The concept of tax avoidance is evil

Apple recently won a tax avoidance case against the EU antitrust regulator. The regulator said that Apple changed its structure so that it was owned by an Irish company so that it would be charged low Irish tax rates. The EU somehow decided that Apple should have paid €13 billion more in tax. Not only is the tax avoidance case against Apple illegitimate, all such cases are inherently illegitimate and the concept of tax avoidance itself is evil.

One problem with the concept of tax avoidance is the idea that paying tax is some sort of moral duty and that the government presumptively owns all of your property. And make no mistake, that’s what tax avoidance actually means. Nobody can spell out any objective standard by which it can be decided whether you have avoided tax. What Apple did was legal, so the law itself is not the standard. The standard is that if the government decides you should pay more tax that is what you should do. If the government decides to steal every single penny you own and all of your fillings, then that is what you should do according to the idea of tax avoidance. If Apple had been lumbered with a €13 billion tax bill it might have been forced to shut factories or stores, or delay or cancel development of some products. People might have been fired because the government suddenly decided to take more of Apple’s money.

Another problem is that the concept of tax avoidance is a breach of the rule of law. Laws are supposed to be laid out in advance and if you don’t break existing laws then you’re not liable. But since everything Apple did to ‘avoid’ tax was legal, the regulator would be punishing them without them breaking the law. Apple couldn’t possibly know in advance whether its actions would be considered tax avoidance.

Another problem in this particular case is that the EU is undermining the independence of member states. The implicit meaning of this case is that Ireland isn’t allowed to lower its taxes to attract investment. Any company that takes advantage of Ireland’s taxes might be punished. So every country in the EU should adjust its taxes to be as high as the highest tax member for that particular category of tax.

The next problem is how exactly Apple is supposed to decide what tax to pay. The law isn’t an adequate guide because Apple didn’t break the law. How is Apple, or any other company supposed to make any decisions about what tax to pay? What exactly is the objective standard by which they are supposed to make the decision? The actual standard is that the government will just take whatever it wants by force and appeal to the greed and stupidity of its subjects to legitimise its actions.

The concept of tax avoidance also creates a conflict between government demands and profitability. Tax avoidance requires that a company should not pay the minimum possible amount of tax. But making more profits requires paying the minimum possible amount of tax. So the concept of tax avoidance creates conflict between companies accused of it and the government. And there is no way of avoiding this conflict because there is no objective standard by which tax avoidance can be decided.

The final point I’m going to make is that tax is money taken by force and force shouldn’t be used except in response to the initiation of the use of force. So the only services for which there could be any case for tax funding is services for defending against the use of force: police, the courts and the military. Governments are demanding so much tax that companies can and should go out of their way to minimise taxes because governments are using taxes for illegitimate purposes. Taxes are used to fund government programs like the welfare state and bank bailouts, neither of which have anything to do with stopping the initiation of the use of force. Taxes are also used to punish peaceful behaviour the government doesn’t like. This includes sin taxes on smoking, drinking and plastic bags. It also includes punishing people for saving. The British government allows people to save a particular amount of money each year tax free. If you save above that amount you are charged tax on any funds you withdraw. This amounts to punishing people for saving ‘too much’ by the government’s standards. I would go so far as to say that tax avoiding companies are heroes for resisting this immoral behaviour by governments.

About conjecturesandrefutations
My name is Alan Forrester. I am interested in science and philosophy: especially David Deutsch, Ayn Rand, Karl Popper and William Godwin.

One Response to The concept of tax avoidance is evil

  1. curi says:

    > If Apple had been lumbered with a €13 billion tax bill it might have been forced to shut factories or stores, or delay or cancel development of some products.

    No. Apple has far more than €13 billion cash on hand (~$194B). Seems like you’re using a standard, generic talking point without checking how it applies to the specific case.

    https://www.cnbc.com/2020/07/30/apple-q3-cash-hoard-heres-how-much-apple-has-on-hand.html

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