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Facebook tax court trial begins over Ireland offshore deal

reuters.com

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Re: Facebook tax court trial begins over Ireland offshore deal

#21

Post by seibelj »

coral-snake wrote: post #16
seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

How would you avoid companies-as-expense accounts? If I form "Coral-Snake & Co.", wouldn't I be able to pay 0% taxes by just directing all income/expenses into that shell? (Granted, I don't understand basically anything about tax law, so maybe this is already a well-defined problem with a well-defined solution.)

This is already doable with a multitude of ways. If I have profits, and I direct them to a business, then argue plausibly that my life expenses (lunches, travel, cars, computers) are for my business, I can write off all those expenses against my profits. Business owners do this all the time.

Re: Facebook tax court trial begins over Ireland offshore deal

#22

Post by keanzu »

ThrowAway14592 wrote: post #2

Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.

There's no way to know for sure. If it was clearly illegal and Facebook's lawyers thought they were going to lose they'd settle with the IRS. If it clearly wasn't illegal the IRS wouldn't pursue the case. The courts are needed in the fuzzy area to interpret the law and answer the question - was it actually illegal?

Other alternatives: If, for example, the IRS has been pressed into the case by public or political pressure they may pursue an unwinnable legal case to win in the court of public opinion or to give other corporations with fewer legal resources than Facebook pause before they engage in similar.

Re: Facebook tax court trial begins over Ireland offshore deal

#23

Post by asdfasgasdgasdg »

coral-snake wrote: post #16
seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

How would you avoid companies-as-expense accounts? If I form "Coral-Snake & Co.", wouldn't I be able to pay 0% taxes by just directing all income/expenses into that shell? (Granted, I don't understand basically anything about tax law, so maybe this is already a well-defined problem with a well-defined solution.)

By making it illegal. People already do that and when they get caught they sometimes go to jail or otherwise pay severe penalties. Also a company with no profits already pays no taxes so to the extent you wanted to roll the dice this way you could do it just as well under current law.

Re: Facebook tax court trial begins over Ireland offshore deal

#24

Post by jdkee »

BurningFrog wrote: post #17
seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

You can make a good argument* that taxing corporations is weird anyway, since they're abstract legal concepts. Taxing the income real people get paid from the corporation would be the logical, and much simpler system. * You can of course also make a decent argument against this :)

Corporations have similar legal rights to corporeal persons. Freedom of speech, access to the legal system, etc. As a result of having similar rights, they should be taxed as corporeal persons. It is not rocket science to conclude that corporations in the U.S. should be taxed at the same effective tax rate as real persons.

Re: Facebook tax court trial begins over Ireland offshore deal

#25

Post by seibelj »

TaylorAlexander wrote: post #20
seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

Wouldn’t business still lobby for tax reductions in other areas? I feel like your argument that setting the corporate tax rate to zero would eliminate the incentive to influence the government ignores the many other reasons to do so.

They would lobby for regulations but this would eliminate a huge amount of economy-warping tax carve outs and prevent a lot of crony capitalist donations to politicians.

Re: Facebook tax court trial begins over Ireland offshore deal

#26

Post by TheSpiceIsLife »

Marsymars wrote: post #14
ThrowAway14592 wrote: post #2

Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.

I think that if there’s no legitimate business purpose to a particular business activity other than avoiding taxes, it qualifies as tax evasion. If that’s not illegal in your particular jurisdiction, that just means you have legalized tax evasion.

I understand what you’re trying to say here.

And there’s an argument to be made in the other direction too: everyone should be doing everything they legally can, and where it makes financial sense to exert the effort, to avoid paying any more tax than they have to...

because giving money and power to politicians is like giving whisky and car keys to teenage boys.

Re: Facebook tax court trial begins over Ireland offshore deal

#27

Post by coral-snake »

seibelj wrote: post #21
coral-snake wrote: post #16

Earlier quoted context omitted.

How would you avoid companies-as-expense accounts? If I form "Coral-Snake & Co.", wouldn't I be able to pay 0% taxes by just directing all income/expenses into that shell? (Granted, I don't understand basically anything about tax law, so maybe this is already a well-defined problem with a well-defined solution.)

This is already doable with a multitude of ways. If I have profits, and I direct them to a business, then argue plausibly that my life expenses (lunches, travel, cars, computers) are for my business, I can write off all those expenses against my profits. Business owners do this all the time.

Wouldn't a 0% corporate tax make it even more incentivized than it is today?

As a novice, this feels like an approach that punishes the well-off, who may not expend the resources to structure all assets/liabilities this way, at the expense of the super-well-off who will simply pay multiple other people to re-organize their own financials.

Re: Facebook tax court trial begins over Ireland offshore deal

#28

Post by wolco »

BurningFrog wrote: post #17
seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

You can make a good argument* that taxing corporations is weird anyway, since they're abstract legal concepts. Taxing the income real people get paid from the corporation would be the logical, and much simpler system. * You can of course also make a decent argument against this :)

Then you get companies leasing jets, houses, etc for employees uses instead of pay.

Re: Facebook tax court trial begins over Ireland offshore deal

#29

Post by paulddraper »

ThrowAway14592 wrote: post #2

Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.

> Is this actually illegal though?

At the risk of sounding reductive, that is exactly why it is in court: to figure out if it was illegal.

Re: Facebook tax court trial begins over Ireland offshore deal

#30

Post by m_eiman »

seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

There should also be no speed limits, since some people drive too fast anyway. And murder should also be legal, since some people murder anyway. Let’s just remove all laws, since they’ve all been broken at some time.
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