I'd replace wrongdoing with illegal. If you ask me, if you're a billionaire and you're not willing to pay taxes and spend 0.0001% of your wealth on the expertise to reduce your tax bill by 99%, in legal ways that 99.99% of the rest of the population doesn't engage in, then by all means that's wrongdoing to me and I think most would be with me on that.
Could not agree more. Our society is based on the foundation that everybody does her/his own fair share, if the leaders of the world think it is not the way then lets just stop paying taxes and see how fast things change.
One funny thing about humanity, we used to pay 1/10 of our income that was enough for the "state", I am paying 65% (that is right) of my income to the sate right now and it is not enough, I have to pay VAT on everything on the top of that so that the government can spend it the most ridiculous inefficient way on projects that are at least questionable, yet many of the politicians just avoid paying taxes through these offshore tax havens. Do they know something we should too? :)
Where do you live that has a >65% top income tax rate? Because I quite like the sound of it. Or are you conflating other taxes and presenting an overall figure?
Depending on your definition of income tax you check 2 numbers:
- the lower number that you as a person pay (strictly the personal income tax)
- the higher number, combining what the company pays + what you pay after your income.
I am a contractor so I get a breakdown how much was spent on taxes and if get 100 EUR from a company the tax deduction is 65 EUR. (Obviously, the % depends on your actual income).
Combine this with VAT and you see that your actual contribution to the government is in the 70%-80% range.
I still remember how bad I felt for the peasants in primary school when we learned that they had to give 1/10th of their income to the state, and later another 1/10th to the church.
Thanks for the explanation. Are you taking into account the lower rates, though? For example, where I am, there's a personal allowance meaning one can earn £10,000 and not pay a single penny in income tax. The basic rate (which ends at a value substantially above the average salary) is only 20%. I'm guessing you're not in the UK, so it's going to be harder for me to compare situations. I don't think it's fair to combine income tax with VAT since that (mostly) applies on goods you choose to buy, rather than a percentage of your earnings.
You can go to different countries for having lower tax rates, in my experience it is never going to be less than 35 - 50% for the amount of money I make.
I am not sure how is it not fair to combine VAT + income tax to understand how much you are actually paying to the government. Goods I "choose" to buy includes: food and clothing, I am not sure how much it is a choice or just a necessity. Buying a flashy car is a choice, buying bread or a medicine is not so much.
That's why I added the "(mostly)"; where I live, most food is exempt from VAT, which is as it should be. I agree that clothing is a necessity, so should also be exempt, but only up to a reasonable limit - and then things get a bit too complicated.
VAT is definitely a problematic tax because it tends to hit the poorer harder, but that doesn't affect the fact that it would be possible to pay almost none of your income as VAT, or you could pay millions in VAT; it's very different from actual income tax.
He isn’t “conflating”, he clearly said this is the total paid to the government — i.e. all sorts of taxes. That you like the sound of it is, frankly, horrible.
It's horrible that I like the sound of a high-ish top rate of income tax? We haven't even stated the terms of what income level that tax rate is applied at, so your finding it horrible is either a total misunderstanding, or you object to the progressive nature of variable income tax outright. I hope it's the former, because I find the latter truly objectionable.
I find the idea of people dressing up simple theft as something other than it is, and in the ill-fitting trappings of a global social good, despite the fact that the institutions being financed by this form of theft were the largest non natural cause of death in the preceding century truly objectionable, too.
Letalone moving onto a particularly egregious sort of theft involved in modern taxation rackets where the burden approaches three quarters of the total earnings of any given individual. If you're cool with this how about I extort you for 75% of your income and then use it to finance a private mercenary company that runs around the globe destroying lives and property for ill-defined "geopolitical objectives"?
But I guess "I find x truly objectionable" is somewhat of a content free statement, unless we're just trying to farm moral outrage from our respective in-groups.
Taxation is obviously not theft, any more than charging for goods is. "75% of your income" is a very different thing than "75% of your income beyond a certain figure"; I have no problem with basic levels of income being absolutely tax-free. I don't agree with many actions undertaken by my government, including launching illegal wars which I have protested on the street against. That doesn't mean I don't think everyone is entitled to a certain level of wellbeing, paid for by the general economy.
After taxation, what is your actual income? Is it not enough?
>Taxation is obviously not theft, any more than charging for goods is.
Pretty sure when you force or coerce someone to buy something they do not want, it is illegal and immoral. And if the value of the item is significantly less than the price paid, it is theft in all but the most pedantic ways.
> Taxation is obviously not theft, any more than charging for goods is.
The difference between charging for goods and services vs taxation is that you are unable to choose not to patronise the state. A mugger charging you 75% of your income for the privilege of leaving his dark alley with your throat unslit is providing the same choice to you as the state is with regards to taxation. You are not free to refuse to be a customer of the state, any more than you are free to refuse to be a customer of said mugger.
The only factual mathematically definable difference between theft and taxation is that taxation is legal, and hey presto, it's the agency that writes the laws which defines this difference. Nice trick if you can find idiots naive enough to fall for it, and they are fortunately not in short supply.
If taxation is not theft, then the holocaust, or any killing by any state in all of history, is by definition not murder, because the difference between the murder and state sanctioned killing is the same as the difference between theft and taxation, one is technically illegal, and that is all.
> 75% of your income" is a very different thing than "75% of your income beyond a certain figure"
It is indeed, and you appear to not have grasped what OP actually says, so let's put it here so you can reconsider your position;
>> I am paying 65% (that is right) of my income to the sate (sic) right now
Not "I touch the 65% tax bracket at the top of the progressive income tax schedule which the state I am resident in has declared", but "I am paying 65% (that is right) of my income" period.
So yes, it is nearly three quarters of this person's income, being taken against their will, to support an institution which is not just incompetent, but actually hugely, enormously viciously destructive and damaging to the world at large, to the extent that it is the largest non natural cause of death in the preceding century.
> I don't agree with many actions undertaken by my government, including launching illegal wars which I have protested on the street against.
And worse yet, you actually know just how terrible the actions of the state are, to the extent that you have taken to the street protesting it, and yet you still feel the need to speak up in a public forum about how the idea that these parasites forcibly rob people of nearly three quarters of their earnings makes you feel warm and fuzzy on the inside?
Think long and hard about this.
> That doesn't mean I don't think everyone is entitled to a certain level of wellbeing, paid for by the general economy.
Even if you granted that "everyone is entitled to a certain level of wellbeing" (and frankly, that's an enormous can of worms right there that I'm not even going to dip a toe into at this point in time) that is an end, not a means. Conflating the end of social welfare with the means of theft does not necessarily follow at all.
> After taxation, what is your actual income? Is it not enough?
After theft, without theft avoidance, my income is about 25% of the original also. Could I do more and live a better life with the other 75% that is instead being stolen from me to finance demonstrably ineffective local social programs coupled with heinously disgusting foreign policy objectives? Is that what you mean by "Is it not enough?" Because if so, no, it's not enough.
Frankly, I'd give up almost all of the rest of it to avoid having given any of it to those parasites to begin with, and this is a constant drain on my motivation for economic activity in general, knowing how much of my earnings will go to finance activities that make me violently ill if I think too hard about them.
I will comment on the Holocaust analogy say that yes, it was technically legal in the German state since it was sanctioned by the State. That does not mean it was right. The German state was misusing its authority, being hijacked by a dictator and his deranged coterie of supporters.
There has to be some arbitrator of Justice, to settle disputes and create laws and we decided to create institutions to do just that. These institutions are not perfect, and sometimes they may be hijacked. Like Hitler and the German state, or Stalin and the Soviet Union. These institutions are by no means perfect or efficient but there is a need for their existence.
> will comment on the Holocaust analogy say that yes, it was technically legal in the German state since it was sanctioned by the State. That does not mean it was right.
Quite, that was not my implication, you seem to have assumed that my equating the refusal to label taxation as theft with the refusal to label state sanctioned killing as murder means that I am in favour somehow of state sanctioned killing.
The opposite is in fact true, my equating the two is to show that I strongly disapprove of both, and view objecting to the characterisation of either as theft and murder respectively based purely upon legal sophistry as fundamentally useless hair splitting which does not change the nature of the subject under discussion one iota.
> There has to be some arbitrator of Justice, to settle disputes and create laws and we decided to create institutions to do just that.
Dispute resolution and law are certainly things for which there is a demand, I do not grant that the only means by which these things may be provided is via the modern westphalian nation state.
> These institutions are by no means perfect or efficient but there is a need for their existence.
Well, we certainly agree that they are enormously imperfect and inefficient, however on the second one we part ways, so I'll let you make your case; why is there a need for their existence? What is one good or service which the provision of has proven utterly intractable outside the infrastructure of a forcibly imposed land monopolising human farming modern westphalian nation state wielding political authority as defined in Michael Huemer's book on the subject, The problem of political authority?
> The difference between charging for goods and services vs taxation is that you are unable to choose not to patronise the state.
I agree with you on this for persons, that membership in the state should be voluntary and accessible. Currently people are forced into state membership and discriminated against when they seek alternative state memberships based on birthplace, parents, and other factors which would typically be considered bigotry.
However, this argument breaks down entirely when applied to corporations. Corporations do have voluntary membership in states; nobody is obligating a corporation to make use of the services of any state. Beyond a certain size, corporations basically have complete freedom to operate within whatever states they choose, making use of the services of that state. And when you consider that the vast majority of income for the rich comes from such corporations, and furthermore that one of the easiest ways to change which state(s) you are a member of is to operate through a corporation, the separation between corporations and rich individuals becomes unimportant. Maybe you are unable to choose not to patronize the state, but the very rich are not so limited. If anything this is a very strong argument for progressive taxation: the rich are patronizing the state more by choice than the poor and therefore it's fairer to charge them more taxes.
> So yes, it is nearly three quarters of this person's income, being taken against their will, to support an institution which is not just incompetent, but actually hugely, enormously viciously destructive and damaging to the world at large, to the extent that it is the largest non natural cause of death in the preceding century.
This would be a more persuasive argument if the governments to which this money was going were not run by the same people who are evading the taxes. Most, if not all, of the wars in the last 50 years have been caused by corporate interests. The difference between government and corporations is that at least in representative democracies, the governments must make enough pretense of doing good to keep getting elected (with plenty of help from corporate funding and other forms of corruption). Tax avoidance means that less money must go through this pretense; it's easier to justify spending less money on schools when the government has less money.
> Frankly, I'd give up almost all of the rest of it to avoid having given any of it to those parasites to begin with, and this is a constant drain on my motivation for economic activity in general, knowing how much of my earnings will go to finance activities that make me violently ill if I think too hard about them.
Okay, so why don't you act on your beliefs instead of stating them ineffectually? I doubt many people are enforcing the citizenship or taxation laws of Somalia right now. You can probably opt out of patronizing a state by moving there. If you really think that being forced to patronize a state whose actions you don't agree with is unfair to you, there are ways to stop patronizing states.
Not paying taxes is leaching. Tax dollars pay for the infrastructure that holds society together. If it wasn't for tax dollars, the society in which you derive your income wouldn't exist.
You are provided access under the condition that you put your fair share in when you profit from what is provided. We have a democratic process to determine who can and at what rate they should contribute back.
What right do you have to steal but not give back?
If you feel so strongly in regard to your opinions about tax, why haven't you left society to rely on your bootstraps alone?
Not paying at all and expecting society to still support me, yes that is leaching. But thinking I shouldn't be forced to pay to blow up innocent children or to subsidize the break down of traditional families... how is that leaching.
> But thinking I shouldn't be forced to pay to blow up innocent children or to subsidize the break down of traditional families...
We live in a republic, show your disapproval of these policies to your representatives. There are people with similar opinions, I am one of them, and hopefully the change will gain momentum.
> how is that leaching.
The same arguments are piggy-backed upon by people who are morally opposed to all taxes. Hijacking issues that many people are opposed to, such as funding unpopular wars, is a convenient way of promoting an ideology.
> Not paying taxes is leaching. Tax dollars pay for the infrastructure that holds society together. If it wasn't for tax dollars, the society in which you derive your income wouldn't exist.
This chain of reason justifies North Korean concentration camps. You are simply throwing out a bunch of justifications for terrible things because you state that the things which those terrible things encase are the infrastructure that holds society together, and grant no possible conceivable alternative for how that infrastructure may be provided, when in fact you simply neglect to acknowledge there is no infrastructure that exists at all that has not been provided with organisational structures outside the modern nation state, period.
> What right do you have to take from us but not give back?
What right do you have to take from us, the people who do not wish to be subject to your theft, and not give back? I want nothing from the state except its utter annihilation. By choice, I take nothing from the state, and never will.
That line of hyperbole also justifies ignoring any value or good the state can and has provided.
If that infrastructure can be provided without the state, why hasn't it?
You are positing a hypothetical system that exists without taxes against a real, concrete system that exists and you take part in everyday. That system right now is dependant on taxes and you're throwing it out for a nebulous ideal world that is stateless and exists only in your head.
> I want nothing from the state except its utter annihilation. By choice, I take nothing from the state, and never will.
Do you drive on public roads? Enjoy protection from crime by the police? Enter buildings and eat at establishments that are inspected for your safety? Ever have to use the state to uphold a private contract? Have you used a telephone, cellular or landline?
Do you use the internet?
How can you realistically say you take nothing from the state and never will?
If you are as serious as your rhetoric, there are virtually stateless places in the world where you can actually live out your dream of taking nothing from the state. Areas of Somalia are among them.
You can reasonably argue that the government is involved in issues that are not free rider problems, but I've never heard a reasonable alternative solution to the necessary problems that government does address. Do you have one to contribute?
Usually it'll go something like: sell product, pay VAT (easily 20% in many countries), take EBT and pay some form of corporate income taxes, then take those profits and pay them out as dividends and pay dividend taxes, or retain earnings and pay for cap gains tax. Or alternatively skip the first step and say you're paying VAT taxes which raises the costs of all your consumption. The end result can be quite high on paper. But then, there's lots of other factors that have nothing to do with Panamanian shady tax loopholes, that create a different reality from the top 'tax rate tables' people like to quote from wikipedia.
Anyway, for actual rates paid, just look at the tax revenues in a country in a given year, then look at GDP and take its percentage. It'll give you a pretty decent proxy for average effective tax rates, iirc in the US it's a little under 30%, on average. That's nothing to complain about. Of course some people pay more, and we call those people rich and some people filthy rich. Frankly, I couldn't care less about that but that's me.
In the UK where you are from, the top marginal rate is 13.8% employer NI (make no mistake, that money comes out of your pocket), 2% employee NI, and 45% income tax. Grand total = 60.8%.
I think what OP meant is that there are reasons for companies to be off-shore which are totally above board.
A common reason that investment funds are in off-shore tax-havens is because they have lots of international investors. If the fund was say in the US all the investors would have to file tax documents in the US even if they weren't US based, by being based in a tax haven it means investors only have to file local tax paperwork and not paperwork in a second country.
Is that really true? I am not a US citizen but I have an account with a US broker. I just need to file a single form once in a while declaring my foreign tax status and that's it. This can hardly be the reason why it is absolutely necessary to have offshore holdings.
(Of course, I have to pay taxes at home for any profits and there are supposed to be mechanisms that ensure I do...)
If you deal in volatile markets with questionable rule of the law and weak property rights (e.g. Russia or much of the Middle East), then the ownership and its transfer is often structured with offshore companies.
The leak however suggests the legit offshore cases are drop in the bucket in this overall money laundering business. Kind of like with file sharing, many would argue we need it primarily to get our latest Ubuntu ISOs and other legit uses, but we all know it's a lie.
I believe it depends on the nature of the investment and your relationship with the US. For example I believe in your situation you'd have to pay US taxes on dividends from US companies.
This x1000. It's the perfect opportunity for a startup: nation/globe sized potential, something people are willing to pay for, and accomplishes a public good: eliminating the inequality in taxation and making the effects of the tax code more readily transparent. (Though if you're too successful at that they'll rework tax systems to be more sane and less vulnerable to this kind of thing, which I would count as a victory.)
The opportunity will become more stark as taxes on high earners go up.
Eliminating inequality of taxation means flat tax instead of progressive tax. That would require either substantial reduction of the government expenses or substantial raise of the taxes for low incomes. That probably won't be very popular.
"Inequality" here is a weasel word, because it sounds bad without further argumentation.
The argument for progressive taxation is that the same tax rate is a far lesser burden on someone who makes more than on someone who makes less. If one agree with that, then progressive taxation would seem to be fairer. Of course "fair" is entirely subjective.
I agree it is a weasel word. If you argue for progressive taxation, you should not say it eliminates "inequality" - you should say inequality is awesome. You can't argue both for equality in taxation and progressive tax at the same time - they are contradictory by definition.
Buying a SUV -> You pay 10,000 USD in taxes.
Buying bread -> You pay 0.01 USD in taxes.
We could get rid off income tax at all and just increase the VAT to ~20 - 50% depending on the type of the product. This way it is almost impossible to cheat. Solving taxation for corporations still an issue though.
Now, define "luxury items", while considering e.g. that in the UK there's VAT on things like tampons (though at the reduced 5% rate), while e.g. imported luxury meat is zero-rated because its food.
It's an incredibly complicated tax to apply, because the rules tend to grow to deal with more and more corner cases.
For example: Are jaffa cakes cakes or biscuits? It took a lengthy court case to determine that they are in fact cakes for the purpose of UK VAT [1] [2].
The reason for this case was that cakes are exempt from VAT as food no matter what, while biscuits are zero-rated in the UK only if they are not covered in chocolate. In the latter case they are considered confectionery, which is standard rated. Here's more on the complexities of this classification [3].
I agree with you, when it comes to applying law to real life it is usually lengthy and pricey process. We should just use a better legal system where these things are not up in the air. You can complicate life with broken legislation, just to keep lawyers busy. You could also just ask: do we need a lawyer to determine that jaffa cakes are cakes or biscuits, or we can pick one and go with it.
On the other note on VAT categories: how about collecting data and letting machine learning decide what is a luxury item? We have excellent clustering algorithms that can find clusters in data human has no chance to find. Lets apply that to purchasing habits and figure out what sort of clusters we have out there, and lets decide how much VAT you pay based on that.
Laws are supposed to be somewhat stable though, so having to update tax systems based on evolving patterns of what rich people are doing kind of breaks that.
The classic UK example is dried fruit. If it's bought in the cake decoration department it's 0% VAT, from the home brewing department 20% VAT.
Also for some items such as gift baskets the food is 0 rated but the basket/bowl is rated at 20% and the VAT is proportionally allocated. (I can't remember if it's cost or sales price)
This is a dramatic over-simplification that ignores what is actually a cascade of exemptions that leads toward a similar tax-law morass that we already have.
Now, fend off the numerous attempts to have goods moved to a different category. We have enough trouble with "prepared food is taxed but raw food isn't".
For what it's worth, it's hard to see a Land Value Tax as being unfair, it's extremely hard to hide your taxable assets, and it works well for people as well as corporations.
Land Value tax can be extremely cruel if you happen to be poor living in a neighborhood that suddenly became popular. You are basically forced to sell your home (also not in the best of positions - you need to sell fast and can't wait out for the peak price) and move out because you can not afford to live next to some rich person. While income tax and VAT are proportional to what you earn and consume, and can vary easily with income/consumption level, changing housing is much harder, and can put people in very bad situations through no fault of their own.
I would say that this argument seems to imply that no neighborhood should ever grow (for its existing residents would be priced out.)
This, however, is a fallacy-- the higher valuation of the land implies a larger return on the land, consistent with increasing the amount of people who can live there. (i.e. replacing a small house with an apartment building.) This allows more people of modest means to live in this neighboorhood, instead of less.
Compare to the Palo Alto model, where land never appreciates in taxable value-- people are able to stay in their home, but only those who were lucky enough to buy at the right time. The overall capacity of the city does not grow, and people are priced away from buying into the city.
Land-value taxation has much better incentives. Income taxes provide an incentive to be "poor", while land-value taxes provide an incentive to not use valuable space.
+1 because you're right about the importance of distribution.
My family are inflation "refugees". It's bad in of itself.
I agree that the distribution of the money is the worse part of the printing press. Giving money to soup kitchens is not as bad giving it to upgrade your military equipment. But, lets not kid ourselves. The central bank is a very powerful instrument of control. The powerful are hardly going to relinquish it!
I agree in theory, but in practice, it's impossible unless the entire world agrees on the same VAT rules, otherwise shopping across country barriers is bound to happen.
The problem isn't (just) different rates for different incomes; it's how people of lesser means are less capable of setting the complicated structures that can make them technically owe less money under the definition of taxable income used by the tax code. A flat tax doesn't change that.
Probably wouldn't work. Tax "loopholes" are available for everyone - that is everyone who earns enough to use them. They aren't free, and if you need to spend $1000 to save $100 on your taxes (and have your money locked in several shells of corporations who knows where) that's not what you'd do. The reason not everybody does it is it just not worth it for most people except those having real lot of money (and usually not needing them right away but wanting to invest them long-term) or those who gotten their money by means other than legal.
Rest of the population doesn't engage in these ways because it's not worth it for them - they do not pay enough taxes to warrant it. Some people, however, pay lots of taxes - so much that it may make sense for them to spend money and go to great length to somewhat reduce their tax bills. They most probably still pay much more tax than average person - just not as much as they could be paying if they didn't use these ways. And there's nothing wrong with that. You could send extra money to your state anytime too, and you probably don't - so why should they?
> it's not worth it for them - they do not pay enough taxes to warrant it
Not only do they pay a larger portion of their fortune, that money makes a much bigger difference to them (us, why do I say them?) in our everyday lives.
> They most probably still pay much more tax than average person
They probably pay much less than what they should. They benefit from from an organized state much more than the average person.
This is not a smart example, since it assumes Somalia has no difference with developed countries except for low taxes. I'm sure if you try hard enough, you could find a better example of low tax countries and compare their business development with high tax countries. If, of course, your purpose is gain better understanding of the matter and not to try sounding witty for cheap without actually having any substance behind it.
As for actual Somalia tax rates, they are kind of hard to find, but we can go other way. Somalia's GDP [1] is estimated around $1 billion, while their state budget is around $200 mln. [2]. Which means in the country the government is about 20% of the economy. Which is pretty close to US figures, surprisingly. More over, if you look up in [2], you will find:
High tax burden with corruption and extortions exacerbates poverty and prevents economic recovery.
So would I believe you saying Somali has low taxes and low regulation, or Somalians who complain about high taxes and oppressive government? Who knows best? Please help me choose.
I don't think it is true. Large corp can afford their own security force and infrastructure (and if you study the history of colonial corporate conquests, that's exactly what they have been doing). Small business or average consumer can afford none of this. Big corp can build their own protected bubble amid a desolated and decaying country, but if you are outside the bubble, you are in trouble.
A villa in the jungle is not what I was talking about. Large corporations benefit from their customers being safe and secure, and from infrastructure to distribute their products. And the companies involved in "colonial corporate conquests" were huge, royally chartered monopolies, directly supported by their countries, and usually acting as their official representative; there was a symbiotic relationship between the monopoly and the state, quite the opposite from an independent existence.
Large, successful corporations virtually always get started only in well-run states, while fruit stands are set up everywhere.
>> Large corporations benefit from their customers being safe and secure
Same way as the small ones do. Maybe even more so - you can find a market for luxury cars even in most brutal dictatorships (in fact, many brutal dictators are known for their love of luxury goods, and so are their henchmen as soon as they are wealthy enough) but trying to establish a small business with stable clientele might be quite hard.
>> there was a symbiotic relationship between the monopoly and the state, quite the opposite from an independent existence.
If you look at the relationship between big banks or insurance companies or resource companies, and governments, "symbiotic relationship" is not a bad description of what is still happening. What is good for GM is still good for the country, and the country spending billions to fix the screwups of GM management is a living proof of it.
> you can find a market for luxury cars even in most brutal dictatorships
But you're unlikely to create a luxury car company in an unstable country.
> trying to establish a small business with stable clientele might be quite hard.
There are plenty of small businesses with stable clientele in Bangladesh, Haiti, Yemen, and pretty much every country in the world.
> "symbiotic relationship" is not a bad description of what is still happening.
I'm not saying it isn't. But you still can't have a large company in an unstable country, while you can easily have a fruit stand there. It is the large businesses that benefit disproportionately from the state.
> Startups - not so much.
Right, you probably need a stable country for startups, too. But most countries don't tax startups much anyway.
> They most probably still pay much more tax than average person - just not as much as they could be paying if they didn't use these ways.
It's about relative value vs absolute value. If you use 30% of your wages toward taxes but the next person use 12% of his to pay the same absolute amount, there is an issue that needs to be addressed.
In my experience, 30% would be extremely high and not at all common - if you look at full rate and not marginal rate. E.g. I am not 1%, but relatively well-paid employee, and my full federal tax rate has been around 13-15% (marginal, of course, quite higher). If I went to some lengths, I probably could shave off a percent or so off it, but that would require me to stash some money into places where they are not readily accessible, such as IRA or alike instruments. This is just not worth it for me. If I got much more money, to the point that I do not need any of the money for consumption and in fact can not consume them - e.g. if I were a billionaire - I would certainly use these and many other instruments, it would be stupid not to do so. But right now it is just not worth the trouble.
I'm not sure what you mean by "corruption of the government", but it is legal because your money belongs to you, not government, and you have full right to do with it whatever you please, including investing them in ways that generate less tax income from the government. Banning that would require implicit assumption that your money do belong to the government and you are restricted in using them only in ways that benefit the said government. That would be corruption to me.
My friend was/is engaged in tax evasion that HMRC have now declared as tax evasion and they'll be taking all that money for the last 5 years, thank you very much.
He/she said the same thing as you are saying now.
The difference between you and the billionaires is that they can afford to make an offer, a la google to the UK.
You are just going to be completely screwed when they come knocking on the door.
The cost isn't in setting them up. The cost is in defending the structures in court when some tax authority feels you're "cheating" the game. Tax authorities lose plenty of cases however, so as long as you didn't do anything illegal and you can afford great lawyers to see a case through, you're good.
That's what shits me. If it's smart, viable strategy, why not make it available by default for every citizen with a basic tax framework instead of something only available to the wealth to push further ahead?
It's an arms race. As corporate income tax receipts dry up countries change their policies. Very wealthy, naturally international companies not only have more resources to compete, they also have the ability to play hard ball and leave the country entirely (see tax inversions of pharmaceutical companies from America to Europe) bringing not just the lost corporate tax, but the income tax on salaries as well.
>by all means that's wrongdoing to me and I think most would be with me on that.
Well, for what it's worth, I don't agree with you.
People are obliged to pay the tax they are legally obliged to pay, and that's it. It doesn't matter how rich or poor you are. Billionaires are not obliged to voluntarily pay more than they are required to. And neither is anybody else. And it really is not a coherent position to claim otherwise, in my view.
Of course it's not necessarily illegal.