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The higher-end schemes have allegedly become so opaque, obscure, and fast-evolving that much of what goes on is only arguably legal rather than proven legal. Th

The higher-end schemes have allegedly become so opaque, obscure, and fast-evolving that much of what goes on is only arguably legal rather than proven legal. This gray area has spawned the term "tax avoision".

generalizations 4y ago
> arguably legal rather than proven In general, it's probably better if things have to be proven illegal. I'd rather that my life wasn't limited to only doing those things which have been pre-approved. If there's a problem with something, then it should be explicitly prohibited; not the other way around.
- Hermitian909 4y ago
  > I'd rather that my life wasn't limited to only doing those things which have been pre-approved. Gray area means that small loopholes in legal language don't instantly balloon into carte-blanche to commit all kinds of crime, without them all it takes is a clever reading of the law to break its spirit. Practically, this means the government cannot regulate complex industries and situations. Things like "food safety" which are the bedrock of all modern countries are usually not possible without these sorts of gray areas.
  - chrisbolt 4y ago
    The government left in the loopholes, they can close them.
    - friend_and_foe 4y ago
      "The solution is to write bug free code"
      - chrisbolt 4y ago
        No, the solution is to fix the bugs that are found.
        friend_and_foe 4y ago
        You're right, that was very unforgiving of me, and not the best interpretation of what you said. To continue this analogy, I think the problems are, the process to fixing it is arduous and difficult, as much as writing it to begin with, bugs become expected behavior and have to continue being supported, and the "business case" executives have too much say in writing it.
        chrisbolt 4y ago
        And to further continue the analogy, the problems would be avoided if the (tax) code was simpler.
        Hermitian909 4y ago
        There's no guarantee that this fixes the problem. Imagine that I'm trying to disallow a particular type of fraud that's difficult to define. I might spend years or decades trying to write down the perfect law of what some unethical finance people shouldn't do all while they get away with a thousand variations of the "I know it when I see it" crime. Implied by this, we have to choose between: 1. Very frequently updated laws everywhere (multiple orders of magnitude faster than today) 2. Criminals get away with crimes that could totally be prevented with "gray area" laws. (1) does not seem compatible with democracy and (2) is not politically viable in any country. Things like food safety scares require immediate and effective action by government or bedlam follows.
        Kinrany 4y ago
        > Very frequently updated laws everywhere (multiple orders of magnitude faster than today) This generally works by giving a government agency the ability to frequently redefine the placeholders in the laws > does not seem compatible with democracy Democracy is inherently a poor choice whenever expertise is needed. It's better to let experts do their thing and then hold them accountable for the results.
deleted 4y ago
[deleted]
xiphias2 4y ago
Personally I have seen some tax codes that were written to make using offshore companies mostly unpractical / illegal, but when an offshore lawyer explained to me the loophole and I reread it multiple times, it became clear that it was explicitly written to look like a nice anti-offshore law, but contain loopholes that are clearly legal, just makes using them more expensive. I'm not saying it's nice / fair, but this is reality. It's similar to putting a buffer overflow bug in a C/C++ code on purpuse, but hiding it in a nice function.
- AnthonyMouse 4y ago
  A big part of the problem with eliminating tax avoidance is that many businesses would actually leave the jurisdiction if it was the only way to avoid paying high taxes, and governments know this, so they structure the tax code to be able to tax businesses that are hard to offshore while giving breaks to the ones that could benefit from leaving if the alternative was paying billions more in taxes. But nobody wants to see a big explicit carve out like that because of the obvious unfairness (it's a huge advantage to multinationals over smaller companies), so they try to make it less obvious. The best way to prevent this is to use taxes that can't be avoided through transfer pricing, e.g. VAT. The company can move their headquarters wherever they like; the tax is paid to the jurisdiction where their customers are. But the other dirty little secret is that this would have to be government revenue neutral (just an increase in fairness), because if it actually increased the amount of taxes being paid on net then consumer prices would go up or retirement accounts would go down or both, because the money has to come from somewhere. So doing the thing that increases fairness has to be done without help from the people who want government to spend more money or you'll be impacting ordinary people who won't like it.

generalizations 4y ago

> arguably legal rather than proven In general, it's probably better if things have to be proven illegal. I'd rather that my life wasn't limited to only doing those things which have been pre-approved. If there's a problem with something, then it should be explicitly prohibited; not the other way around.

Hermitian909 4y ago
> I'd rather that my life wasn't limited to only doing those things which have been pre-approved. Gray area means that small loopholes in legal language don't instantly balloon into carte-blanche to commit all kinds of crime, without them all it takes is a clever reading of the law to break its spirit. Practically, this means the government cannot regulate complex industries and situations. Things like "food safety" which are the bedrock of all modern countries are usually not possible without these sorts of gray areas.
- chrisbolt 4y ago
  The government left in the loopholes, they can close them.
  - friend_and_foe 4y ago
    "The solution is to write bug free code"
    - chrisbolt 4y ago
      No, the solution is to fix the bugs that are found.
      - friend_and_foe 4y ago
        You're right, that was very unforgiving of me, and not the best interpretation of what you said. To continue this analogy, I think the problems are, the process to fixing it is arduous and difficult, as much as writing it to begin with, bugs become expected behavior and have to continue being supported, and the "business case" executives have too much say in writing it.
        chrisbolt 4y ago
        And to further continue the analogy, the problems would be avoided if the (tax) code was simpler.
      - Hermitian909 4y ago
        There's no guarantee that this fixes the problem. Imagine that I'm trying to disallow a particular type of fraud that's difficult to define. I might spend years or decades trying to write down the perfect law of what some unethical finance people shouldn't do all while they get away with a thousand variations of the "I know it when I see it" crime. Implied by this, we have to choose between: 1. Very frequently updated laws everywhere (multiple orders of magnitude faster than today) 2. Criminals get away with crimes that could totally be prevented with "gray area" laws. (1) does not seem compatible with democracy and (2) is not politically viable in any country. Things like food safety scares require immediate and effective action by government or bedlam follows.
        Kinrany 4y ago
        > Very frequently updated laws everywhere (multiple orders of magnitude faster than today) This generally works by giving a government agency the ability to frequently redefine the placeholders in the laws > does not seem compatible with democracy Democracy is inherently a poor choice whenever expertise is needed. It's better to let experts do their thing and then hold them accountable for the results.

deleted 4y ago

[deleted]

xiphias2 4y ago

Personally I have seen some tax codes that were written to make using offshore companies mostly unpractical / illegal, but when an offshore lawyer explained to me the loophole and I reread it multiple times, it became clear that it was explicitly written to look like a nice anti-offshore law, but contain loopholes that are clearly legal, just makes using them more expensive. I'm not saying it's nice / fair, but this is reality. It's similar to putting a buffer overflow bug in a C/C++ code on purpuse, but hiding it in a nice function.

AnthonyMouse 4y ago
A big part of the problem with eliminating tax avoidance is that many businesses would actually leave the jurisdiction if it was the only way to avoid paying high taxes, and governments know this, so they structure the tax code to be able to tax businesses that are hard to offshore while giving breaks to the ones that could benefit from leaving if the alternative was paying billions more in taxes. But nobody wants to see a big explicit carve out like that because of the obvious unfairness (it's a huge advantage to multinationals over smaller companies), so they try to make it less obvious. The best way to prevent this is to use taxes that can't be avoided through transfer pricing, e.g. VAT. The company can move their headquarters wherever they like; the tax is paid to the jurisdiction where their customers are. But the other dirty little secret is that this would have to be government revenue neutral (just an increase in fairness), because if it actually increased the amount of taxes being paid on net then consumer prices would go up or retirement accounts would go down or both, because the money has to come from somewhere. So doing the thing that increases fairness has to be done without help from the people who want government to spend more money or you'll be impacting ordinary people who won't like it.