Tax the rich

KyussBishop

PeadarCo wrote: »

To be fair KyussBishop one of the issues with this whole debate is that anyone who states higher tax's reduce corruption etc provides no evidence for it bar their own reasoning. Its very hard to have a proper debate about tax when people work on the basis its like this because I say so. Theories are only valid if tested in the real world. I would assume higher taxes would increase the probability of tax evasion because they would increase the reward. Example look at the importance of Ireland corporation tax rate. If it was excessively high companies would just move to avoid tax. While corporation tax is not the exact same as personal tax many people out there can move just as easily.

It is true that to state either way, that higher tax will or won't result in more tax evasion (and other claims), requires evidence to back it up (whether agreeing or disagreeing), though for some policies with little past precedent, there isn't much room for anything bar reasoning.

One of the main obstacles to proper debate in this thread, is I think the hostility just to some of the ideas regarding higher taxes and clamping down on evasion; the approach I take with a lot of discussions here, is forming my views as I debate, so discussion gets counterproductive quickly when merely ideas get reacted to with hostility.

With my previous idea of restricting personal (not corporate) tax evasion, through international co-operation in enforcing banking transparency, and threat of sanctions possibly for non-compliance; there is past precedent of this with the Cayman islands, which is a good evidence-based grounding for that discussion.

KyussBishop

The Corinthian wrote: »

I thought we were discussing tax evasion here, rather than banking secrecy which is only one small part of it? You do know that you can easily evade tax without the need of banking secrecy? If not, I'm not entirely sure what you intend to accomplish here if you don't even know what you're talking about.

The difference is in obtaining usable money, and how much you can obtain; anyone can siphon off money into a shell corporation, avoiding income tax (or other taxes) while getting it out is another matter.

If you want to get into the details of how to directly obtain usable money (the proceeds of tax evasion), and be able to use it without detection by revenue authorities, that is a way to explore this more.

The Corinthian wrote: »

Except I don't actually say that there. There's absolutely nothing there about leaving the tax havens alone and the only time I mention anything about that in this thread I say the opposite. So, I'm afraid you're either reading into what I wrote what you want to see, or you're being dishonest.

Perhaps I'm misreading the extent of what you meant so, but when I read "Yet, what you would require is a World where national or, in the case of many developing nations, personal interests would be sacrificed voluntarily for the greater international good.", it seems to imply that infringement of personal/national interests is necessary to adequately clamp down on this specific kind of tax evasion.

The Corinthian wrote: »

Except this is often used as a means of evading income tax. I know someone with a company registered in Dublin who's doing precisely this.

It doesn't matter. It is getting usable money out of a corporation that is the problem (and how much can be practically gained through the methods used), and that goes back to income tax.

The Corinthian wrote: »

I think it clear that beyond freshman philosophy/English hyperbole, there's not much you're bringing to the discussion, if for no other reason than you don't seem to understand how tax evasion actually works, even on a basic level. So, I'll leave you to it.

This to me, makes it pretty clear that you are more interested in denigrating my view than discussing the topic; instead of actually discussing the specific issues brought up, you are quick to dole out personal attacks and (indirectly) claim authoritative knowledge on the subject.

The Corinthian wrote: »

Except, I've never said that. I specifically said that while such measures will ultimately never solve the problem, they still have to be done.

It's much like many other social ills around today, such as war and poverty. Just because they may ultimately be beyond solving, does not mean that we should not address them or attempt to solve them. What I have questioned is vague and idealistic 'solutions' that seem to be based more on aspiration than any actual understanding of the problem they seek to solve.

In the end, you're not going to be able to take 'a step at a time' if you've no idea what direction you're even going in, in the first place.

Nobody has been discussing a 'perfect' resolution to tax evasion (after all, anyone can evade tax at a limited scale with cash), but an adequate solution that solves the worst of the problem (particularly, minimizing the overall amount of money that can be hidden).

golden lane

transferring wealth from the rich to the government.........is the worst thing that can be done....

the governments have proven time after time that they are a disaster as far as money is concerned.....

Qualitymark

golden lane wrote: »

transferring wealth from the rich to the government.........is the worst thing that can be done....

the governments have proven time after time that they are a disaster as far as money is concerned.....

You don't use the roads, the lights, the electricity and gas and water infrastructure, the schools, the transport, the airports; you don't work for the companies subvented by the government...?

golden lane

Qualitymark wrote: »

You don't use the roads, the lights, the electricity and gas and water infrastructure, the schools, the transport, the airports; you don't work for the companies subvented by the government...?

this thread say's...tax the rich......that would mean over and above what they are already doing.......

and as you may have noticed.......they are not running a good business model with ..republic of ireland limited........

PeadarCo

KyussBishop wrote: »

It is true that to state either way, that higher tax will or won't result in more tax evasion (and other claims), requires evidence to back it up (whether agreeing or disagreeing), though for some policies with little past precedent, there isn't much room for anything bar reasoning.

One of the main obstacles to proper debate in this thread, is I think the hostility just to some of the ideas regarding higher taxes and clamping down on evasion; the approach I take with a lot of discussions here, is forming my views as I debate, so discussion gets counterproductive quickly when merely ideas get reacted to with hostility.

With my previous idea of restricting personal (not corporate) tax evasion, through international co-operation in enforcing banking transparency, and threat of sanctions possibly for non-compliance; there is past precedent of this with the Cayman islands, which is a good evidence-based grounding for that discussion.

The hostility comes from as the Corinthian pointed out you don't have a good grasp of tax evasion and have avoided dealing with specifics. Its not as if information to support your position doesn't exist as The Bishop! has demonstrated.

PeadarCo

The Bishop! wrote: »

Here's an interesting report. Some evidence if you will relating to the theory in the OP.

http://www.cbpp.org/cms/?fa=view&id=3556

Interesting as you said. It would interesting to see the house value v mortgage situation and demographics of the people who are considered "rich" in Ireland given I would assume in the USA there would be less hard and soft barriers to movement. Even though if large amounts of people were employed by foreign nationals it might change. However based on that small increases in tax won't increase the propensity of people to leave that's not to say the increase wouldn't have other effects.

eire4

golden lane wrote: »

transferring wealth from the rich to the government.........is the worst thing that can be done....

the governments have proven time after time that they are a disaster as far as money is concerned.....

Please, this old chestnut that somehow governments are incompetent and bad by definition and private business is good is just a fallacy. There is plenty of corruption and incompetence to go around in both the public and private sector. The key is to get a good balance between the two and thats where the debate really kicks in. What exactly is the right balance.

mollymosfet

golden lane wrote: »

this thread say's...tax the rich......that would mean over and above what they are already doing.......

and as you may have noticed.......they are not running a good business model with ..republic of ireland limited........

You know in the US for example, taxes are at an all time low on the rich, yet they're in a total mess compared to when they were much higher?

KyussBishop

PeadarCo wrote: »

The hostility comes from as the Corinthian pointed out you don't have a good grasp of tax evasion and have avoided dealing with specifics. Its not as if information to support your position doesn't exist as The Bishop! has demonstrated.

I was dealing with a very specific aspect of tax evasion in my post (income in personal hands), and the arguments against that have been against a completely different kind of tax (corporate), despite me specifically saying that's not what I was talking about several times.

I've even explained the specific difference between them in my posts, and that while personal and corporate tax evasion are linked, the very specific kind I am talking about (income that actually ends up in personal hands, whether from a shell corp or not), was very clearly declared, as well at how it can be treated in isolation.

There has been no interest in engaging in a discussion about that which does not involve attacks or personal denigration, particularly of my knowledge of tax evasion; yet despite the supposed 'superior knowledge' of those attacking me, there have been no attempts at explaining precisely why this specific type cannot be discussed in isolation, without just using assertions and attacks.


My point about hostility is not just over the last week or so of discussion either, basically any new ideas about clamping down on tax evasion, or increasing taxes and the effects of that, have been treated with general denigration in this thread (and others); it seems as if it's not possible to have a discussion about some of these things without stupid mud slinging on this forum.


And before this goes into another round of circular arguments and personal denigration, if someone is going to argue against my point of view, do not assert and assume the initial point that personal/income tax evasion cannot be discussed in isolation, describe the reasoning for that (preferably without personal attacks) and an actual worthwhile discussion might just happen.

The Corinthian

KyussBishop wrote: »

I was dealing with a very specific aspect of tax evasion in my post (income in personal hands), and the arguments against that have been against a completely different kind of tax (corporate), despite me specifically saying that's not what I was talking about several times.

Where?

KyussBishop

Right from the beginning, all of my arguments have related to income tax, and I have made the distinction regarding corporate tax/evasion a number of times:

KyussBishop wrote:

What seems to be argued, is a general argument against any increase in taxation for high-earners, which ignores the potential for meeting such a balance.

There also must be wider considerations regarding an international effort against tax evasion (no matter how difficult that may be in the short term).


In short: The simple fact that people can evade or otherwise escape taxation, does not a-priori remove its utility as a means of reducing inequality.


EDIT: Also, another point worth remembering is that just closing income tax loopholes for starters, will net an increased level of tax, as there are a fair number of high-earners simply not paying their dues (paying less tax than the rest of society); that would, of course, come first over general income tax increases.

KyussBishop wrote:

I don't see why it's not possible to 100% clamp down on income tax evasion for citizens; you just need to have proper transparency between tax havens and your own government.

KyussBishop wrote:

the principal is enforcing transparency on banking institutions, so that personal income is more difficult to hide.

KyussBishop wrote:

I'm talking about making sure there is the information available to prevent illegal hiding of income, and ensuring there is enough transparency to make proper taxation of citizens no problem.

KyussBishop wrote:

The use of corporations to hide taxable income is a valid issue, and there are certainly legal ways to launder money in this fashion which take the edge off any personal tax, but this can be considered a separate problem in isolation, so long as the money is taxed appropriately when it reaches the person themselves (albeit with a significant tax reduction, if you look at the long term).

This still creates a constraint on income for the person, as the money stays tied up in the company whilst it is slowly siphoned out at a lower tax rate, but is still a problem (one to be treated in isolation).

KyussBishop wrote:

Delaware is not pertinent, I am talking about income tax in exclusivity (meaning personal money in bank accounts), and Delaware is a corporate tax haven, it does not provide personal banking secrecy.

I've made extremely clear the type and specific element of tax avoidance I'm talking about (regarding income actually put in the hands of a person), and you are conflating it with corporate tax evasion.

KyussBishop wrote:

The difference is in obtaining usable money, and how much you can obtain; anyone can siphon off money into a shell corporation, avoiding income tax (or other taxes) while getting it out is another matter.
...
It doesn't matter. It is getting usable money out of a corporation that is the problem (and how much can be practically gained through the methods used), and that goes back to income tax.

I've been saying repeatedly through the thread that it is this specific aspect of tax evasion that I've been focusing on, an how it can be isolated from corporate tax (even if corporate funds is a significant potential source of money that can end up in personal hands).

The Corinthian

KyussBishop wrote: »

Right from the beginning, all of my arguments have related to income tax, and I have made the distinction regarding corporate tax/evasion a number of times:

The first post you quote makes no such distinction and does not even mention tax havens.

The following three mention income tax evasion specifically, but do not raise any distinction between them and other aspects of how tax evasion takes place. It is during this part of the thread that I repeatedly pointed out that banking secrecy is simply one small part of how this process works.

Finally it is only from the fifth post that you finally attempt to make some sort of distinction, which to me looked like a serious case of changing the goalposts to suit you.

I've been saying repeatedly through the thread that it is this specific aspect of tax evasion that I've been focusing on, an how it can be isolated from corporate tax (even if corporate funds is a significant potential source of money that can end up in personal hands).

To begin with some or all if your personal income can be passed through a corporation if you so wish - what do you think contractors do, for example?

Once there, it's not 'your' income, it's simply the income of the corporation which has paid tax at local rates and is free to invest it as it wishes or leave it to collect interest - and when I say 'it' I actually mean you.

Oddly enough, this is exactly the same as sticking money into an offshore secret bank account, where you are free to invest it or leave it to collect interest as you wish. Remember, such a bank account is simply a device to store money (savings/capital) accrued from income, while avoiding tax.

Repatriating the money so you can spend it back home is another matter, but ultimately the same challenge regardless of whether it has been sitting in a secret bank account or a corporate account. For this there are various means, from the exploitation of tax beneficial investments, trust funds and countless other means, depending upon the jurisdictions and monies involved.

But that's not the point really, because if you do want to narrow the discussion according to your 'distinction', the corporation fulfils the same role as the secret bank account, thus simply eliminating the secrecy of the latter is not going to make much of a difference because there are alternatives.

I'm certainly not an expert in this field and a real tax expert in this area could probably suggest twenty different scenarios for tax evasion that have no need for banking secrecy, but is clear that I know enough that there's more than one way to skin a cat.

This is why I consider what you're saying naieve, because you have some ridiculous notion that eliminating banking secrecy will eliminate the ability for individuals to avoid tax. Yet when I tried to point out that it is not as simple as that, you chose to instead respond with hyperbole without even considering the possibility that you may not, in fact, know it all.

Joe 90

The Corinthian wrote: »

The first post you quote makes no such distinction and does not even mention tax havens.

The following three mention income tax evasion specifically, but do not raise any distinction between them and other aspects of how tax evasion takes place. It is during this part of the thread that I repeatedly pointed out that banking secrecy is simply one small part of how this process works.

Finally it is only from the fifth post that you finally attempt to make some sort of distinction, which to me looked like a serious case of changing the goalposts to suit you.

To begin with some or all if your personal income can be passed through a corporation if you so wish - what do you think contractors do, for example?

Once there, it's not 'your' income, it's simply the income of the corporation which has paid tax at local rates and is free to invest it as it wishes or leave it to collect interest - and when I say 'it' I actually mean you.

Oddly enough, this is exactly the same as sticking money into an offshore secret bank account, where you are free to invest it or leave it to collect interest as you wish. Remember, such a bank account is simply a device to store money (savings/capital) accrued from income, while avoiding tax.

Repatriating the money so you can spend it back home is another matter, but ultimately the same challenge regardless of whether it has been sitting in a secret bank account or a corporate account. For this there are various means, from the exploitation of tax beneficial investments, trust funds and countless other means, depending upon the jurisdictions and monies involved.

But that's not the point really, because if you do want to narrow the discussion according to your 'distinction', the corporation fulfils the same role as the secret bank account, thus simply eliminating the secrecy of the latter is not going to make much of a difference because there are alternatives.

I'm certainly not an expert in this field and a real tax expert in this area could probably suggest twenty different scenarios for tax evasion that have no need for banking secrecy, but is clear that I know enough that there's more than one way to skin a cat.

This is why I consider what you're saying naieve, because you have some ridiculous notion that eliminating banking secrecy will eliminate the ability for individuals to avoid tax. Yet when I tried to point out that it is not as simple as that, you chose to instead respond with hyperbole without even considering the possibility that you may not, in fact, know it all.

What the tax expert might suggest are ways to avoid tax. Tax avoidance is not tax evasion.

The Corinthian

Joe 90 wrote: »

What the tax expert might suggest are ways to avoid tax.

Officially, but in reality many go much further. UBS got in trouble with the US government specifically because it was discovered they were advising customers how to evade tax illegally - that's what got the whole ball rolling against the Swiss banks.

Tax avoidance is not tax evasion.

The above use of a corporate entity is technically avoidance as it is actually legal (AFAIK) - just about. But ultimately, the result is much the same as simply popping over to the Caymen Islands with a briefcase full of money; someone not paying their 'fair' share of tax and in fact paying far less than someone earning a fraction of them.

This is another reason why the whole thing is so complicated; such legal loopholes need to be closed, but other than the effect that doing so would have on legitimate commerce, no sooner one is closed than another is almost instantly exploited.

That's not to suggest that we should simply give up, but to suggest that the solution is 'simple' is profoundly naieve.

KyussBishop

The Corinthian wrote: »

The first post you quote makes no such distinction and does not even mention tax havens.

The following three mention income tax evasion specifically, but do not raise any distinction between them and other aspects of how tax evasion takes place. It is during this part of the thread that I repeatedly pointed out that banking secrecy is simply one small part of how this process works.

Finally it is only from the fifth post that you finally attempt to make some sort of distinction, which to me looked like a serious case of changing the goalposts to suit you.

It's completely clear that in all my posts, I was never talking about anything other than income tax and personal income, and accusing me of changing the goalposts when I even more explicitly make the distinction, is blatant dishonesty, and makes even more obvious your intention to smear than discuss.

The Corinthian wrote: »

To begin with some or all if your personal income can be passed through a corporation if you so wish - what do you think contractors do, for example?

Once there, it's not 'your' income, it's simply the income of the corporation which has paid tax at local rates and is free to invest it as it wishes or leave it to collect interest - and when I say 'it' I actually mean you.

Oddly enough, this is exactly the same as sticking money into an offshore secret bank account, where you are free to invest it or leave it to collect interest as you wish. Remember, such a bank account is simply a device to store money (savings/capital) accrued from income, while avoiding tax.

Repatriating the money so you can spend it back home is another matter, but ultimately the same challenge regardless of whether it has been sitting in a secret bank account or a corporate account. For this there are various means, from the exploitation of tax beneficial investments, trust funds and countless other means, depending upon the jurisdictions and monies involved.

But that's not the point really, because if you do want to narrow the discussion according to your 'distinction', the corporation fulfils the same role as the secret bank account, thus simply eliminating the secrecy of the latter is not going to make much of a difference because there are alternatives.

I'm certainly not an expert in this field and a real tax expert in this area could probably suggest twenty different scenarios for tax evasion that have no need for banking secrecy, but is clear that I know enough that there's more than one way to skin a cat.

This is why I consider what you're saying naieve, because you have some ridiculous notion that eliminating banking secrecy will eliminate the ability for individuals to avoid tax. Yet when I tried to point out that it is not as simple as that, you chose to instead respond with hyperbole without even considering the possibility that you may not, in fact, know it all.

That is in no way similar to usable income in a personal bank account, and again, if that money is to get into personal hands it has to go through personal income tax; the issue of shell corporations can be treated as a problem in complete isolation to personal income tax, treated as just a potential source of income.

Money that is tied up in a corporation is a completely separate thing; addressing taking the money out of such a corporation, into personal hands whilst avoiding income tax, is relevant.
This narrows things down quite a bit, and it has to be explained (in detail, not just asserted) why the methods used to launder money into personal hands, are impractical to clampdown on.

Also, this makes clamping down of income tax evasion not automatically synonymous with clamping down on corporate tax evasion, just synonymous with methods of clamping down on receipt of income from corporations; any claims that is impractical, need to be qualified in detail.

The Corinthian

KyussBishop wrote: »

It's completely clear that in all my posts, I was never talking about anything other than income tax and personal income, and accusing me of changing the goalposts when I even more explicitly make the distinction, is blatant dishonesty, and makes even more obvious your intention to smear than discuss.

Untrue and I explained why - dismissing this and simply repeating that you were clear doesn't change this.

That is in no way similar to usable income in a personal bank account, and again, if that money is to get into personal hands it has to go through personal income tax; the issue of shell corporations can be treated as a problem in complete isolation to personal income tax, treated as just a potential source of income.

How is money in a secret bank account any more usable income than in a corporate account that you own?

Also, you don't get taxed on potentials; you get taxed on actual and, in some cases, projected income.

Money that is tied up in a corporation is a completely separate thing; addressing taking the money out of such a corporation, into personal hands whilst avoiding income tax, is relevant.

You can say the same thing in many respects of taking money out of a secret bank account, TBH.

This narrows things down quite a bit, and it has to be explained (in detail, not just asserted) why the methods used to launder money into personal hands, are impractical to clampdown on.

But laundering money is different from hiding it, and I don't think you really understand this. Making such assets liquid again is a separate part of the process which doesn't really depend that much on where it's been stored.

Overall, you appear to be focusing on one tiny area of tax evasion which, even if eliminated, can easily be replaced - and this is why the problem is not so 'simple' to deal with.

rockclover1

they should implement a leaving tax for those rich who leave and shirk the public responsiblity of paying tax

KyussBishop

The Corinthian wrote: »

Untrue and I explained why - dismissing this and simply repeating that you were clear doesn't change this.

You are clearly just being obstinate here, as there is nothing at all unclear about this:

KyussBishop wrote:

The use of corporations to hide taxable income is a valid issue, and there are certainly legal ways to launder money in this fashion which take the edge off any personal tax, but this can be considered a separate problem in isolation, so long as the money is taxed appropriately when it reaches the person themselves (albeit with a significant tax reduction, if you look at the long term).

But apparently you can mindread and tell me that wasn't what I was talking about all along, accusing me of moving the goalposts.

The Corinthian wrote: »

How is money in a secret bank account any more usable income than in a corporate account that you own?

Also, you don't get taxed on potentials; you get taxed on actual and, in some cases, projected income.

You can say the same thing in many respects of taking money out of a secret bank account, TBH.

But laundering money is different from hiding it, and I don't think you really understand this. Making such assets liquid again is a separate part of the process which doesn't really depend that much on where it's been stored.

Overall, you appear to be focusing on one tiny area of tax evasion which, even if eliminated, can easily be replaced - and this is why the problem is not so 'simple' to deal with.

This 'tiny' area of tax evasion determines to what extent you can make use of the money or not, and how you launder the money is clearly an essentially important part of the tax evasion process; hiding money is one thing, but actually making use of it is something else entirely, so it's a bit silly to try and minimize that part of the tax evasion process.


In any case, going back to earlier discussion in the context of my arguments, there is little in the way of practical showstoppers in the use of international co-operation (possibly even sanctions), for bringing about transparency with personal banking and income (making more difficult at least part of the tax evasion process).

After that (a different discussion I've not been focusing on, as far as I'm concerned), pressure can be bared against the corporate side of the issue, including places like Delaware.

Doubtless you will be in a rush to rubbish the idea, asserting it (with no backing) as a being impractical, yet ignoring that there are general tax treaties to the effect of agreeing to clamp down on this stuff; it's a clear political possibility (especially as such lack of transparency is comparatively indefensible relative to tax breaks and the like), but without the necessary public and political attention/pressure applied at this point.