Panama Papers: Mossack Fonseca leak reveals elite's tax havens • Hacker News Board

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#431

Post by snitko » Tue, Apr 05, 2016, 3:53 AM UTC

seanalltogether wrote: post #305

snitko wrote: post #141

Earlier quoted context omitted.

> If there were no taxes, you'd probably have to buy tickets to walk and drive on roads, stroll in the park, swim in a sea Do you have to insert coins into your smartphone every time you call someone these days? And yet it's almost impossible to live without a smartphone today, so people buy them and pay for the plans. But, but, they do have a choice of which operator to use (and, frankly, US is the worst example her…

It's weird you would use the telecom industry as an example of the wonders of laissez faire capitalism. This is an industry that naturally tends toward monopolies and once acquired, have shown in the past a willingness to overcharge and under deliver. > Europe/Asia is much less regulated in this respect Do you have a source for that in Europe? Ofcom in the UK is far more powerful then the FCC and actively inserts its…

I don't need a source. I'm from Russia and also lived in Latvia. Internet and phone calls are super cheap. I normally pay about $5/mo for my phone (unlimited calls, unlimited 4G internet) and $50/year for a decent internet connection at home. Industries are unregulated and there's a lot of competition.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#432

Post by smsm42 » Tue, Apr 05, 2016, 4:24 AM UTC

touristtam wrote: post #406

smsm42 wrote: post #285

Earlier quoted context omitted.

Rest of the population doesn't engage in these ways because it's not worth it for them - they do not pay enough taxes to warrant it. Some people, however, pay lots of taxes - so much that it may make sense for them to spend money and go to great length to somewhat reduce their tax bills. They most probably still pay much more tax than average person - just not as much as they could be paying if they didn't use these…

> They most probably still pay much more tax than average person - just not as much as they could be paying if they didn't use these ways. It's about relative value vs absolute value. If you use 30% of your wages toward taxes but the next person use 12% of his to pay the same absolute amount, there is an issue that needs to be addressed.

In my experience, 30% would be extremely high and not at all common - if you look at full rate and not marginal rate. E.g. I am not 1%, but relatively well-paid employee, and my full federal tax rate has been around 13-15% (marginal, of course, quite higher). If I went to some lengths, I probably could shave off a percent or so off it, but that would require me to stash some money into places where they are not readily accessible, such as IRA or alike instruments. This is just not worth it for me. If I got much more money, to the point that I do not need any of the money for consumption and in fact can not consume them - e.g. if I were a billionaire - I would certainly use these and many other instruments, it would be stupid not to do so. But right now it is just not worth the trouble.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#433

Post by smsm42 » Tue, Apr 05, 2016, 4:26 AM UTC

guelo wrote: post #301

smsm42 wrote: post #285

Earlier quoted context omitted.

Rest of the population doesn't engage in these ways because it's not worth it for them - they do not pay enough taxes to warrant it. Some people, however, pay lots of taxes - so much that it may make sense for them to spend money and go to great length to somewhat reduce their tax bills. They most probably still pay much more tax than average person - just not as much as they could be paying if they didn't use these…

It's only legal because of corruption in the government.

I'm not sure what you mean by "corruption of the government", but it is legal because your money belongs to you, not government, and you have full right to do with it whatever you please, including investing them in ways that generate less tax income from the government. Banning that would require implicit assumption that your money do belong to the government and you are restricted in using them only in ways that benefit the said government. That would be corruption to me.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#434

Post by smsm42 » Tue, Apr 05, 2016, 4:45 AM UTC

collyw wrote: post #341

pron wrote: post #297

Earlier quoted context omitted.

> it's not worth it for them - they do not pay enough taxes to warrant it Not only do they pay a larger portion of their fortune, that money makes a much bigger difference to them (us, why do I say them?) in our everyday lives. > They most probably still pay much more tax than average person They probably pay much less than what they should . They benefit from from an organized state much more than the average person…

This is so true, otherwise businesses would be flocking to set up in low regulation, low tax countries like Somalia.

This is not a smart example, since it assumes Somalia has no difference with developed countries except for low taxes. I'm sure if you try hard enough, you could find a better example of low tax countries and compare their business development with high tax countries. If, of course, your purpose is gain better understanding of the matter and not to try sounding witty for cheap without actually having any substance behind it.

As for actual Somalia tax rates, they are kind of hard to find, but we can go other way. Somalia's GDP [1] is estimated around $1 billion, while their state budget is around $200 mln. [2]. Which means in the country the government is about 20% of the economy. Which is pretty close to US figures, surprisingly. More over, if you look up in [2], you will find:

High tax burden with corruption and extortions exacerbates poverty and prevents economic recovery.

So would I believe you saying Somali has low taxes and low regulation, or Somalians who complain about high taxes and oppressive government? Who knows best? Please help me choose.

[1] https://en.wikipedia.org/wiki/Economy_of_Somalia

[2] http://hiiraan.com/op4/2014/aug/56172/somalia_fiscal_budget_...

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#435

Post by smsm42 » Tue, Apr 05, 2016, 4:47 AM UTC

pron wrote: post #371

collyw wrote: post #341

Earlier quoted context omitted.

This is so true, otherwise businesses would be flocking to set up in low regulation, low tax countries like Somalia.

Larger businesses disproportionately benefit from law-and-order and infrastructure.

I don't think it is true. Large corp can afford their own security force and infrastructure (and if you study the history of colonial corporate conquests, that's exactly what they have been doing). Small business or average consumer can afford none of this. Big corp can build their own protected bubble amid a desolated and decaying country, but if you are outside the bubble, you are in trouble.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#436

Post by snitko » Tue, Apr 05, 2016, 4:48 AM UTC

cm3 wrote: post #417

snitko wrote: post #239

Earlier quoted context omitted.

> Okay, let's say there's no governing body. Now, there's a dispute. How is it resolved? Fight to death? You've got an excellent question and I've got an excellent answer for you: https://www.youtube.com/watch?v=jTYkdEU_B4o It's a short video, but I highly recommend it to you (skip the first minute or so for a short historical intro). Please come back here and let me know if it answered your question. I also hope it…

Watched it and as I guessed you will again have, like in a distributed system, some management facility. Friedman call it a judge or arbitrator and everyone can have their own, where judges will work out contracts between themselves for disputes of their own. So, this all sounds like P2P with an evolutionary system of contracts between all kinds of parties, where there's no universal rule book (aka what we know as a…

> If this really works, good, but how do you solve that humans will see that the contract between two other parties is better and will want the same deal? Will you give it to them?

Not sure I understand the question. Who is giving whom the contract? The idea is, if you don't like the laws your protection agency / law firm provides you with, you switch firms. And that way you have a lot more control under which set of laws you want to live.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#437

Post by smsm42 » Tue, Apr 05, 2016, 4:49 AM UTC

vidarh wrote: post #333

smsm42 wrote: post #284

Earlier quoted context omitted.

Eliminating inequality of taxation means flat tax instead of progressive tax. That would require either substantial reduction of the government expenses or substantial raise of the taxes for low incomes. That probably won't be very popular.

"Inequality" here is a weasel word, because it sounds bad without further argumentation. The argument for progressive taxation is that the same tax rate is a far lesser burden on someone who makes more than on someone who makes less. If one agree with that, then progressive taxation would seem to be fairer. Of course "fair" is entirely subjective.

I agree it is a weasel word. If you argue for progressive taxation, you should not say it eliminates "inequality" - you should say inequality is awesome. You can't argue both for equality in taxation and progressive tax at the same time - they are contradictory by definition.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#438

Post by pron » Tue, Apr 05, 2016, 4:57 AM UTC

smsm42 wrote: post #435

pron wrote: post #371

Earlier quoted context omitted.

Larger businesses disproportionately benefit from law-and-order and infrastructure.

I don't think it is true. Large corp can afford their own security force and infrastructure (and if you study the history of colonial corporate conquests, that's exactly what they have been doing). Small business or average consumer can afford none of this. Big corp can build their own protected bubble amid a desolated and decaying country, but if you are outside the bubble, you are in trouble.

A villa in the jungle is not what I was talking about. Large corporations benefit from their customers being safe and secure, and from infrastructure to distribute their products. And the companies involved in "colonial corporate conquests" were huge, royally chartered monopolies, directly supported by their countries, and usually acting as their official representative; there was a symbiotic relationship between the monopoly and the state, quite the opposite from an independent existence.

Large, successful corporations virtually always get started only in well-run states, while fruit stands are set up everywhere.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#439

Post by smsm42 » Tue, Apr 05, 2016, 4:58 AM UTC

bufordsharkley wrote: post #314

StreamBright wrote: post #310

Earlier quoted context omitted.

The only "fair" tax type is VAT for humans. Buying a SUV -> You pay 10,000 USD in taxes. Buying bread -> You pay 0.01 USD in taxes. We could get rid off income tax at all and just increase the VAT to ~20 - 50% depending on the type of the product. This way it is almost impossible to cheat. Solving taxation for corporations still an issue though.

For what it's worth, it's hard to see a Land Value Tax as being unfair, it's extremely hard to hide your taxable assets, and it works well for people as well as corporations.

Land Value tax can be extremely cruel if you happen to be poor living in a neighborhood that suddenly became popular. You are basically forced to sell your home (also not in the best of positions - you need to sell fast and can't wait out for the peak price) and move out because you can not afford to live next to some rich person. While income tax and VAT are proportional to what you earn and consume, and can vary easily with income/consumption level, changing housing is much harder, and can put people in very bad situations through no fault of their own.

Re: Panama Papers: Mossack Fonseca leak reveals elite's tax havens

#440

Post by smsm42 » Tue, Apr 05, 2016, 5:19 AM UTC

pron wrote: post #438

smsm42 wrote: post #435

Earlier quoted context omitted.

I don't think it is true. Large corp can afford their own security force and infrastructure (and if you study the history of colonial corporate conquests, that's exactly what they have been doing). Small business or average consumer can afford none of this. Big corp can build their own protected bubble amid a desolated and decaying country, but if you are outside the bubble, you are in trouble.

A villa in the jungle is not what I was talking about. Large corporations benefit from their customers being safe and secure, and from infrastructure to distribute their products. And the companies involved in "colonial corporate conquests" were huge, royally chartered monopolies, directly supported by their countries, and usually acting as their official representative; there was a symbiotic relationship between the…

>> Large corporations benefit from their customers being safe and secure

Same way as the small ones do. Maybe even more so - you can find a market for luxury cars even in most brutal dictatorships (in fact, many brutal dictators are known for their love of luxury goods, and so are their henchmen as soon as they are wealthy enough) but trying to establish a small business with stable clientele might be quite hard.

>> there was a symbiotic relationship between the monopoly and the state, quite the opposite from an independent existence.

If you look at the relationship between big banks or insurance companies or resource companies, and governments, "symbiotic relationship" is not a bad description of what is still happening. What is good for GM is still good for the country, and the country spending billions to fix the screwups of GM management is a living proof of it.

>> while fruit stands are set up everywhere.

Fruit stands - yes. Startups - not so much.