If I make $100k in one year and then $10k the next, I pay 19% of it in income taxes, even though I averaged $55k/year which should mean paying 14.6% of it in taxes.
(Using figures for a single filer from the 2019 brackets; assuming away the person deduction for simplicity.) https://www.nerdwallet.com/blog/taxes/federal-income-tax-bra...
Humans all have basically the same expense structure so taxing revenue makes sense. Corporations from different industries have wildly different expense structures so taxing on revenue would be nonsensical: you would end up undertaxing high profit industries like tech or pharma and massively overtaxing low profit industries like retail.
401K was not the idea of some smart legislator. The 401K name comes from a section of the IRS code. This section was added in 1978 but for 2 years no one paid much attention to it. A creative interpretation of that provision by a smart consultant gave birth to first 401k savings plan. The government tried to repeal the 401K provision twice once it realized the enormous tax loss from the 401K provision.
You might argue that none of those are actually "murder," but in fact legal "killing." I'd agree. I'd counter that a "legal loophole," is the same idea. The operative word is "legal," and "loophole" is tossed on to spark outrage.
There's also an argument to be made, that some of the legal killings I've described are morally wrong. That's a subject of much debate. You're welcome to hold yourself to a higher standard than the law requires, or to lobby to change the law, but we have laws so that people are not subject to the individual morality of everyone, but on the consensus we come to as a nation.
how is a company supposed to determine the morally correct amount of taxes?
if they hire incompetent accountants who pay excess taxes, are they more moral?
Second, what's your specific issue with the debt carryover exemption?
You seem like you are privy to some inside information. What legal loophole did Netflix got their high-priced lawyers to exploit?
>I can murder someone and get away with it that wouldn't make it OK to actually do it.
Because murder is the same as following the tax code to the letter.
>The same applies to tax avoidance. It might be legal but it's still wrong.
Again, what are we talking about here? Why did Netflix owe no taxes this year. I would think that would be the first step before determining the morality their actions.
Why? I'd argue that the US federal government is mostly immoral, and thus paying taxes is wrong. I only do it because I'm coerced into acting immorally from the threat of violence.
Comparing an action like murder, which is overwhelmingly believed to be immoral by religions and philosophers for millennia, to not overpaying US federal taxes is just silly.
But what is the moral tax rate for a corporation, if not 0%? Is it 18.25%, as opposed to 7.09%? There's no objective answer, and it fluctuates from region to region, year to year, depending on how much governments can extract before corporations flee.
You are implicitly incorporating the morality of supporting an unspecified government into business behavior.
If you believe that, on balance, expenditures by the US government of tax-derived revenues produces more harm in the world than good, you would therefore consider it a moral virtue to legally and lawfully minimize the amount of taxes delivered to the IRS. If you believe that expenditures by the US government of tax-derived revenues do more good than otherwise, then you would consider tax avoidance to be morally wrong. But then you also have to consider whether a corporation has a greater moral obligation to maximize value for its shareholders, or to pursue a specific purpose as stated in its charter. In either case, the corporation should seek to retain as much control over the disposition of its revenues as is possible.
In your "legal murder" hypothetical, I would consider it both moral and ironic to murder the person responsible for creating the legal murder loophole, along with any other person that has ever used it. I might still refrain, as that means I would be losing some of my morality-based protections against being murdered, with the knowledge that my legal protections are already nonexistent in loophole-compliant circumstances.
But I am a natural intelligence with moral agency. A corporation is an artificial intelligence, programmed by bug-ridden legal documents, and its program executed by its lawyers and C-level principals. It isn't a paperclip optimizer, but it is a banknote optimizer. It has no moral values that humans can readily recognize. It isn't a psychopath or sociopath; it's just alien. In order for a corporation to exhibit moral behavior, the morality has to be included in its programming. That's difficult. It is much easier to incorporate by reference the entire body of public law, and then allow the corporation to pursue "any lawful purpose". And tax avoidance, aside from moral considerations, is still "lawful".
Let me ask you a question; have you ever deducted anything from your taxes? If so, you are “guilty” of tax avoidance. Every person claiming the Earned Income Tax Credit is engaged in tax avoidance. Anyone that ever deducted anything is a tax avoider.
Conversely, tax law operates under a general regime where the expected and encouraged behavior of firms is to do their best to avoid paying taxes. In fact, maximizing share-holder value is even legally required (if blatantly ignored the firm is open to lawsuit).
More generally, analogy is an attempt to model one unknown phenomena, by claiming it is actually just a subset in the core abstract moral dimensions as another obvious and solved phenomena. While making comparisons isn't always bad, In practice it frequently seems to obfuscate or wash away really critical idiosyncratic differences (e.g. what I alluded to above) and as a result over-simplifies often complex topics.
The original point was really just 'legality is not the same thing as morality,' which is fine, I think most people agree with that. The question is how and does that concept apply in this given case, and I think to address that question properly requires engaging with the specific details.
Loopholes do exist for murder: for instance, self defense. The Trayvon Martin case is an example of this. The loophole exists for valid reasons, but it's often taken advantage of to circumvent the spirit of the law.
> In fact, concepts such as the intended meaning of the law mean that even if you hacked some edge case in the written law, you'd still go to jail.
Can you provide evidence that this applies only to murder and not to tax evasion?
> Conversely, tax law operates under a general regime where the expected and encouraged behavior of firms is to do their best to avoid paying taxes.
I'll agree it's expected, but I think you'd have a hard time finding a politician or member of the working class who would say firms are encouraged to avoid paying taxes.
I agree that it's not a perfect analogy, but I don't think it's fair to dismiss it entirely.
Clearly the majority think murder is wrong and if you could avoid the consequences of committing murder by way of spending money that would probably also be considered wrong. Murder loop holes would be closed up pretty quick I hope.
The same applies to tax avoidance. It might be legal but it's still wrong.