4 ms·

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not

by aarondf 13y ago

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes a public duty to pay more than the law demands." Judge Learned Hand in Helvering vs Gregory, 1934.

arrrg 13y ago
The power differential involved can make it very sinister, at least from my perspective. If everyone could be equally resourceful in avoiding taxes then I would agree completely. If everyone is able to avoid paying taxes with equal ease (or difficulty) there is no problem. However, I don’t think that’s the case. Some can throw lawyers at the problem, others can’t. That makes it problematic. Yes, it’s a systemic issue, too (and that is likely the place where it has to be fixed), but I don’t think there is anything wrong in thinking that using more esoteric tax avoidance schemes available only to the few is deeply immoral, if not illegal.
adamt 13y ago
I suspect though that that US Supreme Court ruling has little impact and no jurisdiction on an HMRC (HMRC = Her Majesty's Revenue and Customers, the UK's equivalent to the IRS) investigation into the tax practices of Google's UK subsidiary.
- bdcravens 13y ago
  I believe the poster intended to quote the Justice to speak to the principle of the matter, not to imply that the ruling had jurisdiction.
  - aarondf 13y ago
    I did indeed, very much so. Thanks for saying that!
- AnthonyMouse 13y ago
  Would you prefer Lord Clyde in Ayrshire Pullman Motor Services v Inland Revenue? No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue
  - nijk 13y ago
    > "honestly" Which generally precludes lying before Parliament.
- chasb 13y ago
  Learned Hand never sat on the Supreme Court. The quoted passage is from his Second Circuit decision, 69 F.2d 810.
olefoo 13y ago
Except that Judge Learned Hand is an American judge, dealing with American cultural norms and political ideals. British law may have rather different ideas as to what constitutes legal obligations. As with many things, power defines the limits of society; the question being can google take on a thousand-year old theocracy and win?
grey-area 13y ago
There is however a duty not to lie to HMRC about where taxable activities are taking place. If Google has many employees in the UK booking sales, generating revenue paid into a UK bank account, but classified as going through Ireland purely as a tax dodge, as the whistleblower alleges, that's illegal evasion, not avoidance. It's morally wrong, but it's also illegal, and the complexity and long-term planning in this scheme shows that Google the corporation is not as innocent and naive about taxes as they'd like to appear. There's an interesting post hellbanned on this discussion from emmelie pointing out just how complicated the schemes are - does Google still use Google Ireland Holdings, Bermuda? For governments like the UK or US, this has become an important issue, as if they don't tackle this now, revenue from corporations and rich individuals (who often structure their accounts to receive revenue through corporations) will eventually dry up completely as everyone could choose the lowest tax jurisdiction and simply pretend to conduct all business there with loss-making subsidiaries in every other market. This is not limited to Google as all major corporations have started doing this (even the leading left-wing newspaper, the Guardian), and HMRC has just started clamping down on it. A world where corporations avoid tax completely is not a world I want to live in, and it's not one Google (if they truly believe their mantra 'Don't be evil') should aspire to either. They should simply shut down schemes to move their revenue to other countries solely for the benefits of tax evasion and instead book revenue in the country it is generated in.

by aarondf 13y ago

arrrg 13y ago

The power differential involved can make it very sinister, at least from my perspective. If everyone could be equally resourceful in avoiding taxes then I would agree completely. If everyone is able to avoid paying taxes with equal ease (or difficulty) there is no problem. However, I don’t think that’s the case. Some can throw lawyers at the problem, others can’t. That makes it problematic. Yes, it’s a systemic issue, too (and that is likely the place where it has to be fixed), but I don’t think there is anything wrong in thinking that using more esoteric tax avoidance schemes available only to the few is deeply immoral, if not illegal.

adamt 13y ago

I suspect though that that US Supreme Court ruling has little impact and no jurisdiction on an HMRC (HMRC = Her Majesty's Revenue and Customers, the UK's equivalent to the IRS) investigation into the tax practices of Google's UK subsidiary.

bdcravens 13y ago
I believe the poster intended to quote the Justice to speak to the principle of the matter, not to imply that the ruling had jurisdiction.
- aarondf 13y ago
  I did indeed, very much so. Thanks for saying that!
AnthonyMouse 13y ago
Would you prefer Lord Clyde in Ayrshire Pullman Motor Services v Inland Revenue? No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue
- nijk 13y ago
  > "honestly" Which generally precludes lying before Parliament.
chasb 13y ago
Learned Hand never sat on the Supreme Court. The quoted passage is from his Second Circuit decision, 69 F.2d 810.

olefoo 13y ago

Except that Judge Learned Hand is an American judge, dealing with American cultural norms and political ideals. British law may have rather different ideas as to what constitutes legal obligations. As with many things, power defines the limits of society; the question being can google take on a thousand-year old theocracy and win?

grey-area 13y ago

There is however a duty not to lie to HMRC about where taxable activities are taking place. If Google has many employees in the UK booking sales, generating revenue paid into a UK bank account, but classified as going through Ireland purely as a tax dodge, as the whistleblower alleges, that's illegal evasion, not avoidance. It's morally wrong, but it's also illegal, and the complexity and long-term planning in this scheme shows that Google the corporation is not as innocent and naive about taxes as they'd like to appear. There's an interesting post hellbanned on this discussion from emmelie pointing out just how complicated the schemes are - does Google still use Google Ireland Holdings, Bermuda? For governments like the UK or US, this has become an important issue, as if they don't tackle this now, revenue from corporations and rich individuals (who often structure their accounts to receive revenue through corporations) will eventually dry up completely as everyone could choose the lowest tax jurisdiction and simply pretend to conduct all business there with loss-making subsidiaries in every other market. This is not limited to Google as all major corporations have started doing this (even the leading left-wing newspaper, the Guardian), and HMRC has just started clamping down on it. A world where corporations avoid tax completely is not a world I want to live in, and it's not one Google (if they truly believe their mantra 'Don't be evil') should aspire to either. They should simply shut down schemes to move their revenue to other countries solely for the benefits of tax evasion and instead book revenue in the country it is generated in.