The public has a right to know how companies that pay no taxes pull it off • Hacker News Board

Re: The public has a right to know how companies that pay no taxes pull it off

#251

Post by Mumps » Tue, Nov 03, 2020, 1:29 PM UTC

gnicholas wrote: post #32

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created/updated. When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our ser…

This has been on my mind for quite a while: is there a way to set up saving structures like those of Big Corp to poor people - i.e. find a way for the people least able to pay tax to pay less of it.

Would you mind chatting about your expertise here? Do you think there is any feasible way of generalizing these tax avoidance structures so that Joe and Jane can reap some of those sweet sweet loophole benefits as well?

Re: The public has a right to know how companies that pay no taxes pull it off

#252

Post by Icedcool » Tue, Nov 03, 2020, 1:29 PM UTC

adeptus wrote: post #247

I am still confused as to why companies have to pay tax at all? If every single employee including owners already pay income tax, and IVA/GST/purchase taxes, property taxes, xyz additional personal taxes levied by respective governments, why then on top of all that make companies pay tax, doesn't that just detract from people wanting to start companies and/or seek countries with the least taxes/best loopholes? Discla…

Because they act as a stand alone entity, and they may make and keep profit that doesn’t get dispersed to the employees.

Re: The public has a right to know how companies that pay no taxes pull it off

#253

Post by 0goel0 » Tue, Nov 03, 2020, 1:29 PM UTC

adeptus wrote: post #247

I am still confused as to why companies have to pay tax at all? If every single employee including owners already pay income tax, and IVA/GST/purchase taxes, property taxes, xyz additional personal taxes levied by respective governments, why then on top of all that make companies pay tax, doesn't that just detract from people wanting to start companies and/or seek countries with the least taxes/best loopholes? Discla…

Empirically, no it does not.

It causes companies to seek loopholes, yes. They'll incorporate in Ireland for example, but they'll continue to operate wherever they need to.

Re: The public has a right to know how companies that pay no taxes pull it off

#254

Post by exabrial » Tue, Nov 03, 2020, 1:30 PM UTC

The problem isn't "who's not paying taxes", the problem is "taxes". In the USA we pay extraordinary taxes for extraordinarily small returns. If the US government was on charity navigator, it would have a no-star rating.

This money is best left to the distributed wisdom of thousands of companies in millions of individuals who will look after every dollar and see to it's use rather than waste.

When I see headlines like this I'm not upset by them I'm sort of thankful they are not fueling reckless spending.

Re: The public has a right to know how companies that pay no taxes pull it off

#255

Post by Zenbit_UX » Tue, Nov 03, 2020, 1:31 PM UTC

srtjstjsj wrote: post #216

hackeraccount wrote: post #181

Earlier quoted context omitted.

This is why I've always been skeptical of high _income_ tax rates. First tax avoidance is at base a fixed cost. It's the price of a really tax lawyer (or at the extreme a couple of US Senators). If that fixed price is less then your tax bill only idiot pays the tax bill. The second reason is that I don't believe people view money fractionally - I think they look at it absolutely. For me am million dollars is a lot of…

Look at Bill Gates's house to see how obvious false that thesis is.

Na, you're both wrong, GP for assuming he knows how a billionaire views a million dollars and you for your weak rebuttal that his home proves he doesn't value money.

You both need to stop speculating about Bill Gates.

Re: The public has a right to know how companies that pay no taxes pull it off

#256

Post by api » Tue, Nov 03, 2020, 1:31 PM UTC

gnicholas wrote: post #32

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created/updated. When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our ser…

In practice this amounts to a regressive tax system.

Re: The public has a right to know how companies that pay no taxes pull it off

#257

Post by buzzy_hacker » Tue, Nov 03, 2020, 1:32 PM UTC

sneak wrote: post #164

etripe wrote: post #153

Earlier quoted context omitted.

They are taxed because they are beneficiaries of society's investment in infrastructure and people. They benefit directly from a healthy, educated population, enforcement of construction codes, the operation of the legal system, roads and waterways, etc. Companies aren't entirely benign, either, so part of those taxes goes to environmental impact assessment and handling they don't pay for, such as pollution, health h…

A corporation is an abstraction that does not exist, so it cannot benefit from those things you listed. The human shareholders and human staff benefit (and profit) from those things, and there are already mechanisms in place to tax those human beings, either as shareholders or as staff with ordinary income.

Abstraction != does not exist

Re: The public has a right to know how companies that pay no taxes pull it off

#258

Post by sokoloff » Tue, Nov 03, 2020, 1:32 PM UTC

pa7x1 wrote: post #234

srtjstjsj wrote: post #217

Earlier quoted context omitted.

Sales tax is extreme regressive, more than UBI can handle. Unless you are proposing a 50% sales tax and a progressive UBI?

Sales tax would be the only conventional tax in the scheme proposed. So it would need to be as high as needed to fit the public government spending. In some EU countries that would be above 50%, in the US may be roughly 40%. That may seem like a lot but averaged it would be the same than the average tax payer paid before, except more evenly distributed so likely median tax payer would be benefited. UBI by itself is p…

I admire the proposed simplicity (and agree that setting the levels can largely mitigate any concerns of regressive nature [especially as compared to today]).

My concern under a sales-tax only system is that politicians also like to be seen as aiding employment and a sales-tax only system does not seem as supportive of employment as today's system where employment expenses are offset in part by their tax deductibility. No one goes out and employs someone for $100 to save $20 on taxes (still -$80), but I still employ more people when it costs me $80 than when it costs me $100 to do so. In that regard a VAT is superior to a straight sales-tax.

Re: The public has a right to know how companies that pay no taxes pull it off

#259

Post by tappio » Tue, Nov 03, 2020, 1:34 PM UTC

gnicholas wrote: post #32

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created/updated. When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our ser…

Economies or scale... How about just power? These companies have too many people in their pocket. When you have enough power you can get away with this. These companies, even if not paying taxes directly, are huge contributors of economy. You threaten them, and they threaten you back. Do you want them to take their 10,000 jobs somewhere else? It's not tax laws and enforcing them, just rather just too much power on too few people's hands.

Re: The public has a right to know how companies that pay no taxes pull it off

#260

Post by realityking » Tue, Nov 03, 2020, 1:34 PM UTC

adeptus wrote: post #247

I am still confused as to why companies have to pay tax at all? If every single employee including owners already pay income tax, and IVA/GST/purchase taxes, property taxes, xyz additional personal taxes levied by respective governments, why then on top of all that make companies pay tax, doesn't that just detract from people wanting to start companies and/or seek countries with the least taxes/best loopholes? Discla…

Take the case of me, a German citizen living in Germany, owning Apple stock. The German government taxes me on the capital gains - fair enough.

But with your model the US government and the government of California would receive no taxes beyond those owed by the employees.