Would you voluntarily pay more tax than you had to?

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The New York Times has caused a bit of a rumpus at eBay by citing them as one of 25 US companies whose CEO’s earn more than the company pays in federal taxes. They were citing data from a report by the Institute for Policy Studies saying that “a variety of shelters, loopholes and tax reduction strategies allowed the companies to average $304 million each in tax benefits”.

eBay appear to have been pretty riled by the report saying “To set the record straight: eBay paid $646 million in taxes in 2010 globally, the vast majority in the U.S. IPS misrepresented our financial reports, and made no attempt to verify the facts with us before publishing inaccurate information. The New York Times story has been corrected.”

Quite frankly I’m a bit bemused by what all the fuss is about. I don’t earn anything near what eBay as a company makes in a year and certainly don’t take home a salary approaching eBay CEO John Donahoe’s $12million pay. I’m also not in the least concerned that eBay may have had a $113 million tax benefit.

I pay an accountant not to evade taxes but to legally avoid paying more in tax than I need to. It’s common sense and if you telephone HMRC to clarify your tax position they themselves will do their best to ensure you don’t pay more tax than is due.

Avoiding taxes makes sense for me, for companies and naturally for eBay too. Just because the world is in a recession doesn’t mean that companies have a moral obligation to over pay taxes due to any national government. In my view it’s the governments fault for allowing loopholes and tax breaks in the first place, but having allowed them it would be poor corporate governance not to take advantage of any tax savings legally available. Plus it saves eBay from having to put up fees and charge me more for running a business, supporting myself and thus benefiting the economy as a whole.

3 Responses

  1. Have to say I’m really sick of the average person whining about the super rich doing things to avoid taxes.

    I’d be willing to bet that the vast majority of us would legally avoid tax if we had the chance. The main problem is that for an average employee there isn’t a big opportunity to do so via PAYE.

    To me it’s simply a matter of the law. If people are illegally evading tax then by all means complain. If they are legally avoiding tax then shut up or complain to the government.

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