If you actually qualify for the deductions its fine, however when you "fudge" your numbers or circumstances to be eligible for deductions you normally wouldn't be eligible for (such as shuffling profits made in the U.S. to overseas subsidiaries) it is equivalent to collecting welfare or unemployment you technically qualify for, but do not particularly need.
Is Tax Avoidance Morally Reprehensible?
- Thread starter Tani Coyote
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aimeeandbeatles
watermelon
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It depends... If you have enough money already and are doing that just to line your pockets, it probably is. If you really need the money no.
Tani Coyote
Son of Huehuecoyotl
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Unfortunately some seem to believe that simply because you're more fortunate, you shouldn't be able to claim deductions or you know, try to find a perfectly legal way to keep more of your funds.
No, we're merely trying to see if there is indeed a way to reduce the tax rate from 25% to 10%. Tax evasion on my part would be:
1. Taxing the gains at 10% if I'm not allowed to
2. Not reporting the gains at all
My thoughts exactly.
For my case, being able to change the account so I get taxed at 10% rather than 25% is perfectly moral due to the fact a) it was my funds that made the profit possible to begin with, b) it was my account to begin with, albeit custodial; the custodial account is legally the minor's but with oversight of another party
Brian Shanahan
Permanoob
Poor people don't avoid tax (and most middle class are squeezed until they are poor too) as they cannot afford the tax experts needed to find the loopholes in all the legislation to be able to avoid tax. Also tax, when properly used (usually by a socialist/SD government) mostly goes to equalise the differences between rich and poor, so the poor in that case get more than they give.
Probably to do with the law of contract here and in UK you can't be legally bound by a contract until you're 18 (not sure if age is different in US but probably not). While buying a bar of chocolate is ignored (it's a contract) opening a bank account is significant enough to adhere to the law.
No if you are visiting the US you pay taxes on any income earned in the US, same as if you are a US citizen resident outside the state.
Frankly the whole situation is basically a choice between wanting to live in a country where the state is involved in the general life of the citizens and businesses resident in that state, or live in a one where the state has no ability to impose it's rules and regulations (for good or ill) on the country. If a) then you should not avoid taxes, if b) vote Palin in 2012, but don't expect to ever get a helping hand when you're in trouble.
@Oh yeah Tanicius the only difference between avoidance and evasion is in avoidance there is a loophole in the legislation to make the act of avoidance legal in word, even though it grossly breaks the spirit of the law (that is why most governments spend so much time on financial and tax legislation, to close the loopholes). Evasion is just doing the same when there is no existing loophole.
amadeus
Serenity now
The morally reprehensible part comes in when you pay the government more than you are legally obliged to pay for.
Tani Coyote
Son of Huehuecoyotl
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The poor can easily claim deductions can they not?
And by collecting welfare, they reverse the tax burden.
I'm not saying either of these is bad at all, merely saying that they too can avoid tax; personal exemptions aren't rocket science I'm sure. They may not be able to claim super-exemptions like the wealthy, but that's completely different.
It's why I support a standard deduction for everyone combined with a flat tax. That way everyone gets the deduction but the wealthy don't have any special ones they can claim.
Here it's just part of our very strange lineup of minority-related laws. It's legal to be sent to war and die at 17, but illegal to get into gentlemens' clubs, smoke, drink alcohol, vote, invest, and in some cases have sex.
16 year olds, similarly, are responsible enough to drive and have sex in many jurisdictions but can't do many of those same activities.
Only in America...
Contre said they're supposed to pay taxes on income earned even when not inside the country, so I assume that means they could arrest him for tax evasion if he ever came here, since he said he doesn't pay it(no way of being enforced so it makes sense).
Amadeus said:
Here here. But I'd replace legally with "morally" - why should I have to pay more as a percentage than anyone else? And that'll go even when I'm no longer taxed by their bracket; I'll strike down a wealthy person paying 9% when I'm paying 10 if necessary.
Brian Shanahan
Permanoob
So generosity is morally reprehensible? Wow, just wow.
Now if you said "when the government takes more off you than you can afford" then I'd agree with you.
ParadigmShifter
Random Nonsense Generator
So if I think it's ok to bumrape people I should do that?
Brian Shanahan
Permanoob
Only if you do it by appointment PS. You have to be polite at all times.
Integral
Can't you hear it?
I"m trying to work out if there's an essential difference between taking advantage of the mortgage deduction to avoid taxes (a strategy used by many middle-class households to lower their tax bill) and taking advantage of some fancy, esoteric corporate loophole to avoid taxes. Not seeing it, but I could be blind. Both are right there in the tax code...
ParadigmShifter
Random Nonsense Generator
Pretending to be a minor to get a tax break sounds dodgy to me.
Tani Coyote
Son of Huehuecoyotl
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Indeed, there are plenty of ways for people to reduce their tax burden, regardless of how many digits are in your income.
I wouldn't be surprised if there was a way for the wealthy to somehow make the tax regressive, but that just calls attention to the need for simplification.
Umm... what?
What I'm saying is that after I turn 18, I'm no longer a minor and thus would be eager to see if it's legal to tax myself as an adult, in which case I pay 10%, rather than 25%.
If it's not legal to tax those gains as an adult after the fact, well, tough cookies for me I guess. Next year!
amadeus
Serenity now
And taking advantage of peoples' ignorance of tax law to increase revenue is righteous?
Wow, just wow indeed.
If you're legally allowed (and you aren't intentionally fudging the numbers) then I don't see how paying no more than you actually owe is wrong. Now, if you know for a fact that a certain loophole is just that, a loophole that wasn't meant to be and will soon be fixed, then maybe you could make an argument that you shouldn't take advantage of our government's stupidity. But even that's a bit iffy, and most of the time, that's not the case -- they knew what they were doing. Even if the deduction is stupid, I don't see how you deciding to nobly sacrifice some of your money to not take advantage of it helps anything.
Maybe not morally reprehensible, but it's kinda stupid. But I mean, if you want to go on some pointless little crusade to reduce the national deficit by .000000000001% by not taking advantage of that deduction, and that'll make you feel good, then by all means.
Brian Shanahan
Permanoob
Reducing your tax burden is not avoidance though, avoidance is abusing loopholes to not pay tax you should be playing.
Taxes are currently regressive in a lot of areas, having capital gains taxes at a lower rate than income taxes is regressive, emphasising income over wealth in collection is regressive, raising exemptions for inheritance taxes are regressive, VAT (sales tax) is deeply regressive. I could keep going on. But your point of making tax simpler will probably mean an even more regressive tax system, as most people's idea of a simpler tax is a flat tax.
Brian Shanahan
Permanoob
Sorry but what you said can only be interpreted as a person of their own volition deciding to give the government something extra because they wanted to.
So then I am sorry I wasn't able to respond to what you didn't say, but meant to.
Tani Coyote
Son of Huehuecoyotl
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If you're legally allowed (and you aren't intentionally fudging the numbers) then I don't see how paying no more than you actually owe is wrong. Now, if you know for a fact that a certain loophole is just that, a loophole that wasn't meant to be and will soon be fixed, then maybe you could make an argument that you shouldn't take advantage of our government's stupidity. But even that's a bit iffy, and most of the time, that's not the case -- they knew what they were doing. Even if the deduction is stupid, I don't see how you deciding to nobly sacrifice some of your money to not take advantage of it helps anything.
Maybe not morally reprehensible, but it's kinda stupid. But I mean, if you want to go on some pointless little crusade to reduce the national deficit by .000000000001% by not taking advantage of that deduction, and that'll make you feel good, then by all means.
I concur entirely... it's kind of pointless. Not to mention, by cutting my tax burden with my limited resources, I can eventually gain even more resources that I can use for production and consumption, which helps move the economy along far more than any lack of deductions would.
Perhaps the legal definitions are different where you live, but here, avoidance means you simply use the tax code to reduce how much you pay. Poor, middle class, or rich. Business expense or personal exemption or whichever else.
I wouldn't say necessarily, only if it's hugely advantaged towards the wealthy as the 2003-2007 rates were:
A person on 10% had their long-term dividends taxed at 5%; a person at 33% or 35% taxed at 15%; the poor person is screwed over since their burden is halved but the wealthy individual's more than halved. The 2008-2010 rates were better since long-term gains were at 0% for the lower groups, which encourages savings.
What about a flat tax with a standard deduction?
Complete with high inheritance taxes on large amounts to compensate for the varying utility of the dollar?
Bamspeedy
CheeseBob
He should pay taxes if he wants to vote in US elections, have the choice to move back to the US whenever he wants, and get help from US embassies (though in Canada I suppose it isn't likely he will ever need their help unless he does the step mentioned below: ).
If he doesn't want those benefits then he should just renounce his citizenship and then he won't be expected to pay taxes to the US (on future income, there is no guarantee that past taxes due would be forgiven).
http://www.ehow.com/how_5666044_rid-citizenship-dual-citizenship.html
amadeus
Serenity now
Who does that?
Smellincoffee
Trekkie At Large
Tax avoidance is usually done by wealth-obsessed people want to cling to it as much as they can. Those who shun particular taxes for moral reasons (like Thoreau and the poll tax, supporting the Mexican war which he saw as being fought to expand slavery) are rare indeed.
