Thread

1. djoldman · 1790864377 · focus · HN ↗

   It often strikes me as quite the biased and one-sided take when a tax-paying entity is called out by the press for tax avoidance (NOT tax evasion, which is illegal). (yes TFA implies that Meta is breaking the law, I'm not talking about situations where entities break the law).

   Previously we've seen "The Secret IRS Files" from Propublica as well as other coverage of tax avoidance that never resulted in tax evasion charges. Coverage wide enough that it's arguably safe to assume that no laws were broken because there was quite the demand for an enforcement response.

   The funny thing is that a more accurate title for these pieces would be, "Federal Government Allows [tax-paying entity] a Massive Tax Break." And then the piece would be all about how the senate, congress, and president either explicitly wanted there to be this extreme tax loophole or was incompetent and allowed something they didn't mean to allow.

   Folks are continually getting upset and riled up about players in the economic system instead of who and what makes the rules.

   An analogous example: everyone got cranky about Martin Shkreli, mostly because he raised prices on Deraprim, although also because many would label him a brash jerk. But he went to jail for finance stuff, not raising prices. Why? Because raising prices in the way he did wasn't something the feds thought was illegal or wasn't something they thought he could be convicted of.

   Folks get mad at Musk, Zuckerberg, etc... if they're doing something illegal, ok yea that makes sense. If folks are mad about actions that are legal, it makes zero sense to be mad at the actor. Be mad at the people/entities who created the legal loopholes and laws.

   1. csallen · 1790869057 · focus · HN ↗

      We need both.

      Public shame and malice towards individuals who violate expected norms is actually a fairly good deterrent toward would-be bad actors. I'm sure there are many millions of instances per day where people decide not to do untoward things because they care about their reputations.

      But on the flip side, you are also correct. It's important that public attention also be directed towards the systems that incentivize and enable bad behavior, and the people who create those systems. Patching laws, shaping incentives, and empowering a distributed system of judges and courts to handle violations is ultimately much cleaner, fairer, predictable, wide-reaching, and (therefore) more effective than disorganized mob-led shame campaigns.

      Unfortunately, several things work against this:

      1. It requires much more time, education, intelligence, and emotional self-control to care about system design over simply shaming others. These four things aren't abundantly common in most populaces.

      2. Lawmakers and politicians have their own incentives to redirect public attention away from themselves. And they can take advantage of #1 to do this, which is basically what demagoguery is.

      3. Similarly, media companies have their own incentive, which is to increase clicks and shares and subscribers. And appealing to base emotions with strong headlines works 100x better than discussing complex laws and systems. Research shows that the #1 emotion that leads to sharing online is outrage.

      1. claw-el · 1790870281 · focus · HN ↗

         How should people find out what the ‘expected norm’ is? Is there only one set of ‘expected norms’ or multiple sets?

         1. gorgolo · 1790871567 · focus · HN ↗

            Especially here. If there ever was such a thing as an expected norm in how a multibillion dollar company handles its finance and taxes (a pretty complicated topic that’s quite far removed from normal life), it’s probably exactly what FB is doing.

            You are the CFO of Meta and you have have a choice to make in your tax reporting: option A and option B. Both are esoteric and don’t relate much to how a normal person pays tax or thinks about finance, both are legal, but option B leads to billions of dollars less in your bill. Would HN posters really choose option A?

            If there’s a problem it’s that there is so much complexity and so many legal but complicated choices you can make that change how much tax you pay, and only the very rich, and very large corporations, have the ability to explore those options (of course the law is also skewed towards giving them loopholes and tax breaks that don’t apply to a normal person)

            1. TeMPOraL · 1790873398 · focus · HN ↗

               There's also selection bias at play here: the press isn't in the business of publishing "everything is boring and normal" stories - the very existence of a headline mentioning some person or org doing something, already implies they are doing something wrong and violating established social norms.

               Which they probably aren't, half the time, but news services wants you to think they might, because your rage is their ad revenue.

      2. djoldman · 1790870585 · focus · HN ↗

         I could hardly agree more.

         I would say that we get the one (public outrage at specific companies/people) but not the other (focus on the legislation). Unfortunately, the latter has the controlling direct effect.

      3. darksaints · 1790870699 · focus · HN ↗

         > Public shame and malice towards individuals who violate expected norms is actually a fairly good deterrent toward would-be bad actors. I'm sure there are many millions of instances per day where people decide not to do untoward things because they care about their reputations

         I do agree for most people. But the problem is that the worst people have no shame. People like Musk, Bezos, Zuckerberg, etc., used to try to fake humility and act like normal people, but that ship has sailed and now they seem to take glee in acting like shitbags and getting away with it. Which is why we need laws.

      4. Aunche · 1790871754 · focus · HN ↗

         In this case, the established norm is for a business to legally avoid paying as much tax as possible. It's more than just a norm. It is extremely unusual for any business owner to do otherwise. It's 100% up to the government whether they approve this tax break.

         1. alistairSH · 1790873209 · focus · HN ↗

            This. I'd be surprised if there were software/tech companies that didn't actively use the R&D provisions in the tax regulations.

            The problem is two closely related issues, IMO... First, these rules are probably too broad/vague and easily abused. And second, it's too difficult/costly for the IRS to successfully challenge when a company does abuse these regulations.

         2. happymellon · 1790874144 · focus · HN ↗

            At least in the UK, if I overpay my taxes HMRC will issue a refund.

            I can even give them all my tax money, but if I also give them a list of items they deem to be a tax deduction, they will give me my money back. I don't even need to really ask for it except by putting it in the paperwork. I don't need to say "and therefore I believe I have overpaid by £X".

      5. awbvious · 1790871913 · focus · HN ↗

         Simplified messaging can perhaps work. I have come to the conclusion that taking money out of politics is the only way out. "Hate the game, not the player" only works when the player doesn't get to set the rules of the game. Shame those who have enough money to influence politics and either are known to "donate" (bribe) politics or donate darkly (with more money/power should be more transparency). And shame anyone who perpetuates money in politics.
      6. packersville · 1790873926 · focus · HN ↗

         Shame I get. There is healthy shame, though difficult to achieve sometimes. Malice you lose me. I see Malice as the intent to hurt retributively. Why do you think malice is needed?

         1. csallen · 1790883004 · focus · HN ↗

            I agree. I wasn't being careful with my language. Just cross out the word "malice" and replace it with "criticism" and/or "disdain."

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