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I am angry that the law is so flawed, that the authorities are so slow to act, that the accountancy firms employed to write the laws were not impartial, and tha

• rayiner 13y ago
  Without addressing the tax situation directly: the fact of the matter is that civilized society is not possible without good faith on the part of people charged with following the law. The threat of enforcement mostly exists to keep honest people honest. It's not really practically possible to police a citizenry determined not to follow the law in good faith. Always blaming the system is not productive. If the system has to be air-tight to get a usable result, you've already lost the battle.
  • Jabbles 13y ago
    I disagree, but I may not have expressed myself clearly. I have no doubt that an attempt to make the tax system air-tight would result in an even greater degree of loopholes and bureaucracy. But laws are not air-tight. Case law and "common-sense" should prevail. Shutting down the most egregious tax-avoiders (i.e. those companies who rely on untested laws) would quickly clarify the situation for all other accountants. Loopholes would be exploited once - accountants would not sign off the audits of companies using them in the future. In this vision of the future the exploiting companies need not be punished harshly - exploring and testing the tax system could be looked on in the same way as white-hat penetration testing. "Thank you for bringing the loophole to our attention. You may not use it. Return any profit you made from it. However, anyone caught using it in the future will be face a much greater punishment."
  • andrewflnr 13y ago
    While you're general point is true, I don't think it's terribly relevant here. This is definitely a case of the system being broken. Taxes are a necessary evil to begin with; they're a direct impingement on the freedom of citizens. Making the laws surrounding them so hideously complicated makes it much worse. No one's really asking for air-tightness, just low enough complexity that we don't have to have full-time professionals to make sense of it. Taxes should be easy.
    • rayiner 13y ago
      What makes you think taxes should be easy? Defining income is hard. Defining income in an international context is exponentially harder. The corporations in this case are not using obscure loopholes to avoid taxes. They're taking advantage of necessary complexities in the tax code: that it taxes net income rather than revenue, and that it taxes income reasonably related to the jurisdiction and not all income everywhere. What's complex is the situation: accounting for the income of huge multi national businesses that have customers and employees in dozens of countries, whose income involves transactions with pieces spread out all over the world. Its like saying that the Windows kernel should be simple. Sure, as long as you give up decades of backwards compatibility and a multitude of hardware support you could make it simple. Analogously, the only way to simplify the tax code might be to give up on taxing corporations. But you can't jump to the conclusion that the complexity is unnecessary.
      • lsaferite 13y ago
        What makes you think we should be taxing income? There are other means of taxing the citizenry and funding the government. Why should we tax the compensation for work, physical and/or mental, of the population? Better would be to narrow the compliance field to taxing consumption. And in the US we are generally voracious consumers (can speak for the UK).
    • enraged_camel 13y ago
      >>Taxes are a necessary evil to begin with; they're a direct impingement on the freedom of citizens. Wrong. They are the price citizens have to pay for those freedoms. Want to have the freedom to use public roads? Pay taxes to fund their building and maintenance. Simple as that. The same applies to businesses as well. Heaven knows how much public infrastructure Google is using in England. So why aren't they paying for it? (Not to single out Google of course.)
      • lsaferite 13y ago
        You could argue that the money they introduce into the local economy via salaries and costs for rent/leases/purchases IS taxed and providing compensation for the governmental services being used.
• jussij 13y ago
  > I am angry that the law is so flawed, I can imagine this could be quite a difficult problem to fix. These big companies bending the law get away with it only because they a multi-nationals, which means they are governed by more than one set of tax laws. Each country in which they operate has different tax rules and they use these differences to avoid and minimise their tax. They are also help out by the fact that countries are notoriously bad at cooperation, so the problem always takes a longer to fix than it should.
• grey-area 13y ago
  I am angry that the law is so flawed, that the authorities are so slow to act, that the accountancy firms employed to write the laws were not impartial, and that companies negotiate special deals with HMRC. You shouldn't be, because tax avoidance/evasion measures like the Double Irish With A Dutch Sandwich are not caused by the flaws in one country's laws, but by multi-national corporations exploiting differences between tax laws in different jurisdictions to avoid paying tax where they generate revenue and instead pay tax in the jurisdiction with the lowest tax rates. This is not something HMRC alone can easily fix, nor is it a flaw in just one set of laws, but a lack of international control governing corporate behaviour, which is unlikely to be resolved soon unless you want to see a world state. The reason for the special deals is that corporations have many ways of pressuring governments (jobs, investment, etc) and the big ones wield more power and influence than the state itself. Instead perhaps you could try being angry at large corporations for evading their responsibilities as corporate citizens to pay tax, for dissembling about where revenue is generated and how in an attempt to avoid tax, for creating subsidiaries and licensing agreements solely to declare a nominal loss, and for creating complex chains of companies in many different countries in an attempt to evade tax. Despite the apparent clarity of terms like avoidance and evasion, or legal and illegal, which people use to describe these activities and make them appear simple, there is no clear line between avoidance and evasion, only a set of interpretations, and in this case Google have strayed too close to evasion in the opinion of this whistleblower and of HMRC. Given the evidence presented and the lack of convincing answers from Google, I'm inclined to agree.