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The problem is that tax avoidance is an economy of scale - it's easier to avoid taxes the bigger your revenue stream is, and as such follow the letter of the ta

by yxwvut 5y ago

The problem is that tax avoidance is an economy of scale - it's easier to avoid taxes the bigger your revenue stream is, and as such follow the letter of the tax law while completely subverting the spirit of it (whereas the gap between those is far narrower for small players without a multinational presence, multiple subsidiaries, etc). The flexibility goes up, and the legal cost of doing so (which has a fixed lower bound) becomes a proportionally smaller part of your costs and has a higher ROI.

lotsofpulp 5y ago
I do not know what the "spirit of it" means. Obtaining records from big companies facilitating money transfers does not mean tax liabilities have changed for anyone. If big companies are getting away with not paying their fair share, then laws should be changed prevent them from doing that. But they can simultaneously happen. However, most examples given of supposedly nefarious tax avoidance I see are simply businesses that plow a ton of money back into expanding the business, hence bringing their tax liability way down, exactly as the law intended. Amazon being the prototypical example. Or even better, is the complaining of billionaire's having low income tax...when they have low incomes. The better use of time and energy would be to propose additional property (wealth) taxes.
- seanp2k2 5y ago
  >the complaining of billionaire's having low income tax...when they have low incomes Just because they take a $1 salary and get paid in stock or have tons of stock holdings that increase in value instead doesn’t mean they don’t have any money to play with to cover their own personal needs / desires, as I’m sure you’re aware. This is what people mean about avoiding the spirit of the tax while adhering to the letter of the law. From what I understand, they way they do this is to get millions per year in personal loans from banks, secured with their stock. Then, instead of “income”, they have “debt”, but most reasonable people would still see that as “they can spend millions of dollars on whatever they’d like and they didn’t pay tax on it”. Most people would love to do this, the problem being they don’t have hundreds of millions+ in stock to secure those same types of loans. I’m sure every politician working with tax law understands how they play the system (and how tax offshoring works for companies), yet they choose to do nothing about it as not enough lay folks complain hard enough to affect their next election. Combine that with “the car dealership” / “ISP” model, where “if we all agree to do the bad thing and hold the line, people will have no choice but to let us continue to do the bad thing”. There’s no political will to fix it among those in power, as they benefit from it too. This is why I have very little hope of ever seeing real tax reform in my lifetime in this country — the politicians willing to actually carry out the will of the people or engage in topics that would materially benefit the masses are few and far between. It’s much easier to keep everyone frothing at the mouth over tie pins and tan suits.

by yxwvut 5y ago

lotsofpulp 5y ago

I do not know what the "spirit of it" means. Obtaining records from big companies facilitating money transfers does not mean tax liabilities have changed for anyone. If big companies are getting away with not paying their fair share, then laws should be changed prevent them from doing that. But they can simultaneously happen. However, most examples given of supposedly nefarious tax avoidance I see are simply businesses that plow a ton of money back into expanding the business, hence bringing their tax liability way down, exactly as the law intended. Amazon being the prototypical example. Or even better, is the complaining of billionaire's having low income tax...when they have low incomes. The better use of time and energy would be to propose additional property (wealth) taxes.

seanp2k2 5y ago
>the complaining of billionaire's having low income tax...when they have low incomes Just because they take a $1 salary and get paid in stock or have tons of stock holdings that increase in value instead doesn’t mean they don’t have any money to play with to cover their own personal needs / desires, as I’m sure you’re aware. This is what people mean about avoiding the spirit of the tax while adhering to the letter of the law. From what I understand, they way they do this is to get millions per year in personal loans from banks, secured with their stock. Then, instead of “income”, they have “debt”, but most reasonable people would still see that as “they can spend millions of dollars on whatever they’d like and they didn’t pay tax on it”. Most people would love to do this, the problem being they don’t have hundreds of millions+ in stock to secure those same types of loans. I’m sure every politician working with tax law understands how they play the system (and how tax offshoring works for companies), yet they choose to do nothing about it as not enough lay folks complain hard enough to affect their next election. Combine that with “the car dealership” / “ISP” model, where “if we all agree to do the bad thing and hold the line, people will have no choice but to let us continue to do the bad thing”. There’s no political will to fix it among those in power, as they benefit from it too. This is why I have very little hope of ever seeing real tax reform in my lifetime in this country — the politicians willing to actually carry out the will of the people or engage in topics that would materially benefit the masses are few and far between. It’s much easier to keep everyone frothing at the mouth over tie pins and tan suits.