<story><title>The public has a right to know how companies that pay no taxes pull it off</title><url>http://larrysummers.com/2020/11/02/many-companies-pay-nothing-in-taxes-the-public-has-a-right-to-know-how-they-pull-it-off/</url></story><parent_chain><item><author>harry8</author><text>&amp;gt;this is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot.&lt;p&gt;Nope, these are the reasons that cause the situation. This outcome does &amp;#x2F;not&amp;#x2F; make sense nobody sane without a huge vested interest would design a system to achieve less tax paid when you earn more. It&amp;#x27;s entirely contrary to the intent and spirit of the tax code. This is not sensible. How to fix it? That&amp;#x27;s harder. Start with its a problem and morally and ethically wrong. It&amp;#x27;s really the only place to start from. I would say keep in mind two wrongs is not an improvement and unchecked government power is far worse than tax cheats but that does not change where this discussion should start.</text></item><item><author>gnicholas</author><text>This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created&amp;#x2F;updated.&lt;p&gt;When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our services was a no-brainer.&lt;p&gt;On top of that, big companies lobby lawmakers to make the tax system favorable to them. This makes sense for the same reason: paying a couple million dollars to create&amp;#x2F;maintain a provision that saves $100M&amp;#x2F;yr is a no-brainer.&lt;p&gt;I&amp;#x27;m not saying any of this is right or good (and I am no longer a tax lawyer; I now build tools that help people with disabilities). I&amp;#x27;m just saying this is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot.</text></item><item><author>ALittleLight</author><text>I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes.&lt;p&gt;My intuition is that if I personally came up with a cute &amp;quot;gotcha&amp;quot; like this where I wound up paying zero in taxes because of some loophole, I would go to prison. Why isn&amp;#x27;t the same standard applied to rich companies?&lt;p&gt;&amp;quot;You&amp;#x27;re technically owned by an Irish company you invented to avoid taxes? Cool.  The c-suite plus your accountants are going to prison for the next five years and we&amp;#x27;re seizing the X billion you actually owe plus a punitive fine.&amp;quot;&lt;p&gt;These tax shenanigans would stop if laws were enforced.</text></item></parent_chain><comment><author>jimmydddd</author><text>It seems like the comment (from a former tax advisor) you are responding to is explaining that the high cost of gaming the system is cost effective for large companies, but not for individuals.  In that respect, it &amp;quot;makes sense&amp;quot; that individuals cannot take advantage of these loopholes that companies use.&lt;p&gt;In contrast, you seem to be arguing a different point--that, to you, it &amp;quot;doesn&amp;#x27;t make sense&amp;quot; that the system is designed poorly.</text></comment>
<story><title>The public has a right to know how companies that pay no taxes pull it off</title><url>http://larrysummers.com/2020/11/02/many-companies-pay-nothing-in-taxes-the-public-has-a-right-to-know-how-they-pull-it-off/</url></story><parent_chain><item><author>harry8</author><text>&amp;gt;this is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot.&lt;p&gt;Nope, these are the reasons that cause the situation. This outcome does &amp;#x2F;not&amp;#x2F; make sense nobody sane without a huge vested interest would design a system to achieve less tax paid when you earn more. It&amp;#x27;s entirely contrary to the intent and spirit of the tax code. This is not sensible. How to fix it? That&amp;#x27;s harder. Start with its a problem and morally and ethically wrong. It&amp;#x27;s really the only place to start from. I would say keep in mind two wrongs is not an improvement and unchecked government power is far worse than tax cheats but that does not change where this discussion should start.</text></item><item><author>gnicholas</author><text>This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created&amp;#x2F;updated.&lt;p&gt;When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our services was a no-brainer.&lt;p&gt;On top of that, big companies lobby lawmakers to make the tax system favorable to them. This makes sense for the same reason: paying a couple million dollars to create&amp;#x2F;maintain a provision that saves $100M&amp;#x2F;yr is a no-brainer.&lt;p&gt;I&amp;#x27;m not saying any of this is right or good (and I am no longer a tax lawyer; I now build tools that help people with disabilities). I&amp;#x27;m just saying this is why it makes sense that companies can walk a fine line on taxes, save tons of money, and you and I cannot.</text></item><item><author>ALittleLight</author><text>I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes.&lt;p&gt;My intuition is that if I personally came up with a cute &amp;quot;gotcha&amp;quot; like this where I wound up paying zero in taxes because of some loophole, I would go to prison. Why isn&amp;#x27;t the same standard applied to rich companies?&lt;p&gt;&amp;quot;You&amp;#x27;re technically owned by an Irish company you invented to avoid taxes? Cool.  The c-suite plus your accountants are going to prison for the next five years and we&amp;#x27;re seizing the X billion you actually owe plus a punitive fine.&amp;quot;&lt;p&gt;These tax shenanigans would stop if laws were enforced.</text></item></parent_chain><comment><author>willyt</author><text>If only there was a website where people who automate things congregate. They could automate creating this legal structure so we could all do it, then governments would be forced to do something about it.</text></comment>