Tax Avoidance: Moral or Not?

[Seraphina]

Seems like tax avoidance schemes are designed for and mostly benefit the wealthy. Welfare for the rich, if you will.
So is it moral? Meh - I don't think of tax law as being moral or immoral.
Unfair? I think so.

[Cato]

Tax avoidance as defined in the OP is a moral obligation. The so called loopholes are designed by the legislature to bestow upon lobbying donors a break in exchange for campaign contributions. It's actually the true power wielded in Washington; the sole function of which is reelection.

This is why I cringe every time I hear a politician bemoaning that our corporate tax rate is the second highest in the world. True on the surface, but ultimately meaningless because the effective tax rate is below 15% or so, if memory serves.

I believe in a progressive tax scheme, but the tax code needs a drastic overhaul with simplification in mind. It will never happen because politicians of both parties will never relinquish the power referenced above.

It's a very rare individual that knowingly and willingly pays more tax than required by law, loophole or any other means. This is why I think it's outrageous and disingenuous to chastise anyone (or business concern) that pays the least amount of tax allowable by law. It's not the taxpayers that suck, it's the tax law.

[Pat Mustard]

So, this thread was prompted by a comment in another thread.

For the purposes of the discussion, I have provided my definitions as follows:

Tax Planning: Structuring tax affairs in such a way as to gain a tax advantage, where that advantage is explicitly allowed/encouraged by law. This is legal.

Tax Avoidance: Structuring tax affairs in such a way as to gain a tax advantage where that advantage exploits a loophole or complex structure that exists for the primary purpose of avoiding taxation, that is against the intention of the law, but not explicitly forbidden. This is legal.

Tax Evasion: Structuring tax affairs in such a way to gain a tax advantage that is explicitly forbidden by law, or by simply failing to comply with the law altogether. This is illegal.

So, tax avoidance - legal, but is it moral?

Tax avoidance is simply evasion that goverments have chosen to turn a blind eye to, mainly because they let accountants and tax advisors write fiscal law.

[Pat Mustard]

Is your property worth more than $5 million, because if not, I'm pretty sure inheritance taxes don't apply. $10 million if you leave it to a married couple.

Inheritance taxes in the US are pretty good IMO; in the UK I think they apply to anything above $500,000

The threshold for inheritance tax in the US is set way too high. The tax is simply a tax on unearned capital gains, and while some allowances should be made (for example with primary residences exempted), setting the threshold so high is just simply telling the rinc "that's another tax you don't have to pay".

[vorlon13]

An unintended consequence (I would hope this isn't viewed as desirable) will be many more farm kids having to sell out upon the death of their folks.

This would be a huge help to big corporate farms, they wouldn't have to be in the market place with smaller competitors, the government would have wiped them out for them.

[Edwardo Piet]

Tax avoidance as defined in the OP is a moral obligation. The so called loopholes are designed by the legislature to bestow upon lobbying donors a break in exchange for campaign contributions. It's actually the true power wielded in Washington; the sole function of which is reelection.

This is why I cringe every time I hear a politician bemoaning that our corporate tax rate is the second highest in the world. True on the surface, but ultimately meaningless because the effective tax rate is below 15% or so, if memory serves.

I believe in a progressive tax scheme, but the tax code needs a drastic overhaul with simplification in mind. It will never happen because politicians of both parties will never relinquish the power referenced above.

It's a very rare individual that knowingly and willingly pays more tax than required by law, loophole or any other means. This is why I think it's outrageous and disingenuous to chastise anyone (or business concern) that pays the least amount of tax allowable by law. It's not the taxpayers that suck, it's the tax law.

So-called loopholes indeed. The concept of a "loophole" is an incoherent concept AFAIC. Either something is allowed or it isn't.

My bold.

[Whateverist]

Trump has shown the way. Only a sucker pays his taxes, so all moral people are suckers.