4 ms·

What is ethical about paying taxes? Genuinely curious.

dave5104 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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.
        sarakayakomzin 6y ago
        >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. People still have the power to do so individually, but a corporation isn't democratically organized.
- alfl 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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 6y ago
  I mean, not everyone uses the same things at the same amount.
- abeppu 6y 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 6y 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 6y 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?

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 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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.
        sarakayakomzin 6y ago
        >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. People still have the power to do so individually, but a corporation isn't democratically organized.
alfl 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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 6y 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 6y ago
I mean, not everyone uses the same things at the same amount.
abeppu 6y 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 6y 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 6y 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?