TAX DEBATE In the wake of global capitalism, multinational companies have mastered the art of aggressive tax planning. Economic experts reckon that in their quest for maximum self-profitability, global multinational giants have ingeniously created tax avoidance mechanism with help from their professional advisory agencies as well as the mainstream government…
The issue of aggressive tax planning raises the question of ethics. Each of the aforementioned players has a critical role in the arrangement as ensuing thesis underscores. In an attempt to tackle the query at hand, it is important to understand the roots of the economic power plays of the international system. In his discourses, Immanuel Wallenstein discusses political economy of global capitalism. In an attempt to articulate his major argument, Wallenstein develops a theoretical framework, which he calls the World Systems Theory. According to this theory, there is a characteristic structural disparity brought about by capitalism. He espouses that in the political economy of capitalism, the developed economies of the West emerge as the holders of capital since they control the market. Subsequently, the impoverished countries of the third world provide cheap labor and raw materials required to facilitate production. Echoing the same thoughts, Karl Marx had earlier noted that elite nations of the West could not continue to enjoy this prestigious condition without exploiting the poor countries. Information retrieved from the annals of Karl Marx’s ideology dubbed the Communist Manifesto indicates that there are two key players in the power play of the international system: elite individuals and multinational companies. In the political economy of global capitalism, self-preservation is the ultimate goal. For multinational companies, the subjects of this study, aggressive tax planning is one of the devious tactics used to meet this end goal. Role of Key Players in Aggressive Tax Framing As famed global visionary, Steve Jobs once said, with great power comes responsibility. Through aggressive tax planning perpetuated by their lobbyists, strategic planners and advisers with the help of the mainstream government, multinational companies have ignored their responsibility role by shirking away from their duty to care. By ignoring their duty to care, they ignore their ethical duty thus abusing their corporate social responsibility. Their subtle tax circumvention mechanisms are a show of greed and thirst for economic power, which raises ethical concerns. Sources retrieved from Amnesty International indicate, “Starbucks had sales of ?400 million in the UK last year, but paid no corporation tax. Amazon, which had sales in the UK of ?3.35 billion in 2011, only reported a "tax expense" of ?1.8 million And Google's UK unit paid just ?6 million to the Treasury in 2011 on UK turnover of ?395 million.” Economic experts from the Wall Street Journal apportion blame to professional advisory agencies. The professional advisors of the companies themselves have come under fire on the type of advice that they have given which has in turn given rise to the tax avoidance. Key professional services firms such as Deloitte Touche, PricewaterhouseCoopers (PwC), KPMG, and Ernst & Young are equally as guilty as the companies themselves are. Certain experts argue that these advisory agencies are the real culprits. According to the Wall Street Journal, these advisory agencies wilfully mislead and manipulate the companies for their own profitable purposes. Top economists accuse the advisory agencies ...
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“Tax and Ethics Essay Example | Topics and Well Written Essays - 1000 Words - 1”, n.d. https://studentshare.net/finance-accounting/86496-tax-and-ethics.
It is a vital component regardless of what type of government it is; taxation is one of the inherent powers of a government, together with the other two powers implicit to it, which are the power of imminent domain and police power. Hence, every citizen is required to file tax payment forms each year to serve as a reminder of that government power over its citizens.
Implementing of taxes on various transactions of different product categories must be at a level that allows the country an opportunity to achieve the desired objectives in the economic spheres, social programs and defense. Taxation is significant in terms of increasing a country’s reserve amount and regulating business policies, with the aim of maintaining national development and competence at the international scale (Moffat, Bean, & Dewar, 2005, p.45).
Furthermore, there are other credible tax reliefs that may reduce corporations’ tax burdens such as research and development relief. Several players make sure the completeness of the tax system in the UK such as companies, company’s professional advisers, Her Majesty’s Revenue and Customs or the Government.
However, many people, including business executives and some economists, argue that tax avoidance is ethically right. Recently, there has been much controversy over the amount of corporate tax international companies such as Starbucks, Google, and Amazon have paid on their UK operations.
Essay on Ethics My general ethical philosophy is that everyone has the freedom and right to make whatever decisions they deem acceptable. Ethical choices are based on a whole host of different factors, such as personal opinion, societal attitudes, and the circumstances of a given situation.
Businesses need tax planning to help implement strategies that would lessen their tax liabilities for the year ahead. There are numerous tax planning strategies available to business owners. Regardless of how simple or how complex a tax strategy is, it will be based on structuring the business transactions to accomplish anyone or more of the following goals: 1) reducing the amount of taxable income, 2) reducing the tax rate , 3) claiming any available tax credits, or 4) controlling the effects of the Alternative Minimum Tax.
Especially, pursuing the career of tax accountant is an appreciable task as it ensures the overall development of the individual. It also prepares one to retain capabilities required to bear out the maximum benefit of opportunities.
Although the job of tax accountant is
Although taxation should be done on an equal level, government departments are considering a reduction for the middle class and an increase for the wealthy. The changes in tax systems are indicators of economic development of the US and other countries.