But the argument here is that corporations are not paying their fair share of the taxes. To pay your share of taxes is patriotic. Hence avoiding taxes, while reaping the benefits, is not patriotic. People get angry when poor people abuse welfare, why aren't they annoyed when wealthy companies abuse a countries benefits. We have an educated base of people, a leading technology base, a law structure which favors corporations in many ways, and a secure place to put offices, all of which the government is directly responsible for. (I would have also put, infrastructure but... we don't have that anymore, nor do we have low crime rates, at least in comparison to other modern industrial nations).

We aren't calling Obama patriotic for suggesting or implementing this. We are calling the companies who do this anyway, who pay U.S. taxes when they could avoid them, patriotic, and those who don't, who mainly operate here, who reap the benefits of our country and don't pay their share? Parasites.

But what does it mean to pay one's fair share? What criteria should be used to determine it? Are taxes the only way that one's fair share can be paid? How should we treat outliers on both ends of the spectrum?

We haven't even finished debating questions like these. Yet taxation is needed in some form, so people do the best they can. Unfortunately, that means planning based on the assumptions of specific answers to unsettled questions.

And that's why both Obama (and Democrats, but not in this article) and the Republicans in the article talked about reforming the tax code.

But the more important point was that these corporations are definitely evading the spirit of our current (outdated) laws, and we need to close this loophole sooner rather than later (i.e. after the years it will likely take to fix our tax system).

To draw a programmer analogy, we should refactor the laws, but this is a critical bug fix. We can't stop supporting the old code just because the new code might fix it.

You seem to be describing tax evasion. Tax avoidance is paying your share of tax!

If fair minded legislators tried to write the law such that people in a situation like yours would pay $X and you are paying substantially less than $X, that is arguably "not paying your share". Of course, that characterization is not necessarily the reality.

In the context of what is socially acceptable, tax avoidance and tax evasion are the same thing.

Again, we aren't talking legality here we are talking morality. The result of the discussion on morality is an attempt to change our legal system. To say "well one of those things is legal" is basically a tautological fallacy in a discussion on whether it should be legal, which is what this is.

Socially acceptable to whom? Avoidance is reading the rules written at length by presumably clever people and then acting accordingly to comply with them while minimizing one's tax bill taking all considerations into account. Only a fool would do otherwise.

As quoted "You must pay taxes. But there's no law that says you gotta leave a tip". As to the morality, it's worth considering those of us who try to live within our incomes so we can afford to pay taxes to a government that can't live within its income'.

From a British perspective: http://blogs.telegraph.co.uk/finance/andrewlilico/100024862/...

'Companies-have-a-moral-duty-to-pay-no-more-tax-than-legally-required'.

Tax avodoidance used to be normal tax planning - reducing your tax burden within the law.

But now it has a different meaning.

Tax avoidance is the legal gray area between outright evasion and tax planning.

Avoidance is the bit that your lawyers and accountants say is legal, but which hasn't yet been tested in courts. The plan might not last long before the law is changed. And you might be asked to repay some tax.

Tax avoidance is the use of bizarre systems that serve no purpose but to reduce tax burden. Starbucks is a great example here. They have a gajillion shops in the UK; they employ many people; they're expanding. By any sensible analysis Starbucks is a sucessful company in England. Yet the shops make no profit. The only reason they make no profit is because they have to buy buy coffee beans from one supplier, and that supplier prices the beans very much higher than other bean roasters. That bean-roasting supplier happens to be based in a tax haven.

Can you agree that there is a difference between "not paying tax that you legally do not need to" and "going out of your way to create bizarre semi-legal schemes in the hope that you get away with it; especially taking into account the numbers of people working to create tax avoidance schemes and people working to investigate such schemes".

The other moral point is that these companies make full use of the products of the tax system - they would most certainly call the police if one of their offices was burgled - and so they should consider making sensible donations to that tax system.

(And before anyone mentions wage taxes or sales taxes: these are paid by the employees or by the customers, and merely collected by the company).

There are also business rates. (For non-UK readers: property tax on commercial property.)

I'm surprised at the implication that because of all this shit they're spending money on - shops, employees, expansion, etc. - they must be profitable. (Maybe they are, I don't know. Maybe they are stashing it away elsewhere. It would certainly make sense for them to do that.) But it doesn't automatically follow, because profit is what you have left after you've paid for all this stuff. All this expenditure is in fact bad for the bottom line.

You can't even argue that the money has to come from income, and that therefore the very fact of their profitless expansion is evidence of sharp practice. People have been known to lend out money! Sometimes they'll do it merely in exchange for a share in your business. If they like the cut of your jib, you don't even have to be making money yourself in the first place.

...which is why I'm sort of surprised to see this line of thought implied on HN ;)

I think he is incorrect in his assertion that companies should choose to pay more taxes than legally required, but I think he is right to say it, because it'll build political support for changes to laws which (in my opinion) need to be made.

In the US, we encourage everyone to "go out and live the American dream". Open a business. Be successful!

But as soon as you become successful, we will punish you via a huge tax burden among other things.

We explicitly advocate success, yet implicitly advocate punishment of success.

It's not hard to imageine why so many companies often see relocation as a way to relieve their tax burden. It's nothing a normal citizen doesn't do.

Instead of focusing on punishing companies (who will eventually just up and leave altogether), we need to fix the core problem that is encouraging the behavior -- ie. the tax code.

How is it punish?

You only pay on profit and it's clear up front when you start.

You can agree or disagree on it's efficacy on growing overall prosperity but to call it 'punishment' is strange.

I chose the word "punishment" because corporate taxes (and taxes of top tier earners) are dramatically higher than "everyday joe's".[1]

An argument can be made that they earn more/have more profit, and therefore can afford more in taxes -- yet that is the very punishment I'm referring to. "You are more successful than I, therefore you owe a higher percentage of your income".

[1] http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...

But it's extra money. If you don't want to pay corporate taxes, spend the money on expanding the business, wages, or dividends.

> But it's extra money.

What? Who are you to decide how a company or individual spends their money?

Your tone implies you feel that just because some company or individual has more money than they can spend, means they should pay more in taxes?

Again, that's whether you support regressive or progressive tax systems and their efficacy. What is fair? But it's not punishment.

What is fair? I personally think a flat tax is the fairest. Some countries have already implemented this, such as the flat 13% tax rate in Russia which has been a success so far.

Why do we charge people more just because they earned more? If you are a citizen, you should owe the same flat amount (percentage-wise).

You bring up the part I'm always bothered by with the rich people complaining that the current tax code doesn't tax them their own fair share.

The Treasury Department is more than happy to accept above and beyond your current tax liabilities.

But it's not tax deductible.