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

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

#371

Post by robertlagrant »

sneak wrote: post #336
throw_m239339 wrote: post #186

Earlier quoted context omitted.

Corporations can be criminally charged. They are not abstractions, they are associations of people. You need to rethink your arbitrary definition of "abstraction".

> Corporations can be criminally charged. Are you sure about that? Corporations cannot act (they have no hands, and no brains), and thus they cannot break the law. It also is relatively difficult to throw a corporation in jail for a criminal violation. Even a much more informal association of people, a "criminal conspiracy", cannot be criminally charged as a single abstracted entity: the individuals who performed tha…

I didn't kill 'im, m'lud! The murder did!

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

#372

Post by TheKarateKid »

jimmydddd wrote: post #294
harry8 wrote: post #109

Earlier quoted context omitted.

>this is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot. Nope, these are the reasons that cause the situation. This outcome does /not/ make sense nobody sane without a huge vested interest would design a system to achieve less tax paid when you earn more. It's entirely contrary to the intent and spirit of the tax code. This is not sensible. How to fix it? Tha…

It seems like the comment (from a former tax advisor) you are responding to is explaining that the high cost of gaming the system is cost effective for large companies, but not for individuals. In that respect, it "makes sense" that individuals cannot take advantage of these loopholes that companies use. In contrast, you seem to be arguing a different point--that, to you, it "doesn't make sense" that the system is de…

I don't think so. I interpreted the comment the same way probably because the comment was replying to one disputing the morality of it, not the feasibility of it.

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

#373

Post by 908B64B197 »

ipython wrote: post #293
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…

It gets very complicated at the high levels of tax compliance. I am part of a company who had paid a specialized company to set up a tax advantaged structure in a foreign country several years ago in order to avoid capital gains tax. The tax treaty document between the US and this country was over 100 pages long. When it came time to actually take the tax advantages on a return, we decided to figure out what the risk…

> Ultimately the “laws” are less like a set of rules and more a set of malleable guidelines. People who say, “oh I can just take whatever loopholes I’ve been given” don’t understand the sheer complexity and ambiguity of the tax code.

I wonder if it's laziness or by design.

> While I’m disappointed that we “lost” that money (one could argue it wasn’t ours to begin with), and disappointed that others are morally flexible enough or big enough to get away with it, I am left with the feeling that we did the right thing for the country as a whole. I am sad that more companies and individuals don’t consider that in their moral calculation.

That's the thing: Moral should never come into play. If it does, that means the law wasn't written properly.

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

#375

Post by asdfadsfgfdda »

lm28469 wrote: post #292
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…

> I am still confused as to why companies have to pay tax at all? Because that's how we decided to build our societies. Money flows up very easily but doesn't flow down anywhere as fast, that's why we tax companies and people. The sole purpose of a company is to make as much money as possible. Laws are there to make sure they do it safely (ie. don't send 12 years old kids to the mine, don't make employees work 7 days…

How's this for an argument against corporate taxation: Corporations receive money from customers, and distribute to employees (salaries) and investors. It's just simple arithmetic. How does a tax on corporations impact these three stakeholders? It seems unlikely the burden falls entirely on investors. So should we burden these customers and employees with taxes? If the real goal is to tax the rich, why not tax investors? Also, corporations have shown they are most capable of avoiding taxation. How efficient is a tax on corporations when they can easily hire an army of tax lawyers and accountants? Would the world be a better place if those tax lawyers were doing something more productive?

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

#376

Post by stjohnswarts »

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…

Do you have any input as to how they can be prevented from beating the system or do you think there will always be enough loop holes for them to get out of paying taxes because they essentially own the law makers?

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

#377

Post by stjohnswarts »

harry8 wrote: post #109
gnicholas wrote: post #32

Earlier quoted context omitted.

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 is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot. Nope, these are the reasons that cause the situation. This outcome does /not/ make sense nobody sane without a huge vested interest would design a system to achieve less tax paid when you earn more. It's entirely contrary to the intent and spirit of the tax code. This is not sensible. How to fix it? Tha…

I don't think they were trying to stand up for it, just explaining how it happens. Which we all suspected (if you are paying attention at all) but did it from the point of view of someone who actually was "there". I found it quite interesting.

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

#378

Post by P_I_Staker »

ipython wrote: post #293
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…

It gets very complicated at the high levels of tax compliance. I am part of a company who had paid a specialized company to set up a tax advantaged structure in a foreign country several years ago in order to avoid capital gains tax. The tax treaty document between the US and this country was over 100 pages long. When it came time to actually take the tax advantages on a return, we decided to figure out what the risk…

It's funny how that works as companies scale up. A relative owns a small business and needed to get rid of an employee. She wound up laying her off, and taking the insurance hit. She wasn't the best employee and there probably could have been an argument for causal firing, "I'm not going to just lie" is what she said.

Many larger orgs would just try to go for a causal firing, so they can block the employee from receiving unemployment. It doesn't even matter if they're an otherwise decent employee. We'll save money so lets just lie, basically. It's pretty crushing to the individual, and IMO this practice should be abolished.

This is totally anecdotal and plenty of small to medium businesses act shady, but it's interesting that things tend to get even shadier (lawful evil) as things scale up. Yet there's less at stake for the individual employees and more ability to "not be evil", without closing up shop.

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

#379

Post by stjohnswarts »

cywick wrote: post #353
rapht wrote: post #126

Earlier quoted context omitted.

Tax loopholes (and tax lawyers) exist only because there is sufficient complexity in the tax system/tax code. This is because the tax system actually has 2 conflicting uses: (i) collect revenue for the gov't and (ii) create incentives/disincentives that are meant to push taxpayers in ways that are deemed beneficial, be it to the economy or to certain policy like environment, housing, etc. If you drop (ii) you can end…

> Tax loopholes (and tax lawyers) exist only because there is sufficient complexity in the tax system/tax code. I don't think this is entirely correct. Even if there were no deductions and no other complexities, and the corporate income tax was simply based on "all revenue minus all costs", a company could still reduce or even eliminate its tax burden entirely by simply paying IP licensing costs to a different compan…

Tax any money going to these havens at a similar rate, don't allow it to be a tax deduction if the money is leaving the country.

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

#380

Post by stjohnswarts »

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…

Why in the world do you think a company shouldn't pay for taxes on profit? If that were true everyone would just incorporate and no one would have to pay taxes.
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