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Comment by joshdance | Hacker News Reader

Economists have something to say about the effects of taxes, and it usually isn't 'work harder to make money' - http://www.economics21.org/commentary/tax-increases-and-beha...

I have two friends from Ireland who work at a tech company who recently opened an office there. They love the work and say that it is easy for them and their friends to get jobs because of all the companies coming there. My company is thinking about opening a European office, and Ireland is under consideration. This move might slow or stop companies from coming to Ireland.

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The companies in question are only there because the Irish government effectively legalised a form of tax evasion. These companies are not paying their fair dues, and their employees are also indirectly profiting from it. Can't say I feel sorry for your friends - their free ride is over and they'll have to join the global job market on a more equal footing with the rest of us who pay our fair share of taxes.

The is no such thing as _legalized_ tax evasion, nor fair share. There is compliance with tax laws or noncompliance.

There's the grey area where companies are exploiting tax schemes in unusual ways and the tax authorities have not yet declared whether those complex schemes are legal or not.

Immensely wealthy multinational corporations have a lot of money to spend on lawyers and accountants, so while these companies are probably not evading tax the avoidance schemes they come up with are sometimes not legal requiring them to repay.

Don't forget that tax is part of law and so there is what's written and how that's interpreted by the courts. Until you've had case law there are areas of uncertainty.

Of course there's such a thing as a fair share - what society thinks you and others in y9ur situation should pay to take part.

It's not a hard number but perceptions of fairness are certainly important in how democratic countries formulate tax law.

Certainly in the UK there's a big difference in public perception between different levels of tax avoidance. Someone who reduces their tax burden to about 30% - fair enough. The same person who reduces their tax burden to 1%? They're taking the piss.

http://en.m.wikipedia.org/wiki/Taking_the_piss (first sentence: unreasonable).

There is no such thing as society. There are individuals who have views which may or may not be properly or partially informed. So whose view shall we take on fairness? Whatever let's stop talking about 'what society thinks'.

OK, let's redefine 'society thinks' as - "The prevailing opinion of the voting public in a democratic nation, whom the nation is allegedly run by and for."

Perhaps you'd prefer to use the term 'electorate'.

Regardless, the meaning was clear and your objection rather ridiculous.

At a global scale there is no concept of "fair dues" that will ever get global acceptance. "Fair" in this context is an emotionally loaded term designed to create an adversarial reaction in the populace, an "us vs. them." The politicians who use it are manipulating, not informing.

At a global scale, there is only law. If countries want more taxes, they have to change their laws, and be prepared to deal with the unintended consequences of those changes.

Do you also feel that nearly all YC and other SV companies, by registering as Delaware S Corps despite really being based in Cali, are not paying their fair share of California state corporate taxes?

Fairness is subjective. As such, it is not very meaningful to discuss "our fair share of taxes." Ideal communists will substitute "100% of profit" while ideal anarchists will substitute "0% of anything".

Most businesses prioritize their own market value, and subordinate all other motives, including apparent political posture, towards maximizing that one metric. Therefore, they only pay taxes to avoid the negative effects of not paying taxes, rather than out of any perceived moral obligations.

The companies are there because the optimization process that involves jurisdiction shopping determined that establishing a business presence in Ireland provided greater benefits than the other options. There can be only one "best" jurisdiction for any given business entity. Complaining that someone else's seems to be better for more entities than yours is just sour grapes.

If you can't compete on a tax cost basis, there are other ways to attract business: a zero-corruption bureaucracy, privacy or secrecy for principals, reduced reporting requirements, reduced time from initial filing to practice, ironclad and proactive intellectual property protections, strong infrastructure, rock-solid stable units of accounting, or any of dozens of other points that may provide business value that more than compensates for the tax burden.

So fairness is a red herring. It is the objective value that is provided in proportion to the taxes taken that determines whether taxes are "too high" for a business to bear.

Noone is opposing tax breaks that countries give to companies incorporated in that country... as long as the tax breaks only apply to the country in question! However, if Google can pay lower tax on profits generated in the UK/France/rest of EU, by virtue of it being an Irish company, that's tax avoidance, plain and simple.

> that's tax avoidance, plain and simple.

What's wrong with that?

Everybody wants the benefits that tax money gives society, but nobody wants to pay for it.

Companies don't exist in a vacuum, as evident in that very few companies prefer to put their offices in the middle of the sea or deep the jungle. They benefit greatly from infrastructure of our society, and it's fair that they should pay their share to build and maintain it.

>"Everybody wants the benefits that tax money gives society, but nobody wants to pay for it."

There are a lot of people who think that much (if not most) tax dollars go to waste, so they do not want to pay because they think that taxes are funding harms to their fellow citizens and foreigners. I am one of those people, and I do not want to be responsible for hurting my fellow man.

But you use the roads we pay for, if your house catches fire, our money goes to the firefighters who try to save it.

I wonder if you would be so principled if it cost you money rather than saved you money.

If I take your money, then give you something which you must use, or would have to pay for a second time if you did not, your use of this item or service is no endorsement of my action.

I use the roads which I (and all my fellow citizens) are forced to pay for, at least partly because the government has crowded out all the alternatives. With respect to firefighters, I would be very happy to return to the system where the insurance company provided fire-fighting services, as was the case before the government took over the industry.

I have often made the case against policies that greatly benefit me (financially and otherwise), but at an unacceptable cost to others, and I am sure that I am not alone in having done so.

You make a very fair argument. The real question is, how do we decide what is fair for each of us to pay?

Companies playing legal games around taxes is exactly the behavior that the complicated tax code incentivizes. Play games, get money. Are corporations not supposed to play? It's parallel to programming productivity measurements. If a company starts counting LOC and rewarding it, they are going to get precisely what they asked for: More lines of code.

Can we stop these generalizations? Elsewhere in these comments we have a 'society that thinks'. Now we have the views of 'everybody'. Thanks but no.

If you have any tips on how I can avoid paying taxes, please share them. Is tax avoidance supposed to be wrong? Should I feel guilty about my own personal tax avoidance?

the dutch sandwich is, afaict, still possible.

Wrong is a subjective value, but yes, most people feel that it's wrong.

http://en.wikipedia.org/wiki/Double_Irish_arrangement

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