Ordinary people can't do this because they missed the window, but also because their labor has a clear nexus. This scheme worked because when a product is designed in one locale, built in another, and sold in a third, there's some reasonable question of what the nexus of the income is.

Ordinary people that have written books or songs or otherwise earn royalties from creative works on a regular basis could probably have arranged for ownership of their royalties to be owned by a complex corporate structure as well, but I don't know that very many ordinary people earn enough in royalties that tax avoidance is worth the setup and maintenance costs.

I mean, the clear way to deal with this is to make them choose, and allow import tariffs. Get taxed where the nexus is, and pay to bring the value to other jurisdictions.

I understand that the web of various tax laws and trade agreements makes this impossible though. 80 years of cruft is too much to sift through to improve things in one fell swoop I suppose.

> the clear way to deal with this is to make them choose

My understanding is that the whole problem stems from companies being able to choose. Apple chose to pay taxes in Ireland for some things, because Ireland gave them a tax advantage, thus avoiding taxes in other European countries.

Allowing import tariffs between EU countries would maybe help with this but cause other problems. The EU free market isn't a whim, it has good reasons to exist and significant benefits.

There is no "clear way" to fix this. If there was, it would be used already.

> There is no "clear way" to fix this. If there was, it would be used already.

What do you mean by "this"? When I said "this", I meant this specific form of tax avoidance. There is a clear way to fix it, as I mentioned.

When you say "this" it seems like you mean tax avoidance in general, in which case I would agree that there is no clear way to fix it.

Maybe part of the reason ordinary people are "overtaxed" is that companies are able to do this.

No it’s because an un-elected class of political invents new ways to launder our money over and over. How else does a politician with a small salary end u on millionaire over and over? They do not get book and consulting deals out of the goodness of the public hearts

Well, apart from medicine, irrigation, health, roads, cheese and education, baths and the Circus Maximus, what have the Romans ever done for us?

Great so that’s like .05% off the tax i paid. Whered the rest go

Is there a reason you don't seem to be considering that companies lobby politicians to allow this?

Of course they do. But "lower taxes on ordinary people by defunding corruption" is a very different proposal than "sustain funding for corruption by raising taxes".

Indeed. Once is a great idea for the vast majority who don't benefit. The other eventually leads to gradual collapse or violent revolutions.

The amount of money given by companies to congresspeople to save on taxes is necessarily lower than the amount of money not paid in taxes by doing so. I would be surprised if the return was less than 10x.

The amount of money given by companies to congresspeople to pass corrupt spending programs that enrich the companies is necessarily lower than the amount of money spent on those programs, too. Nobody expects that members of Congress would get all of the money. But they're not meant to be getting any of it, and the fact that they continue to implies that the corruption is ongoing.

@knodi123, what is partisan about fleabagmange's statement? They don't mention any politician, political party, or even political ideology.

More to the point, it isn't the politicians of only one party who are getting rich this way.

It's fine to believe this. But you should be aware it's a partisan political opinion, and it's inflammatory to present it as an objective fact. Is this site really the place for partisan political opinions?

How is it partisan? They mentioned no parties or politicians. What they said applies equally to all politicians regardless of leaning.

Given that 100% tax compliance at the highest rates would not solve any high tax nation’s budget holes

You should be asking the same questions that companies are asking: instead of “why arent we getting hosed equally” its “why are we getting hosed at all”

Improving IRS tax collection enforcement could generate significant funds

In fiscal year 2021 the IRS managed more than $4.1 trillion in tax revenue. The annual tax gap was estimated at $688 billion in 2021, with $625 billion remaining uncollected even after enforcement efforts.

16.7 percent.

So collecting all those extra taxes would cover somewhere south of 25% of the budget deficit for 2021. You aren’t wrong, but the parent isn’t wrong either.

and you don’t realize that this proves my point?

~$5.3 trillion doesn't solve the US’ budget holes, while the US government tells you what transactions to make to not be taxed

That's the amount of taxes that companies/people legally owe but don't pay (and are collectable).

It's not really related to the amount of taxes that are legally avoided by big businesses through techniques like this "double Irish Dutch sandwich."

I’m aware

What is your preferred outcome?

I'm not sure that my preferred outcome is relevant to what the other person meant, but I would like a simpler tax structure and higher-than-current effective rates for wealthy entities.

And most important questions: why is the government so expensive, do we really need all of this, is it efficient? How is the efficiency evaluated?

I really despise some of these anarcho capitalist arguments.

A society that isn't lifted by redistributing wealth through taxes creates nothing but a more inequal and dangerous society for everyone.

We can all argue about inefficiencies, what is the right amount of spending and funding, but redistributing taxes by creating socially needed projects, from roads that you use, to ports through your shipments to policing streets so your daughter is safer when she goes out with friends. The list is so long.

People don't even realize how much wealth and prosperity has been created by redistributing wealth through taxes.

> A society that isn't lifted by redistributing wealth through taxes creates nothing but a more inequal and dangerous society for everyone.

I mean.... the government is taking tax money from the "poor" (so, normal workers, who cannot avoid paying taxes the way the article described, and whatever new way will be used after the changes), and giving them to a few friendly corporations who give back a percentage to politicians and normal peple usually get nothing.

This is again worth debating, but many comments here imply that the best amount of taxes is 0.

I don't think they realize the kind of place they would end up living in.

People would be mich happier if the taxes were 50% less, the waste and corruption would be gone. And services were at similar level. Right now, US health care is redistributing money from poor people to rich.

“Given that 100% tax compliance at the highest rates would not solve any high tax nation’s budget holes“

Can I ask where this claim originated from please?

yeah absolutely, I look at the nation’s debt load - which it does pay interest on from tax revenues - and its increase of debt load alongside actual spending of debt sale proceeds, and compare that to how much it collects in taxes

I use that government’s official sources to do that math

Additionally, in some nations, there are underfunded liabilities, future necessary spending

And it all far eclipses what the nation makes in revenue from taxes, tariffs and productive industries it owns - if any

If there an aspect of accounting that I’m misunderstanding, by all means enlighten me

> I use that government’s official sources to do that math

You mean the source of the claim is you, you personally did the math for all "high tax nations" whatever those are, and you're presenting the claim without any of the math or explaining any qualifier like "high" from "high tax"?

Swell.

I typically look at the US, France, Germany, UK

Capitalism only works if someone gets hosed. And of course as we all know, the only alternative to capitalism is communism which is scary and evil! Don't you see how good you have it under the hose?

Given the nature of the human being, there’s no way to live in a free society without someone being hosed. And even then, capitalism has improved the life conditions of those hosed. Communism removes the freedom for everyone and it is effectively hosing everyone at the same time.

That's not true, Soviet communism generated wealthy elites just like any other dictatorship, they just didn't have formal wealth.

It’s been very tightly intertwined with the position. When you retire, your wealth is gone, and sometimes retirement equals a purge. I wouldn’t call this being among the wealthy elite by any means. Today, you live in the center of Moscow, and tomorrow you’re an ‘enemy of the people’—good luck proving otherwise.

> and sometimes retirement equals a purge

That's just dictatorships man, you gotta keep playing the game well or you end up tortured to death in a salt mine.

That is right. Communism only brings wealth to those high in their political hierarchy.

It can definitely contribute to the feeling of being stretched thin

This seems like a really backward way of thinking. You seem to be advocating for complex tax loopholes to be opened for individuals rather than advocating for simple, but lowered taxes.

It's advocating for equality! how could you call that "backward"?

I understood it more as "the individuals should be taxed the same (so, much lower amount) as corporations".

If company X can pay just <small percent> of their income as taxes (all together), why can't random bobby do the same?

The law requires you to have a fire extinguisher in your office? Sure, buy one, but since it's a cost of doing business, that money comes from the pre-tax pile and is not taxed extra. The law requires me to wear pants when I go out, why do i have to buy them from post-tax pile of money (so, after ~50% gone to the government), and still pay 9.5% VAT on them? I can buy those same black jeans as a company (eg. consider black jeans a work uniform), and avoid all those taxes). Rent? Pre-tax money for a comoany, post-tax for an individual. In some countries (eg. mine, slovenia) you have even bigger stupidities... you have a CO2 tax (and some other) on gasoline (and other fuels), and you pay VAT on top of that tax... the co2 tax included in the base to calculate the VAT... you literally pay taxes on taxes. Again, businesses don't have to pay that VAT (they deduct it) because well.. they need the company car to do business.

The distinction is business vs personal, not company vs individual. A sole trader can usually do avoid income and VAT on all those things (except some deductions pertaining to payroll benefits). Some countries have an alternative arrangement where very small traders pay VAT but also retain VAT on the products they sell rather than actually netting out the VAT on a return.

what's backwards about that? driving to the neighboring town for cheaper gas (because the gas tax happens to be lower) is just as legal as these complex multijurisdiction incongruencies

yes, I believe car ownership should be more accessible to people to be able to ponder such a drive

I personally am.

Because people are often overtaxed due to high tax elusion/avoidance/evasion.

E.g. in Italy, around 10 to 15% taxes are evaded in many ways. That bill is then paid by regular taxpayers.

If even more people avoided taxes that would just make the issue worse.

Frankly I don't even understand why companies are taxed at all. Taxes are proportional to individuals' income so that the pain of contributing to the collective good is distributed fairly. Companies don't feel any pleasure or pain, they need money as a commodity- it pays people, investments, innovation, talent. Money and other benefits should be taxed when they are transferred to individuals, not before.

Ordinary people can buy the stock of the said companies and benefit from the tax saved. Probably they already own them through pension funds.

Which, to me, looks very subpar rather than companies paying taxes in the country where they actually make profit

That's what I call a "let them eat cake" response.

Ordinary people do not buy stock. Most people here are in the highest percentile and it shows.

But ordinary people can buy stock, and should buy index funds at least.

There are plenty of reasons why they do not, but in almost all cases they are not good reasons. There are some extreme exceptions, but then you're outside of "ordinary".

That take feels kinda... Detached from the average person to me? I don't know how to take it, just like when you hear gates saying a banana cost 10$. Common Joe would benefit much more from taxes being actually paid than profits being accumulated by companies just so they can crush the competition more and earn more and (...)

> just like when you hear gates saying a banana cost 10$

When was that?

I've never seen a real video, it may as well be a common saying after being on the internet for a so long time. However, there is a video of gates trying to guess grocery prices on the internet, and he's not that bad. I think at this point it's just an internet meme that exist to reference billionaires being disconnected from reality

> I've never seen a real video, it may as well be a common saying after being on the internet for a so long time.

I mean, I can show you the video: https://www.youtube.com/watch?v=Nl_Qyk9DSUw

But that has nothing to do with Bill Gates or any other person named Gates. (You might be aware that Bill Gates isn't a woman.) It's a joke on a comedy show. It's not something anyone has ever said.

Likely that they conflated it with this video of Bill Gates guessing grocery prices on the Ellen show: https://www.youtube.com/watch?v=ad_higXixRA

I don't know about the majority, but plenty of people have 401Ks (over 34%). It wouldn't be too shocking if 16% more people had stocks.

And presumably some of the 66% are either children/students who have never had a job but will have a 401k or similar when they get one, or retirees who cashed out their 401k and bought an annuity (perhaps not the absolute smartest thing to do, but something a decent number of people do).

You get a 401k from working at McDonalds. Yes ordinary people own stock.

They can't, because companies these days only go public after most of their growth has already been captured by private equity (if at all).

As designed

> I'm not really mad at companies for doing this

I am, regardless of the effect on individuals, it skews the market away from smaller entrants and allows those that have reached enough of a size to be able to afford to play these games to leverage a huge advantage.

As well as killing local competition there's also the pure hypocrisy of firms such as Apple (and they're not the only offender) passing themselves off as some kind of moral authority whist at the same time aggressively refusing to pay taxes towards hospitals and schools in the local markets they operate in.

They can present themselves anyway they like but it does leave a bad taste in the mouth.