopholes that best suit them. The structure and implementation of corporate taxes in the USA strikes me as needlessly complicated and corrupt, and I think corporate influence over the tax code is deeply unethical in many ways. At the same time, I wouldn't tell any individual or company that they're ethically obligated to forgo tax relief that's legally available to them. These two things are not in contradiction.
        imgabe 5y ago
        > corporate influence over the tax code is deeply unethical in many ways. It is problematic in that corporations have a lot more resources to bring to bear than the average person does. I don't find it unethical though. People have a right to express their concerns to the government and advocate for their interests, even if those people group themselves together into a legal entity such as a corporation. It would be more unethical to single out certain groups of people and say "everyone else is allowed to talk to the government and advocate for their interests, but you are not". Edit to add: It's the government's job to listen to everybody's concerns and balance the interests of different groups against each other. If we're unhappy with the job they're doing, we should elect a different government that will do a better job, not just silence groups we don't like. They are not passive elements in this who are just helplessly acted on by outside forces.
        nate_meurer 5y ago
        > everyone else is allowed to talk to the government and advocate for their interests, but you are not In practice, this is exactly the problem with revolving-door politics and regulatory capture. > we should elect a different government that will do a better job Agreed, and I would add that one of the most important functions of journalism like the OP is to inform the voters about these situations.
  - alfl 5y ago
    For example, given that Google successfully litigated the Oracle Java API copyright case in the public court system, it seems that it gains advantages from public institutions. Simple reciprocity indicates that they should support institutions from which they benefit. Mutatis mutandis for, eg, roads so that employees can get to work, etc.
    - leephillips 5y ago
      But the employees pay taxes on their salaries. And Google’s corporate profit is taxed through taxes on dividends imposed on shareholders. The only tax that Google can evade is the double taxation on profits that will be taxed again when distributed. Although it is true that this tax rate is lower than income tax.
      - andromeduck 5y ago
        Just like with income taxes - it doesn't change the tax wedge at equalibrium but it feels better and that's what's important. It's like going to a store where everything is eternally 40% off.
      - alfl 5y ago
        Google has never paid a dividend. “Double taxation” refers to taxation post distribution not prior (source: I was a corporate tax accountant). Finally, “evasion” is illegal. “Avoidance” is a legal tax strategy.
  - mindvirus 5y ago
    Those taxes also pay for guns and missiles and much worse stuff. Is it ethical to pay for these things? The point that the parent is making is that there's a legal obligation to pay taxes, but it's not an ethical one - the government says what you owe, and you pay that. It's muddied by companies lobbying to set the laws, but I would have to agree paying taxes the laws say you owe is not an ethical question.
  - gher-shyu3i 5y ago
    > Taxes pay for all sorts of things in society. They pay for childhood education, they build roads, they pay for services like fire departments. What's the government doing by just collecting its citizens hard earned money? It should also invest in companies and other ventures and make its own money. It also has natural resources (oil, natural gas, etc.) at its disposal. Only if those are not enough can it ask its citizens to pitch in.
- megablast 5y ago
  You are paying for what you use. You think it’s ethical to use something and someone else should pay for it?? Or don’t you use roads, police, education, services, etc..,
  - smabie 5y ago
    I mean, not everyone uses the same things at the same amount.
  - abeppu 5y ago
    Let's also bear in mind that you can benefit from something without "using" it. I once talked to a guy who was furious that his property taxes funded public schools b/c he didn't have kids. But ... I think we'd all be worse off if there were no public schools and there was an illiterate underclass. I don't have a car and rarely drive on highways, but I have no idea where my groceries would come from if public roads were not present. I don't expect to collect social security, but I pay into it with the knowledge that all my elderly family members collect it. On the other hand, by paying our taxes, we Americans maintain thousands of nuclear weapons, and the largest and most elaborate military on the planet. So ... not all of what we pay for is "good".
- romwell 5y ago
  > What is ethical about paying taxes? Genuinely curious. What's ethical about playing in a poker tournament and paying the entry fee? Just curious. If you are getting rich in this country, taxes are paying for what enabled you to get rich in the first place: the human capital.
- abeppu 5y ago
  One quite popular and compelling family of ethical theories is utilitarianism, wherein "ethical" roughly means "resulting in the greatest happiness and well-being for all". Taxes and the public infrastructure and spending they support are clearly tied up in the well-being of most if not all in society. Taxes paid or not paid by corporations presumably impacts prices to customers, returns to investors, the success, failure or extent of public programs, and future decisions of taxes levied against individuals. How are taxes _not_ a thicket of ethical issues? However, I think a really ambiguous question is whether we should actually care about _corporate_ taxes over questions like treating capital gains income on the same footing as wage income. One expects that when corporations don't pay taxes, their shareholders eventually reap those savings as capital gains income ... so isn't it eventually taxed? I'm assuming here that only large multinationals engage in this sort of scheme; if there were a whole economy among rich individuals who always push their transactions through Bermudan-Irish shell companies, then perhaps it might never get taxed at any rate?
ergocoder 5y ago
No. However, paying tax is hardly an ethical matter. Am I unethical to choose standard deduction because it reduces my tax more than choosing itemized deduction? No? Yes? Maybe?
- nwienert 5y ago
  Do you think media / social media shaming companies for performing elaborate tax dodges helps or hurts put pressure for political action?
  - ergocoder 5y ago
    No idea. But it doesn't seem to help much. For example, many Dems shout "tax billionaires" for years. This rallies a lot of people. "Yeah!!! Let's tax them more" we all chant. Then, when Dems is elected, they are raising tax on salaried employees who earn more than 400k a year. (Not sure if they has gone through with it yet) I didn't know I was categorised as a billionnaire.
    - roenxi 5y ago
      I suspect people think about wealth on a log scale - in my mind $90 billion and $100 billion are basically the same number despite being rather different. Thinking in terms of orders of magnitude - $400k is a lot closer to $1,000k than the US median income of around 40k. Politics isn't about precise language. They just mean wealthy people. I thought they were pretty up-front about that.
      - jokethrowaway 5y ago
        That's quite ingenuous. It's of course easier to charge more taxes for moderately wealthy employees who don't have a clever tax setup and may need to. Really rich people with clever tax setups will just move out and you'll get no more revenue.
    - mLuby 5y ago
      One of only two Independent senators in Congress shouted "tax billionaires" for years, then when he didn't win the presidency, the billionaires just carried on unmolested.
fny 5y ago
Taxes area already codified in law, so it makes sense for the targeted behaviors to also be codified.
voidfunc 5y ago
One view is that the only ethics that really matters is what the law says is legal. Laws are derived by the people and encode their ethical permissibility within them.
- whimsicalism 5y ago
  Is that your view? Is it a particularly common view? Otherwise, why is it worth discussing?
whatgoodisaroad 5y ago
Paying a fair amount of taxes definitely has a big ethical component to it, AND the laws around it probably ought to be changed, but that doesn't imply that they should be changed strictly because of the ethical reasons. Specifically, collecting a reasonable amount of taxes is key to the function of governments as they're set up. It would be unethical to sell somebody a car that secretly has no motor, but ethics isn't the only reason cars need motors.
- shadowgovt 5y ago
  It is worth noting that what is "reasonable" and who owes it is one of the largest pieces of the work of a government.
- deleted 5y ago
  [deleted]
- gher-shyu3i 5y ago
  What's "fair share"? This keep getting repeated without any quantification.
  - nraynaud 5y ago
    In France it’s codified at the constitutional level, it’s a varying tax rate (ie marginal tax rate with slices)
- insert_coin 5y ago
  Taxes long ago stopped being the main way governments fund themselves. If taxes were about financing the government there would just be one tax called the-cost-of-government-tax and that's it. There would be no need to tax everything you do, and at different rates and on some days but not others, but when the moon is full on tuesday you pay double except if you lived on 72nd street during 2008... Taxes are about control, about influence, and about corruption. The loopholes are there becasue someone put them there, they are not hidden. The tax-code is so complex because someone made it that complex, someone doesn't want it to be easy.
imgabe 5y ago
Paying taxes has nothing to do with ethics. It is the government's job to set the tax rate and tell you how much you owe. It's not like "you are legally obligated to pay this much, but there is an ethical obligation to add another X% as well"
jokethrowaway 5y ago
Charging taxes is unethical and a violation of the non aggression principle. I pay taxes because the alternative is fines and eventually jail. That's theft, that's coercion. The less taxes you pay the more power to you - and I'd appreciate if you shared how.
- Sebguer 5y ago
  Living up to your account name with this hilarious response!
  - dang 5y ago
    Comments like this will get you banned here, regardless of how wrong someone else is or you feel they are. Please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules.
- dang 5y ago
  Please don't take HN threads further into ideological flamewar. You've done it more than once recently, and we want the opposite here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
dang 5y ago
Please don't take HN threads further into flamewar. It makes discussion noticeably crappier. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

brundolf 5y ago

These laws are enormously complex and there will always be loopholes. You can prosecute someone for maliciously exploiting your computing system, even though technically "they're just using the rules you wrote", because there will never not be such rules that allow for exploitation.

ergocoder 5y ago
Then, close the obvious one first. This double Dutch Irish thing. It's so obvious that we even have a nick name for it. The law is hardly perfect as it is. Will never be. Just because there are more holes. It's not the reason to not close the most obvious/impactful one.
- Jon_Lowtek 5y ago
  The double irish was closed on January 1st 2020, after a five year grace period for the multinationals to restructure.
tialaramex 5y ago
This is why the UK ended up with a General Anti-Avoidance Rule (in the UK this rule is named the "Anti-Abuse Rule" but it's a General Anti-Avoidance Rule just with a different name) The way a general anti-avoidance rule works is it says you can't do things that are just to avoid paying tax. The tricky part, obviously, is figuring out how a jury can decide if it was really just to avoid paying tax. The UK's approach is a Double Reasonableness test. The jurors are asked to consider not merely what they, personally might think would be reasonable, but anything any conceivable reasonable person might think is reasonable. So maybe you can't personally imagine why anybody would want multiple sports cars, but you can imagine somebody else who might think it's reasonable to buy them, so the person who avoided tax by purchasing sixty sports cars passes the Double Reasonableness test. On the other hand, you may be unable to conceive of any person who could think that it was reasonable to open over 4000 bank accounts and then deposit £99999 into each account, if not for the fact that it avoided a tax on larger deposits and so that fails the Double Reasonableness test. [These examples are hypotheticals, feel free to go dig up actual schemes which have passed or failed the test] This provides appropriate latitude. And even if your strategy fails the Double Reasonableness test, you don't go to jail or anything, you just don't avoid taxes, you owe taxes exactly as if your behaviour didn't result in a favourable tax outcome. Which, if you really didn't do it just to avoid taxes as you've claimed, should surely be fine... The other trick which was introduced at the same time imposes a duty on tax avoidance lawyers. If you help people plan to avoid taxes, that's cool but you have to explain how your scheme works to the taxman. You likely charge for your help, that's legal, and you keep that money even if the scheme doesn't actually work (that's legal and it's just smart business) but your duty ensures that the taxman already knows about the scheme before it's used, and can decide if they want government to legislate to close it next year, if they want to go to court to claim it doesn't work (because of GAAR), or if they just let it carry on.

the_optimist 5y ago

There’s an additional level on top of this: those same politicians often actually participate in the design of tax structures that enable the same companies to be chastised for utilizing those structures and “not paying their fair share.”

hirsin 5y ago
Surely you don't accuse developers of being in cahoots with the attackers that use their bugs? Now, we fix our bugs, so there's a difference...
- yunohn 5y ago
  The politicians are provably benefitting from the loopholes they help legislate. Individuals working at companies are very rarely (or never) benefitting from malicious actors attacking their company.

sarakayakomzin 5y ago

Bigly smart take. When I travel in states without left lane enforcement, I make sure to stay in the left lane going the bare minimum of the speed limit and shout to all the (Dems mostly) who want to don't want to pass on the right. it's not illegal!

cmeacham98 5y ago

> Politicians should just do it. Read the whole article, they did. > Instead, they (Dems mostly) parade around publicly shaming companies who reduces tax in a legal way. I'm not aware if google specifically has done this, but the associated problem here is that typically massive companies pay lobbyists to get the government to create (and keep) these loopholes.

he_is_legend 5y ago
Can someone explain to me why lobbyists are permitted? Surely politicians should be representing the needs of people who voted for them. Lobbyists appear to enable exactly the opposite behaviour.
- candiodari 5y ago
  Because generally you want lobbyists. You can say many things about politicians, but they don't know anything about how most of the economy and country works, just like you and me don't. They don't understand either inner cities or the countryside, they don't understand how mining works, they don't understand ad auctions, ... (occasionally you'll have one politician who understands one/a few of these, I get it, but ...) So what happens once elected is essentially that interest groups (ideally multiple), amongst other companies, industry associations, unions, pension funds, government representatives, ... see the elected representatives, quite literally teach them, in a biased way, even write legislation for them (this means hiring a team of sometimes hundreds of lawyers and putting them at their disposal), and the general idea is because multiple interest groups participate you get a somewhat reasonable negotiated outcome. You don't want oil industry legislation to be written by Greenpeace. You also don't want it written by ExxonMobil. So what to do? Lock whoever they send to represent them in a room, have someone to check for guns at the door, and have them fight it out. Of course, none of these interest groups are playing fair. That can (and generally does) lead to very biased laws. However, when it comes to contentious issues, the interest groups that win are actually popular citizen-based interest groups (e.g. in climate change legislation it's clearly not one-sided, at least attempting a compromise between multiple parties, when it comes to police power, clearly someone's providing counterweights to police requests, and so on) So the general idea of democracy is: we have many idiots, not just one, to hopefully get at least "average" intelligence and decision making, then we have them listen to anybody who wants attention and then collectively take a decision. They make too many mistakes or stop listening? We replace them. Does it give ideal outcomes? No. Is it a million times better than forcing one interest group's opinion 100%? Yes. Does a mountain of money really help in making yourself heard better? Yes. It's better than an idiot who knows nothing about anything taking control of everything, which is what most alternative systems boil down to.

o_p 5y ago

Companies should contribute to society, they benefit off the public and legal infrastructure.

kylecazar 5y ago
I think that's why parent advocated for closing the loopholes. And I tend to agree. Would be great if we could just rely on companies to pay as much tax as they can to 'contribute', but why leave it to the honor system? Close the loopholes and codify it. It's the only sustainable, efficient way.
- ergocoder 5y ago
  I cannot even rely on myself paying more tax than I'm legally required to. I'm sure you don't intentionally over pay your tax either. If you want more tax, just codify it.
goldenchrome 5y ago
They should, but companies tend towards amorality the larger they become. I think you're right to care about the issue, but we should forget about using shame as a tactic. We think of companies as institutions comprised of people who can be reasoned with, but it's more effective to think of companies as a bacterial growth on a petri dish named Earth. If you want a large company to pay taxes you have to make well-defined laws and enforce them.
- o_p 5y ago
  Intent is a part of the law, not only actions. If you use an exploit in computer systems to get unauthorized access you cant just say "well, thats how its designed, write better programs next time". Retroactive taxes should apply here, what was written in the law was wrong with the actual intent of the lawmaker, we shouldnt encourage this stupid cat and mouse games, just pay your taxes.
  - goldenchrome 5y ago

milofeynman 5y ago

I'm sorry but you're a bit wrong. Give this propublica series a read. https://www.propublica.org/series/gutting-the-irs https://www.propublica.org/series/gutting-the-irs

dillondoyle 5y ago

Dems are also the only ones at least proposing & trying to pass changes - even if not enough. Infra bill would be paid for by restoring higher corporate tax rate and a few law changes on foreign tax. To me it's not all bluster. But I agree here in the loopholes are hard to close with entrenchment. The paid for definitely rests on way more sound math than republican 'job growth -> gdp' magic. There is quite a lot but just a few things I quickly googled: - calculate 21% tax on country-by-country basis, eliminate tax-free 10% foreign point of return - make it harder to invert by acquiring/merging foreign companies to offshore profit - eliminate tax benefits for “Foreign Derived Intangible Income” (e.g. shift IP abroad i think apple does this?). I think this one also moves those incentives stateside which would be good https://www.cnbc.com/2021/03/31/biden-infrastructure-plan-to-raise-taxes-on-global-corporations.html https://www.cnbc.com/2021/03/31/biden-infrastructure-plan-to... https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/ https://www.whitehouse.gov/briefing-room/statements-releases...

gher-shyu3i 5y ago
They had their chance when the corporate tax rates were 35% or higher. We know the game, nothing is going to change with higher tax rates, except more money being wasted.
- throwaway189262 5y ago
  Actually, they didn't. Democrats have only had majority control of congress and the presidency for 5 of the last 40 years. The rest of the time, Republicans can block any bills they don't like. And they really don't like huge corporations paying taxes.
  - 0xy 5y ago
    Obama had a supermajority and didn't do anything (except the lobbyist hellscape that is the current US healthcare system). He could've passed tax reform.
    - 5y ago

ourmandave 5y ago

Instead, they (Dems mostly) parade around publicly shaming companies who reduces tax in a legal way. Yeah, come on AMERICANS, get off your asses and go vote for Ireland politicians who will close the loop hole in the IRISH tax system. <eye-f*cking-roll>

dang 5y ago
Please don't post like this here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

jokethrowaway 5y ago

Because part of those money flow back to the government, while middle class and small business are left paying the bill for the entire of society. That said, I'd rather have the government disappear and be replaced by companies providing insurance, protection and lawmaking - than these companies to start paying taxes.

throwaway189262 5y ago

If Dems had no intention to fix these loopholes why would they waste time making a bunch of hoopla about it? Words imply intent. Would you rather they say nothing and look away, as the Republicans are? Dems are at least doing something besides electing a billionaire who dropped the corporate tax to the lowest it's been since the 1930's.

ergocoder 5y ago
Yes, because right now they say one thing but do the other. Would your rather they deceive than saying nothing?
- throwaway189262 5y ago
  What is the other thing they're doing? Nothing I've seen in their tax bills affects average americans
  - ergocoder 5y ago
    One example is taxing the billionaire. They are telling shouting shaming. Then, Dems will actually tax salaried employees who earn more 400k a year. Now this doesn't impact average American, sure. But they could have been upfront about taxing salaried employees. Another example is exactly this news. They are shaming yelling at the companies for not paying more tax. Yet they don't codify the tax law to get companies to pay more tax. Based on their yelling, they could have just added "no double Irish practice" into the tax law. No? There are many similar laws that handle extreme complex situation like "no money laundering", "no market manipulation". It's not perfect, but we still manage to handle them. At best, Dems are misleading the public. My guess is that they can't close that loophole without negative impact on other areas. But Dems never explain this at all. They try hard to say companies are evil. Yet they are the ones with power who do nothing. This is like you starting a new job, and nobody codifies your responsibility, and you are constantly yelled at for not fulfilling your obligation. Sure, Dems is the lesser of the two evils when comparing to Republicans. But let's not act like they are not deceptive here.

yunohn 5y ago

>> If I have a way to reduce tax, I'll do so as well. Please do enlighten the rest of us here, on how to reduce our taxes down to single-digit percentages, or millions/billions in absolute.

ergocoder 5y ago
Yes! I wish I could do double Irish loophole as well, but I can't. Do we want to close the loophole or extend the loophole to everyone? I'm confused now.
- yunohn 5y ago
  That’s exactly my point, that you can’t do it. Individuals rarely have any avenues to construct such elaborate tax reduction schemes. I think it’s disingenuous to say that it’s similar to how one normally looks for legal tax remedies. Instead, it’s clearly a loophole invented for their own benefit.
  - ergocoder 5y ago
    My main point is that we all know what the loop hole is. We even have a nickname for it. I almost always spend the best of my ability to reduce tax. If this loop hole applied to me, I would have done it as well. Not sure why it is disingenuous. Why can't we either close it or extend it to everybody? Dems led governments for years during Obama's era. What's with the yelling and no action?

thatwasunusual 5y ago

> Nobody is against closing the loop hole. Nobody? Including those who benefit from it, you mean?

ergocoder 5y ago
I meant the perceived majority seen by the amount of yelling on twitter Reddit and etc., at least. I haven't seen much of people supporting the "let's not close the loophole" movement. I'm sure my 0.5 year old baby is neither for nor against this loophole. I asked but I didn't get the answer. Come on, man.