What is legal and what is moral are two circles in a venn diagram.

In a good and just society there is a large overlap between them, and in others there is less overlap.

But it's impossible to build a legal system where there is a 100% overlap, and it would most likely be a broken society in other ways.

I totally agree with your second paragraph, that the government needs to remove loopholes and other ways for people to weasel out of contributing to society. But there will always be some corruption and a lot of money to be earned by only taking from our shared resources and never contributing back.

Sometimes law is analogised to software; in this analogy, loopholes are bugs.

One who exploits a bug is a hacker. An example of a life-hack is to arrange things to have lower taxation than those who wrote the laws were expecting.

But just as bugs in software are not meant to be exploited even though they can be, there are many loopholes in laws that are not meant to be exploited even though they can be.

Unless the law has a generic catch-all for tax minimisation schemes*, such minimisation may be legal, and yet frowned upon because it wasn't meant to be legal. Or even if it was meant to be legal, but you're rich and the general public thinks you're being unreasonable.

* I think the UK does? Or at least that's what it looked like HMRC was saying last time I was able to file my own taxes there…

That's what the issue is: there are loopholes, and far too many of them. The fact that some people get to deduct costs or have access to tax avoidance loopholes that most people don't have access to, is wrong. And governments don't do enough to fix this.

i think the latest term is 'tax optimisation'...

you could make an argument that in order to optimise your taxes, you have to be quite wealthy to begin with (hiring a tax guy, etc.) - otherwise you don't have any time left in the day to run your business.

so in practice, the little guy winds up just paying the 'sticker price' so to speak, while the big guy has pros who can make their big profits even bigger.

There is nothing wrong with using them. The problem is the mega-wealthy using their wealth to buy these loopholes.

> What on earth is wrong with not paying taxes legally?

The primary anger is at the tax code.

> If the government wants a tax to be paid they need to make it simple and unconditional.

That’s the point. Making people aware of how the tax code is structured and how people take advantage of it is key to building support to change the tax code to what the people want.

If person A lobbies a self-serving loophole into the tax code, it's reasonable for person B to object.

> If there are loopholes or ways to legally avoid it, they will be discovered and people will take advantage of them.

Most loopholes take a certain amount of time and effort to exploit, so they only break even if you are above a certain income level. You don't "write ↑ ↑ ↓ ↓ ← → ← → B A on your 1040, collect $200." That's never how it works. It always takes effort to set up the necessary "excuses," this effort can be expressed as a dollar amount, and your dollar savings typically apply in proportion to your overall income, so a given loophole works AMAZINGLY WELL if you are ultra rich, ok if you are super rich, meh if you are rich, and it has negative expected value if you are not rich.

This is true for many things in life. Look for things expressed as a rate rather than a dollar amount. Then ask "what if the dollar amount that multiplied the rate was really big?"

It’s wrong if it’s not equally accessible

> It is incredibly simple to spin up an LLC or C corp and expense all kinds of things. Employees don’t get this benefit.

> What on earth is wrong with not paying taxes legally?

The issue is who is able to avoid paying taxes. The ability to reduce tax burden is largely possessed by people that make significantly more than the median income, so if you rephrase your question as “What is wrong with low- and median-earners subsidizing the wealthy?” then you’ll see people’s problem with it.

If you're seriously asking why discussions like this exist...

One thing - and this may not be your intent - that often happens is that people will disingenuously use "nobody should do more than they have to" as sleight of hand to point in the direction of "oh it's the law that's bad" with no intent of actually encouraging fixing the tax code.

Another thing is that there's often a big difference between the letter and spirit of a law, since the laws are made by imperfect humans and other humans have FAR more cumulative people-hours available after the law is passed to find holes. There is likely no such thing as a "simple and unconditional" tax law that can't be worked around in ways its authors did not intend. And here this may seem circular - "then the government should patch the hole" - but of course that would be great and yet it is something the government is rarely incentivized to do when people with money give them that money to influence them to not want to.

By and large these loopholes are only accessible to people with enough money to buy islands.

The ultra-rich get tax loopholes and the rest of us have to make up for it with increased taxes and decreased government services.

Taxes are one of those funny defector games, that win you a free shave at the neck when you win to much. You not paying legaly gals the honest suckers who do into funny witchhunts, that when they come around make you wish you did.

The actual functioning of everyday society and quality of everyday life are based on moral grounds. Legal grounds are a backstop, not a hand rail.

Those who exchange moral indulgences, clinging to legal grounds, are naturally and inevitably bound to accept the moral consequences. It's not just your Sunday school teacher making frowny faces at you: It's being afraid of armed robbery at every step because you have squeezed every bit of wiggle room out of every one elses' lives.

Because all the poor people have zero room for creativity because it is designed to be so. The loop holes aren't accidental they are put their on behalf of all the rich people. Users taking advantage of them are part of a systemic swindle on behalf of the rich. Participating in such is therefore both fairly expected and still wrong.

You cannot make them "unconditional" without totally constraining all political freedom. The laws are rules that society imposes on itself. We all expect each other to operate within those bounds fairly, anyone who does not operate like that should be subject to digressional democratic liquidation. That is, forced bankruptcy with a simple majority.

Or if you set up a $10m trust for someone and they abscond with the proceeds.

If you cannot do what the article says, the only reason is that you're not rich enough.

> pay taxes on the profits

There are techniques to show zero profits, or to get tax breaks on these profits. Some of the most successful companies do this.

> taxes owed on a salary you pay yourself.

You don't need to pay anything to yourself. Some of the richest founders proudly say they receive a $1 salary.

This article is literally only about legal means to not pay tax when your company makes a profit

Most investors know how to read a financial statements, selling such a business isn't the hard part. The hard part is keeping the IRS from coming after you for claiming it's a business and not a "hobby."

And yet, a trillion dollar corporation like Apple pays little tax.

QSBS has to be issued directly from the qualifying company. Stock sold on a secondary basis does not qualify.

If you read what I wrote, it doesn't even need to actually be 5 years if the person does some creative stuff with options which I have personally seen.

I saw, I will be keeping a watch if it becomes law.

They don't have an additional capital gains tax, but they still tax you on capital gains. In fact they even tax you specifically on capital gains from savings and investments, but using a fixed assumed percentage gain irrespective of whether your actual gains were lower or higher than that percentage. And they are also going to change that law by 2028 so that it works like any normal capital gains tax. So if you can 10x an investment in the next 2.5 years you might save a bit, but after that it hits you like everywhere else.

If you are a US citizen then US tax will apply to you wherever you are. People form other countries switch off their home tax if they do not meet residency requirements.

There is no capital gains or wealth tax at all in New Zealand, but only for domestic investments. For offshore investments there is a deemed return that you treat as income, so if your wealth is tied up in illiquid stock then it can be dire.

No thanks, I'm OK paying taxes at home.

From what I understand, you are taxed on the unrealized gains from your assets, so you are effectively paying ~2% of the value of all your assets every year. Even if you simply own a stake at a startup, you still have to pay the wealth tax regardless of whether your stake ends up having any real value at all (most likely it won't).

Doesn't the Netherlands have a wealth tax in lieu of capital gains?

Wow for some reason I thought he was 65 already, thanks for the correction

One can access their Roth IRA penalty free starting at 59.5, no need to wait to 65

I would bet it’s LLM generated like most content these days

He was originally a big investor not a founder (or at least set it up to look that way)

You can't anymore because of Thiel. He's the reason they closed the loophole.

This article comments on how tax deductions/exemptions should not exist in the form demonstrated, but way too subtly to be understood by someone so deep in the bullshit.

Education and healthcare get insane amounts of money already. They're not struggling because they're underfunded. If anything they're good motivation to not pay taxes.

They are proposing to raise ours to 15 million person https://news.ycombinator.com/item?id=44471896

14% now

That is "only" ~100k or a so a year and if they aren't in the USA more than ~30 days a year. Small potatoes and arguably makes some sense.

Wouldn't claiming an exemption for foreign taxes that you didn't actually pay be fraud?

When you create your tax id for an LLC, you get two choices on how you want to be taxed. You can choose to tax it as an individual or as an S-corp. There are tax implications and it affects how you do taxes.

I wish. I know several people in person who do this. Read some of the other commenters saying how this is their standard mode of operation and they don't see any problem with any of this.