The lawyers who work at all of these firms who make large-scale international corporate tax avoidance possible should be ashamed of themselves. They are stealing from their fellow citizens. When big fraud scandals occur (Enron, Wirecard) the accountants and auditors are rightfully shamed by their industry. When we find out who paid $0 in corporate income tax the lawyers who made it happen and defended it seem to esca…
Yeah, but stealing how much?
Almost everyone I know or read about who runs a small business or is self-employed talks with their accountant about how run things in a "tax efficient" way, to pay the minimum tax within the rules while keeping reasonable about it.
It would be foolish not to. You have to keep competitive.
And the rules are, for the most part, based on fair and sensible principles. Things like if you paid for something to use in your trade, it's fair to subtract that from what someone paid you, so the different is your profit on which tax is based.
Scale that up to large international corporations, and it turns out "minimum tax within the rules" is often $0 in a particular country, often because your profit there is also $0.
Just because you can structure a complex business of many parts in such a way that those initially fair and sensible tax principles work out that way.
The tax rules don't specify a larger, correct amount of tax.
So the lawyers, should they be ashamed for advising their clients how to run a large company tax efficiently?
Assuming yes, because that's the premise being replied to here, what should they be advising their clients to do instead? A voluntary tax overpayment? Structure the business another way? Guess? Copy other companies?
Is "shame" really the right way to control what advice lawyers and accountants give to large companies?
It seems to me that "shaming" by itself quickly leads to a lot of uncertainty and unfairness, because nobody can tell what the correct advice or correct tax payments "ought" to be on shame alone.
You'll end up with different companies who do exactly the same thing paying wildly different amounts based, essentially, on what they voluntary decide to do for PR or emotional reasons. That has the potential to be quite unfair.
It would be highly unprofessional for a lawyer or accountant to give advice based on their personal emotional state, and nebulous targets which nobody has agreed on and different people reach very different views on. So the right thing to do for an ethical professional lawyer or accountant is to resist that pressure, and try to give the most unbiased, knowledgable and reliable advice instead, based on the rules as they are set out, which everyone is supposed to adhere to.
That's why I'm inclined more towards ideas like the "General Anti-Avoidance Rule" https://en.wikipedia.org/wiki/Tax_avoidance#General_anti-avo... which gives companies and their advisors a framework for deciding the correct amounts to pay, with a stick if they don't.
Public shaming and campaigning is useful, but the end goal of that is ideally to apply political pressure to improve the rules in a "level playing field" way, so that proper application of them results in proper taxation. Many attempts at closing tax loopholes tend to make the tax code more complex, which requires yet more rules to close yet more new loopholes. Those rules are very "gameable".
But general anti-avoidance rules don't have to have this problem, if they are constructed with suitable generality and defer hair-splitting details to fair justice principles rather than ever-finer rules. Getting this right is still difficult, and still a work in progress. It's very contextual too, as the difference between structuring a business to avoid tax and structuring a business because that's how you conduct business is as much about culture and common practice as anything, and these change over time even while the general rule stays the same. But it seems like a better general approach to me.