Because nothing about taxes has anything to do with morality. In the USA Texas, Nevada, Wyoming and a handful of other states do not levy a state tax on corporations. Are corps in these states less "moral" than companies in California or New Jersey? In 2017 Hungary lowered its corporate tax rate from 19% to 9%. Did Hungarian companies become 52% less moral overnight?

https://tradingeconomics.com/hungary/corporate-tax-rate

“Only a Sith deals in absolutes”.

If businesses operated in a vacuum from politics, then maybe you could have an argument that taxes have “nothing” to do with morality. In the real world, businesses are lobbying for changes to the tax codes to benefit them, holding disingenuous or rigged contests to extract the maximum concessions from tax authorities, relocating or transferring intellectual property and licensing it back to subholdings to min/max gains and losses, and a myriad of other schemes.

To directly answer the questions you posed: Corporations which incorporate in a state like South Dakota or Delaware to take advantage of incorporation policies, with no intention of operating primarily in those states, the majority of their business conducted in a higher tax state like California, and trying to avoid contributing back to the society of the states that they primarily operate in - yes, those corporations are less moral. They are less moral than companies which are incorporated in e.g. South Dakota where the owner lives in South Dakota, and serves primarily South Dakota residents.

Hungary is harder to answer. Did the corporations of Hungary lobby for lower taxes which resulted in that tax decrease? Does the tax decrease adversely impact Hungary as a whole, or was there a budget surplus which allows the state to lower the rate? Does the relaxed rate improve the lives of “normal” Hungarians? The answers to those, and probably more, questions would guide the answer to the question of morality.

Anyway, this is a long winded way of saying that morality is not a binary choice. It’s the perception of right and wrong guided by context.

>> morality is not a binary choice

I'm not the one claiming it is. I've stated that morality and taxes have no connection. Others in this thread, including you, are claiming that paying less taxes = immoral.

>> Corporations which incorporate in a state like South Dakota or Delaware

A grand total of 3 of the Fortune 500 are incorporated in SD or DE. 110 are in NY or CA. It would appear that by your reasoning, the number of immoral companies who "take advantage of incorporation policies" are overwhelmingly outnumbered by companies with such high morals, they selected the highest tax states.

https://www.statista.com/statistics/303696/us-fortune-500-co...

I mean you basically cherry-picked half a sentence and ignored the rest of the argument for morality and taxes having a connection. Also, please don’t confuse “less taxes = immoral” with the actual position of taxes which should be paid, but because of loopholes are not. For example, if we had Herman Cain’s 9-9-9 plan and every corporation, regardless of size, paid its 9% (which is less than the existing 21%) in full, I think few people would claim its immoral.

Looks like your data is paywalled. Is it the same that’s available here? https://hifld-geoplatform.opendata.arcgis.com/datasets/fortu...

Because if so, I think it’s a little bit more complicated. For example, Alphabet’s corporate headquarters is located in Mountain View, but it looks like it is incorporated in Delaware [1].

1: https://abc.xyz/investor/static/pdf/alphabet-certificate-of-...

They certainly didn't choose Delaware for tax avoidance. The rate is 8.7%. Let's bow to the high morals of Sergei & Larry.

https://www.delawarebusinessincorporators.com/pages/delaware...

For posterity:

>Second, Delaware’s tax system gives businesses several ways to legally minimize their tax bills. Companies that are incorporated in Delaware but do business in other states don’t have to pay state corporate income tax to Delaware. Some groups accuse Delaware of being a tax haven because the “Delaware loophole” allows companies to declare certain types of revenue in Delaware rather than in the state where the business actually occurred. Delaware also doesn’t tax profits on royalty payments, trademarks, or copyrights.

https://www.mentalfloss.com/article/76951/why-are-so-many-us...

> If businesses operated in a vacuum from politics, then maybe you could have an argument that taxes have “nothing” to do with morality. In the real world, businesses are lobbying for changes to the tax codes to benefit them, holding disingenuous or rigged contests to extract the maximum concessions from tax authorities, relocating or transferring intellectual property and licensing it back to subholdings to min/max gains and losses, and a myriad of other schemes.

The fact that businesses can shop around, or move to other jurisdictions, or lobby politicians, is a good thing. It is a necessary check on government power.

The alternative would be the government having absolute power to raise taxes. I don't trust the government, especially state and local governments, to handle that well. Many would raise taxes to a level that would strangle businesses and harm the economy.

It is a thing - good or bad is relative.

Is there any evidence to support the claim that state and local governments would raise taxes to a level that harm the economy? I’m sure you could find some examples, but does the evidence support that claim in more than a few outlying cases? There’s ample logical reasoning (The Federalist Papers, for example) that state and local governments are more responsive to their populations and that the federal government should be the culprit that “shoots itself in the foot”. Outliers can exist in the inverse as well, as Kansas showed us that it’s possible to reduce taxes so much that it harms the economy!

Also, and I don’t want to come off as too nitpicky here, but I’m pretty sure governments already have absolute power to raise taxes. That is, a non-government organization cannot levy a compulsory fine on you. And don’t take this as a personal attack, but if people don’t know those sorts of things, they are not a very engaged citizen. Since the government is elected by the people, if we have uninformed and disengaged citizens, we should distrust the government. The best way to gain trust, in my opinion, is to be an engaged and informed citizen (and encourage others to be as well!), and to only elect “the best”.

edit: I may have misinterpreted your “absolute power to raise taxes”. I think now that you meant the power to raise taxes with no regard for its consequences vice meaning that another entity could raise taxes. Sorry if I put words in your mouth. In that case, yes “voting with your feet” can influence tax policy, but there are still other methods of doing that which do not require moving. I also want to point out that there’s an injustice in the ability to move in order to lower tax burdens. For example (and IANAL so someone please correct me if I am wrong), Bob’s LA Auto Shop, LLC can’t pick up and relocate its headquarters to Delaware to take advantage of lower taxes like a multinational corporation can to the Isle of Man. Is it moral that a large MNC can, but a mom and pop shop can’t?

I like how you started your original comment with "Why is this a surprise to anyone?" and just one comment later you look like you're unaware that tax lowering laws are the result of corporate lobbying.

This is hilarious.

Tax authority says "you can take a tax deduction for R&D expenses", so the company increases its R&D expenses and lowers it's tax bill.

Can you explain why that is immoral?

Assuming that the R&D expenses result in benefit for society as a whole, then there's nothing immoral.

What is immoral is when someone decreases their contribution to society (in the form of taxes) through something that either does not benefit society as a whole or which is actually harmful.

In the US, you can deduct mortgage interest from your income.

That clearly benefits the homeowner (lower taxes), while is harmful to society (less tax revenue).

So are people who take the mortgage tax deduction being immoral?

In that case I consider enabling its members to own a home is one of the proper roles of society. So I would argue that is an example of society doing its job (although indirectly).

This is getting off topic, but why is home ownership a benefit to society as a whole?

I would argue it a selective tax break that benefits the homeowner 100%.

No problem. I think this is a useful discussion.

As I see it, it's not so much that a given instance of home ownership benefits society as a whole so much as it is that I see enabling its members to own a home is a core purpose of society. So I guess I could say it as: it benefits society as a whole because if it doesn't exist then, in my opinion, the society is by definition dysfunctional.[1]

When I say that enabling its members to own a home is a core purpose of society, I don't so much mean this from a white picket fence "American dream" perspective or from a home as investment perspective; although I think both of those perspectives have merit.

Rather, I think it's important that an individual has somewhere that they have autonomy, that they can modify as they see fit, that they cannot be arbitrarily evicted from, where they are their own boss, etc.

Without that:

- I think that it would be difficult for an individual to have enough autonomy to really be a full member of society.

- I think it would be difficult to say that an individual really has any stake in a capitalist society if they do not own any capital.[2]

[1] A more obvious example of similar reasoning might be food. The fact that a given person is able to eat isn't necessarily particularly beneficial to society as a whole. However, I think that most people would say that unless the vast majority of people are able to eat, then a society is dysfunctional.

Clearly in this instance there is some benefit to society as a whole from an individual being able to eat; since that allows them to work more efficiently. However, I think you could also say that home ownership provides psychological and practical benefits that allow individuals to work more efficiently.

[2] I realize that strictly speaking a home isn't capital (unless the owner runs a business out of it); however, I still feel that it can provide a "stake in the system" in the way that other property like clothing or even a car do not.

Because they have never raised R&D in the first place, hell, they most likely never did R&D and never will but now they have a so called R&D department. Congratulations, your income taxes sponsore that type of low-hanging fruits frauds.

It immoral for the people who make the rules to accept bribes* to make those rules what they are.

*Call it campaign contributions, or lobbying, or whatever you want. It's paying money to get rules made in your favor, which is bribery.

Ok, so if a company suggested lower tax rates and convinced a politicians to change tax law, but didn’t bribe them at all, then it’s not immoral?