4 ms·

In the context of what is socially acceptable, tax avoidance and tax evasion are the same thing. Again, we aren't talking legality here we are talking morality

In the context of what is socially acceptable, tax avoidance and tax evasion are the same thing. Again, we aren't talking legality here we are talking morality. The result of the discussion on morality is an attempt to change our legal system. To say "well one of those things is legal" is basically a tautological fallacy in a discussion on whether it should be legal, which is what this is.

vixin 12y ago
Socially acceptable to whom? Avoidance is reading the rules written at length by presumably clever people and then acting accordingly to comply with them while minimizing one's tax bill taking all considerations into account. Only a fool would do otherwise. As quoted "You must pay taxes. But there's no law that says you gotta leave a tip". As to the morality, it's worth considering those of us who try to live within our incomes so we can afford to pay taxes to a government that can't live within its income'. From a British perspective: http://blogs.telegraph.co.uk/finance/andrewlilico/100024862/companies-have-a-moral-duty-to-pay-no-more-tax-than-legally-required/ http://blogs.telegraph.co.uk/finance/andrewlilico/100024862/... 'Companies-have-a-moral-duty-to-pay-no-more-tax-than-legally-required'.
- DanBC 12y ago
  Tax avodoidance used to be normal tax planning - reducing your tax burden within the law. But now it has a different meaning. Tax avoidance is the legal gray area between outright evasion and tax planning. Avoidance is the bit that your lawyers and accountants say is legal, but which hasn't yet been tested in courts. The plan might not last long before the law is changed. And you might be asked to repay some tax. Tax avoidance is the use of bizarre systems that serve no purpose but to reduce tax burden. Starbucks is a great example here. They have a gajillion shops in the UK; they employ many people; they're expanding. By any sensible analysis Starbucks is a sucessful company in England. Yet the shops make no profit. The only reason they make no profit is because they have to buy buy coffee beans from one supplier, and that supplier prices the beans very much higher than other bean roasters. That bean-roasting supplier happens to be based in a tax haven. Can you agree that there is a difference between "not paying tax that you legally do not need to" and "going out of your way to create bizarre semi-legal schemes in the hope that you get away with it; especially taking into account the numbers of people working to create tax avoidance schemes and people working to investigate such schemes". The other moral point is that these companies make full use of the products of the tax system - they would most certainly call the police if one of their offices was burgled - and so they should consider making sensible donations to that tax system. (And before anyone mentions wage taxes or sales taxes: these are paid by the employees or by the customers, and merely collected by the company).
  - to3m 12y ago
    There are also business rates. (For non-UK readers: property tax on commercial property.) I'm surprised at the implication that because of all this shit they're spending money on - shops, employees, expansion, etc. - they must be profitable. (Maybe they are, I don't know. Maybe they are stashing it away elsewhere. It would certainly make sense for them to do that.) But it doesn't automatically follow, because profit is what you have left after you've paid for all this stuff. All this expenditure is in fact bad for the bottom line. You can't even argue that the money has to come from income, and that therefore the very fact of their profitless expansion is evidence of sharp practice. People have been known to lend out money! Sometimes they'll do it merely in exchange for a share in your business. If they like the cut of your jib, you don't even have to be making money yourself in the first place. ...which is why I'm sort of surprised to see this line of thought implied on HN ;)

vixin 12y ago

Socially acceptable to whom? Avoidance is reading the rules written at length by presumably clever people and then acting accordingly to comply with them while minimizing one's tax bill taking all considerations into account. Only a fool would do otherwise. As quoted "You must pay taxes. But there's no law that says you gotta leave a tip". As to the morality, it's worth considering those of us who try to live within our incomes so we can afford to pay taxes to a government that can't live within its income'. From a British perspective: http://blogs.telegraph.co.uk/finance/andrewlilico/100024862/companies-have-a-moral-duty-to-pay-no-more-tax-than-legally-required/ http://blogs.telegraph.co.uk/finance/andrewlilico/100024862/... 'Companies-have-a-moral-duty-to-pay-no-more-tax-than-legally-required'.

DanBC 12y ago
Tax avodoidance used to be normal tax planning - reducing your tax burden within the law. But now it has a different meaning. Tax avoidance is the legal gray area between outright evasion and tax planning. Avoidance is the bit that your lawyers and accountants say is legal, but which hasn't yet been tested in courts. The plan might not last long before the law is changed. And you might be asked to repay some tax. Tax avoidance is the use of bizarre systems that serve no purpose but to reduce tax burden. Starbucks is a great example here. They have a gajillion shops in the UK; they employ many people; they're expanding. By any sensible analysis Starbucks is a sucessful company in England. Yet the shops make no profit. The only reason they make no profit is because they have to buy buy coffee beans from one supplier, and that supplier prices the beans very much higher than other bean roasters. That bean-roasting supplier happens to be based in a tax haven. Can you agree that there is a difference between "not paying tax that you legally do not need to" and "going out of your way to create bizarre semi-legal schemes in the hope that you get away with it; especially taking into account the numbers of people working to create tax avoidance schemes and people working to investigate such schemes". The other moral point is that these companies make full use of the products of the tax system - they would most certainly call the police if one of their offices was burgled - and so they should consider making sensible donations to that tax system. (And before anyone mentions wage taxes or sales taxes: these are paid by the employees or by the customers, and merely collected by the company).
- to3m 12y ago
  There are also business rates. (For non-UK readers: property tax on commercial property.) I'm surprised at the implication that because of all this shit they're spending money on - shops, employees, expansion, etc. - they must be profitable. (Maybe they are, I don't know. Maybe they are stashing it away elsewhere. It would certainly make sense for them to do that.) But it doesn't automatically follow, because profit is what you have left after you've paid for all this stuff. All this expenditure is in fact bad for the bottom line. You can't even argue that the money has to come from income, and that therefore the very fact of their profitless expansion is evidence of sharp practice. People have been known to lend out money! Sometimes they'll do it merely in exchange for a share in your business. If they like the cut of your jib, you don't even have to be making money yourself in the first place. ...which is why I'm sort of surprised to see this line of thought implied on HN ;)