I wish fiscal fraud was more hardhly punished. In a democratic nation, it's basically stealing money from all of us, and not putting a share of resources that supports programs that benefit citizens of all income levels.
Two companies(nvidea, AMT) make similar products and hold a roughly 50:50 market share. both are doing well, both are selling units.
nvidea grows greedy and hires shady accountants to commit tax fraud, enabling nvidea to keep more after-tax money.
next year, nvidea has more money to dump into R&D -- they build a better product, and charge more for it. market responds, nvidea grows richer, ATM suffers losses.
nvidea keeps stealing money. has more for R&D, and more for marketing. nvidea buying sponsored reviews. keep building reliable products. more money for support staff.
ATM operating with a smaller budget every year. still improving, but not growing.
nvidea has even more money for R&D. more money for aggressive marketing. more money for sponsoring studios. "our art was built with nvidea products, and is best enjoyed using nvidea products".
the practice of stealing money to further growth to eclipse the competition by any means is hella old.
If breaking the law leads to an advantage over other companies, that strikes me as anti competitive. They are not competing on the merits, pricing, or service of their products. To take it to an extreme, hiring an assassin to literally kill the competition is anti competitive.
They disguised the extent to which their activities in France played into their operation for the purpose of putting it all on the books in another country. They were doing work in France and did not declare it as required by law.
And I thought it was common knowledge that corporations "settle without admitting wrong doing" when they're guilty as shit but know they'll have even larger punitive damages if they drag out a trial.
But then again, maybe you're right and Google would have paid their lawyers more than $1B fighting this, so it was cheaper for them to settle.
The point of market competition is that you can't do some certain things to make sure your output is productive.
You can go and kill your competition and that would also be competitive - but we don't really want that kind of behaviour so we have rules against this. When you're breaking and undermining those rules you are being anti-competitive - you are subverting market competition.
Umm, tax fraud by $BIGCORP amounts to robbing people who are forced to pay their taxes through the payroll. How is daylight robbery the same as legitimate competition?
Not OP but I guess it’s because a monopoly can afford to keep on paying fines and continue the same practice. A smaller competitor pays by the rules, can’t afford to pay fines, hence anti-competitive.
m-p-3, i am so glad you verbalized this, it is crazy how only few people understand this. Instead tax evasion beeing a shame infront of society, majority regards it as a virtue.
I think there is a fine line a lot of major companies have to go through to ensure they are not inadvertently doing fiscal fraud (and other types of fraud) while maximizing their main goal, which tends to be profit maximization. If the government punishes too hardly, individuals and corporations are more likely to shy away from that market due to increase in operations cost (E.g. More lawyers + accountants) and implicit risks. Customers would also move away from those products and services if the cost became too high.
Part of the governments job is to ensure that they react to potential loopholes faster, decreasing the competitive advantage that a non-conforming organization may have. A harsher punishment may even put some companies out of business, impacting unemployment rates, supply chains, medium-long term government revenue and the services they provide.
How would you go about increasing the punishment while considering the possibility that the corporation inadvertently did that? Would you punish larger companies more harshly? How would that impact the market place?
I couldn't agree more. This is something that no one, from any polical side, right or left or republican or democrat or whoever in whatever country, says enough. Companies are indeed considered as real entities whereas they are just emergent structures which behavior comes from decisions made by real humans. And I truly believe that those real humans should be trialed and sentenced more or at least as much as the company they are working for in cases of fiscal fraud. And this is not the case now, the company shielding them from the consequences of their individual actions.
For companies, the justice system works quite well (just like here, even with extraterritoriality and fiscal paradise), nations can manage to apply the law to them. But the responsibility of the individuals in the same legal cases is often forgotten.
Take the Google example : even if you talk of "fiscal optimization" to give a nice appearance to those actions, some individuals in Google crossed the line and knew it perfectly. And it is true that Google, as a structure, is ok with it ('don't do evil' does not apply when it comes to maximizing profits). But those people at Google who crossed the line will never appear in court, nor the ones having validated their work (probably the higher management), which is a shame in my opinion. It happens that a company break the law, but it never does it alone : it is people who instruct it to do so.
To see my point, look at England at the moment : if a ruler of a country decides to break the law, is it the country that is responsible or the leader ? My view is that it is both and both should be prosecuted by the individuals impacted.
While taxes are a sane and common way for a government to make money, there are countries where there is either no corporate tax at all, or only some industries are taxed. Additionally, there are places where corporations do pay taxes, but personal income is tax free.
Looking far into the future, in a post-scarcity civilization taxes are obviously unnecessary. So, while not a theft, it's not insane to wish for taxes to be gone in one's country.
> Additionally, there are places where corporations do pay taxes, but personal income is tax free.
Which is only possible because they either have lucrative (taxed) tourism industries, are rich in oil, or are Monaco (sorry but you're not getting in), Nauru (enjoy your stay while you can), Somalia (need I say more), or the Sahwari Republic (good luck).
So you either have places where governments are lucky to have found some other way to make money, or dysfunctional countries.
At the end of the day governments need to get currency somehow to provide the basics.
> Do people have a choice to opt out of those services and therefore their corresponding payments?
Yes. Move yourself out of the country somewhere else (and in the case of the US give up your citizenship). My go to recommendation here is Somalia for the "taxation is theft" crowd
If you decide to live outside of society, hidden in a shack in a self-sustained manner then maybe you could live tax-free, but you wouldn't be entitled to any subsidized services (varies by country) like healthcare, police protection, water treatment, driving on public roads, etc.
At some point, it's just easier to get taxes and let the authorities to determine where that money should be distributed to best serve the society that elected them. And if you don't like the way they redistribute that wealth then you're free to vote for someone else or get yourself elected to do things differently.
The internet is infrastructure. So is a postal system that gets your wares to your customer.
Or the banking systems and laws that make it possible for you to receive money via the internet in the first place.
If some customer in country X doesn't pay you for your services, you fully expect the government of that country to have systems in place that allow you to go after what you're owed.
But even darknet drug markets rely on a lot of infrastructure provided by countries/governments at the end of the day.
Taxation is a social agreement that we as a society of people decide to pool part of all individuals' money towards
projects that will benefit everyone in short or long term.
It is, but every now and then when I remember that overall tax that I pay is >50% of my gross income it does feel like theft.
I'm not a finance expert, but why can't there be just one tax for everything like VAT? If I buy a coffee for 1 euro I pay 20 cents VAT, if a billionaire buys a yacht for 100 mil he pays 20 mil VAT. To me that seems fair. I'm just thinking out loud here, but it seems that there are so many taxes and different stages instead of one, just so most of people wouldn't realize of how much tax they are actually paying.
There could be and they should be. There are better (more just, more enforceable, less hostile to businesses) and worse taxes (basically unenforceable easy to game ones which only honest people fully pay).
The problem is that increasing taxes in exchange of getting rid of bad ones is way more politically difficult than just introducing new ones or very slightly increasing existing ones.
For example land value tax is widely considered a very good tax: it's just (the more valuable land you have the more you need the government), it's easy to enforce (hard to hide the land), it doesn't hinder business (you pay it no matter what you decide to build there), it discourages hoarding on valuable resource. Still, if you try to increase it enough to get rid of some very bad taxes you still get an uproar an be voted out even if the change is revenue neutral. That's because you will hurt one entranched group a lot and everyone else will benefit on average less (at least at the beginning).
Because rich people have can afford people that will help them avoid paying taxes.
>if a billionaire buys a yacht for 100 mil he pays 20 mil VAT.
Or he will have some legal agreement with yacht owner in tax haven, to 'rent' a yacht for $1.
Paying 20c tax on 100mil 'purchase'.
Hey I didn't say that taxation was perfect :) it clearly isn't, especially nowdays when it seems that middle income class needs to carry burden of whole the country while top earners laugh all the way to their panama bank.
It would be more expensive for you to hire your own private police force, fire department, sanitation and water treatment plant, and countless other services.
It actually wouldn't, by a rather large amount, if it meant you could also opt out of the other government services you don't want and which comprise the large majority of the government budget.
"We need fire departments and they would cost 30% more if only 70% of people carried fire insurance" is fine until you spend 50,000% of that amount on War in Iraq and buying votes of retirees / drug companies with unsustainably large benefits increases.
I don't see the math adding up there, how the average person could have their own mini police and fire force, or any of the countless pieces of infrastructure that we all use. Taking out the portion of our taxes that goes to things we might not want doesn't even begin to cover this. Most of this stuff is available and works at all because everyone pays a little bit and economies of scale kick in to make it less than if each person rolled their own solution.
You don't have your own personal fire department, you and thousands of other people who live in your city each pay for fire insurance and the insurance industry then limits their claims by operating a fire company. It's basically the same as what the government does except that you have the option to not pay and then subsequently not have anybody to complain to if your house burns down. And the fire company may show up to put out your house fire anyway (to keep it from spreading) even if you don't have an insurance policy, but then you have a house which is half burnt by fire and half flooded by firefighters and you don't have any insurance, which continues to be a strong incentive to buy fire insurance to begin with and thereby fund the local fire company.
In the end you end up in the same place for the services that are actually worth having (like fire departments), because they're worth having so the majority of people buy into them and you still get economies of scale, but you get the option to decline other wasteful services that cost more than they're worth. And that puts useful pressure on individual services to be worth more than they cost.
If you're talking about a bunch of people paying into a fund to cover the cost, then all you've done is reinvent taxes. The only difference is who you pay them to, and that people on the lowest end of the income spectrum can't afford coverage even if they wanted it.
The only difference is that you have a choice in whether you want to pay the money in exchange for the coverage. Which is exactly the point.
The poor don't get out of paying it by having nominally low personal tax rates, because all the other taxes still apply to everyone. When you tax a business and it raises prices or can't give employees higher wages, that comes out of the pockets of the poor the same as everyone else, which is what makes them so poor to begin with. Remove $500 in spending of which $250 were real services, then pay $250 for the real services yourself, and the result is a $250 surplus -- which can go to the poor as much as anyone. They are, after all, the largest beneficiaries of lower unemployment (resulting in more jobs with better wages) and lower prices (because they spend more of their income).
I currently live in the Midwest in a fairly high taxed state. I've also lived in other Midwestern states were taxes were super low and any effort to increase taxes on anything was met with severe resistance.
The difference was very noticeable.
In the high taxed state, when I woke up at 7am after a heavy snowfall (read 6-10" of snow) my roads were plowed curb to curb. School buses were always running on time, the roads were clear and you were expected to be in the office.
In the low tax states, when I woke up at 7am after a heavy snowfall (read 6-10" of snow) the roads weren't plowed until late afternoon. Schools were routinely closed and you had no option but to work from home. The streets were hard to navigate since the plows just plowed around the parked cars, turning a two way street into a one way street. It was common to see cars plowed in for the Winter because the snow was plowed up over their windows. The city I lived in routinely ran out of money to pay the plow drivers so at times, the streets didn't get plowed at all later in the Winter months.
A lot of times, people reject the benefits of taxes and just see it as a money grab by the local and state governments. Once you experience the difference first hand, you can't have an appreciation of the amount of good taxes provide your local and state governments. I don't mind paying higher taxes because I know it does benefit everybody in a myriad of ways, not just the pleasant experience of having your streets plowed in a timely manner.
I grew up in Minnesota. Lived in North Dakota for about eight years while attending college and grad school. The comparison was between those two states.
Yeah, tax income doesn't have to come from the general public if the state has a competitive advantage it can exploit in some way. That's how Florida gets away with ranking #2 on fiscal security with no income tax too; tourism pays for everything.
I have a suspicion that most libertarians would be completely fine with unplowed roads. On top of that, should people want to have plowed roads they are free and welcome to hire someone to plow their roads.
This is objectively false. Taxation is you paying the government for services rendered (or, if you want to be very pedantic, access to those services, even if you don't actually use them - which, given that you're on HN, is extremely unlikely) - emergency services, roads, a military, courts of law, antitrust regulation, and far, far more. By being a citizen of your country, you are consuming these services, and therefore owe the government money. You don't like it? The vast majority of countries, including the US, allow you to leave anytime you want.
Edit: Come to think of it, using the government's services without paying tax is theft.
Services provided. Most people don't pay any tax until their first job, but are protected by the police, use roads and sidewalks, and attend public school.
Companies can't even have a decent financial system without government.
Not to mention that society can't function without systems to organise on a large scale. We've long passed the era of small settlements, when millions of people come together they need to be supported in many ways otherwise chaos ensues.
