Are companies such as Amazon, Apple, and Google morally bankrupt because of their attempts to minimize their income tax?
There is a deep underlying problem here. And that problem is called ‘The Income Tax’. Taxing income is the worst sort of tax that there is. First, it is impossible to define ‘income’ consistently because it is typically considered to be 'gross income minus expenses'. But what is an expense? In the United States a Realtor can subtract the cost of car travel from his income. But someone who drives to work and back home cannot. What’s fair
It’s so difficult to determine what’s fair that the income tax code in the US is more than 2,000,000 words long. There’s not a single person in the world who understands it.
The worst thing about it is that it gives almost everyone the idea that just because a person or company earns lots of money, they owe you, me, the country, or the world, money. And why is that? There is no moral reason that they should be taxed just because they earned money.
One could more easily argue the opposite: those individuals and companies that earn money do so because they are providing a product or service that people want.
Rather than tax them on their profits, we should be thankful for such companies, because of the jobs and services that they provide. But an income tax punishes them.
Rather than be envious (a sin) that an honest person or company is prosperous, we should be happy that they were rewarded for their efforts to provide us with their service. And then we might be motivated to work harder, earn more money, and enjoy the fruits of our labor.
I'm glad Apple has a presence in Ireland to try to minimize their income tax. When the income tax rate is 0% for all, I’ll be happy.
You might ask, “But we need taxes, so what’s a good alternative?” We do need taxes, but they need to be moral taxes.
And what taxes are moral? Taxes are moral if they are essentially ‘user fees’ for the use of some government provided service.
For example, a road tax, that charges per mile traveled per weight of a vehicle, is a fair tax. It is a tax that pays for the amount of road used up by a vehicle.
A land tax charged for the private use of land is also a fair tax. Because the owner of land did not create the land, it is appropriate to charge a monthly or yearly land tax, so that the land owner compensates the rest of us for the fact that the owner is given control over that land.
One last example is a natural resource tax on those companies that extract scarce natural resources from the ground. For example, a company might gain the right to extract bauxite, an ore of aluminum, so that they can refine it and sell the aluminum. This is good because aluminum is a metal we need. And it is appropriate to charge a tax per ton of aluminum extracted, because the company did not create the aluminum. So again, the tax compensates the rest of us for the right to extract a natural resource.
Let's get rid of the immoral and unworkable income tax, and replace it with taxes that are moral, and that do not discourage the creation of a product or service.
Tim Farage is a Senior Lecturer in the Computer Science Department at The University of Texas at Dallas, and a former Professor of Mathematics. The views expressed herein are those of the author. Some of his main interests are in online education, and the reconciliation between science and spirituality. You are welcome to comment upon this blog entry and/or to contact him at firstname.lastname@example.org.