tag:blogger.com,1999:blog-4622776924781844427.post8965536578323392640..comments2024-03-23T13:43:27.051-04:00Comments on Tax, Society & Culture: Tax mitigation-avoidance-evasionAllisonhttp://www.blogger.com/profile/16733465339926078146noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4622776924781844427.post-30543347240413716342016-01-23T22:14:57.935-05:002016-01-23T22:14:57.935-05:00Staying within black-letter law may not be enough....Staying within black-letter law may not be enough. Even though tax evasion is a crime and tax avoidance/mitigation are not technically - Inland Revenue can investigate where it feels necessary, the intentions behind various entity structures and payment plans: Penny and Hooper or Ben Nevis Forestry Ventures Ltd (Wolters Kluwer CCH, 2015: 1402, 1399). So it would be best for a corporation not to push too close to the boundary of legislation and its interpretation due to the financial penalties that can be and have been imposed.<br />Ethical theory does not support tax avoidance/mitigation. Utilitarianism seeks to assess the sum of the greatest happiness between two options. A choice where the ends justify the means of any business decision is short sighted. The greatest good for the greatest number is not reflected in the biggest profits for the elite. Kantianism believes that people should not be treated as a means to an end but have rights inherently which reflects the need to treat people with respect rather than exploitation. Corporate taxes should be paid to reimburse the community on which the corporation relies while repaying previous incentives received to set up business in that community. Business has a duty to the community.<br />Executives run big corporations not shareholders (Giddens, 1997: 256); but there is a fiduciary responsibility to a wider group of stakeholders (Heath, 2006: 533). But who pays the penalty of tax avoidance/mitigation or legal action when Inland Revenue investigates or the media release an exposé? It is not the executive of the corporation but the customer, workers, suppliers and shareholders as the executives attempt to increase gross profits to pay this penalty. Trans-national companies can have sales larger than the gross national product of some nations (Giddens, 1997: 295). But should that mean that they have the power to take more from a community than they provide? Capitalism and globalisation appear to have had a detrimental effect on democracy and have reduced the trust of people in their political system (Giddens 1997: 343). Shouldn’t it be the people of a nation that decide how it is run not the executives of multi-national companies? <br />Acting within the law and social rules mean that corporations should in fact pay their taxes as the community intended when it created tax laws and Friedman misses this point. He also suggests exploitation is difficult but we still need employment, environment and international laws and the examples above demonstrate otherwise, e.g. Third World countries, film industry workers and voters. Incentives were given to companies to set up business to benefit the community and its environs not to exploit and destroy them and then move on. This puts the spotlight on a new type of dole-bludger- welfare for the wealthy. <br />Polly Techhttps://www.blogger.com/profile/14303007970544793086noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-11548086286229126292016-01-23T22:14:32.923-05:002016-01-23T22:14:32.923-05:00Bibliography
Back, P. (23/04/13) Avoiding Tax May ...Bibliography<br />Back, P. (23/04/13) Avoiding Tax May Be Legal, But Can It Ever Be Ethical? http://www.theguardian.com/sustainable-business/avoiding-tax-legal-but-ever-ethical accessed 1/01/16<br />Davison, I. (9/1/13) ‘The Hobbit: Should We Have Paid?’ New Zealand Herald http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10857995 accessed 7/01/16<br />Farrar, D. 16/01/14 A Newspaper That Pays No Tax Complains About Tax Avoidance! http://www.kiwiblog.co.nz/2014/01/a_newspaper_that_pays_no_tax_complains_about_tax_avoidance.html accessed 12/01/16<br />Freeman, R. (2004). ‘A Stakeholder Theory of the Modern Corporation.’ in T. Beauchamp & N. Bowie (eds.), Ethical Theory and Business (7th ed., pp. 55–64). Upper Saddle River, NJ: Pearson Education.<br />Friedman, M. (1970, September 13). ‘The Social Responsibility of Business is To Increase Its Profits.’ The New York Times Magazine, 32–33,122– 124. Retrieved from http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-res p-business.html<br />Giddens, A. (1997) Sociology 3rd ed. Polity Press: Oxford.<br />Heath, J. (2006) ‘Business Ethics Without Stakeholders.’ Business Ethics Quarterly, 16, pp. 533-557.<br />Kelsey, J. (1999), Reclaiming the Future: New Zealand in the Global Economy. Bridget Williams Books: Wellington.<br />Kelsey, J. (2003), Servicing Whose Interests?: A Guide to New Zealand’s Commitments Under the WTO General Agreement on Trade in Services. Arena: Christchurch, New Zealand.<br />Lane, P. (1983) Economy on the Brink: An Introduction to the New Zealand Economy, Longman Paul: Auckland<br />Martin, S. 1994, Industrial Economics: Economic Analysis and Public Policy 2nd ed. MacMillan Publishing: New York.<br />Money Week Videos. (2012, 2 November) Why does Starbucks pay so little tax? – MoneyWeek investment tutorials [Video]. Retrieved from http://www.youtube.com/watch?v=Th4fxMFRIt0 accessed 23/01/16<br />Nightingale, Tony. 'Government and Agriculture - Subsidies and Changing Markets, 1946–1983', Te Ara - the Encyclopaedia of New Zealand, updated 13-Jul-12 http://www.teara.govt.nz/en/government-and-agriculture/page-8 accessed 7/01/16<br />Södersten B. and G. Reed. (1994) International Economics 3rd ed. Macmillan: London.<br />Stewart, J. (2014, July 30). Jon Stewart blasts corporations on tax evasion tactics – 7-30-2014 [Video]. Retrieved from http://www.youtube.com/watch?v=WapP9t3vq8I accessed 23/01/16<br />Wolters Kluwer, CCH New Zealand Limited, New Zealand Master Tax Guide for <br />Students, 2015. Auckland, N.Z.: CCH New Zealand<br />Wright Mills, C. (2000), The Power Elite. Oxford University Press: Oxford.<br />VPRO Backlight, The Smart State, Mariana Mazzucato http://topdocumentaryfilms.com/smart-state/ accessed 12/01/16 <br />Polly Techhttps://www.blogger.com/profile/14303007970544793086noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-11404999630088840992012-06-10T13:25:35.546-04:002012-06-10T13:25:35.546-04:00You're quite right John, I just need to adapt ...You're quite right John, I just need to adapt to this taxonomy through use. Thanks for the comment.Allisonhttps://www.blogger.com/profile/16733465339926078146noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-9588625019169015102012-06-06T00:57:33.784-04:002012-06-06T00:57:33.784-04:00Comment by John Prebble, Victoria University of We...Comment by John Prebble, Victoria University of Wellington<br />I was pleased that l'Académie Internationale de Droit Comparé adopted the legal analytical framework and terminology of mitigation/avoidance/evasion that Zoë Prebble and I suggested for its 8th World Congress (Washington DC 2010). Complex discussion goes better with agreed labels. (Karen Brown’s book publishes papers from the 8th Congress.)<br /> It may be better to save "minimisation" and "reduction" to use as generic terms that refer to any reduction of tax, whether by means of evasion, of avoidance, or of mitigation.<br /> I suspect that it would not help legal analysis further to subdivide the category of mitigation. By "mitigation" I refer to ways of reducing tax that are within the spirit of the statute or within the contemplation of the legislature. In short, they are not targets of a GAAR. In the United States, falling sick and incurring higher medical bills is one such way. In Australia, mining for gold used to be another. In New Zealand, adding roll bars to your tractor was a third. We may draw moral distinctions between these examples (and re-label them if you fall sick because of smoking or eating too much) but their legal category remains the same.<br /> Drawing distinctions between different kinds of mitigation can be useful for discussion of policy and morality, but adding sub-categories within legal analysis risks confusion. I hope that the terminology that the Académie adopted will become the international norm.John Prebblehttps://www.blogger.com/profile/11283218063312192342noreply@blogger.com