Altruism ?

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KARL | 23:32 Wed 22nd Jun 2016 | Business & Finance
3 Answers
We know that, when the option is there, there are people who choose to so arrange their affairs that their tax liability is minimised - to some extent the system is deliberately arranged to expect people to use such options as for example by applying for assessment on a particular basis, declare certain outgoings/expenses, etc. Certainly, within Europe this is the case in most/all countries and is additional to options of moving to a different jurisdiction in order to select their tax circumstances.

Is there anyone reading this who has him/herself decided to deliberately arrange their affairs so as to pay significantly more tax than they would need to pay if they chose to mobilise the options open to them, or do they know someone who has made or is likely to make such a choice ?

To briefly explain: For me this question has nothing to do with tax evasion, hidden offshore/tax haven matters, Panama papers or any such thing. It is the result of knowing someone who chooses to reside in a high-tax country during a very limited period of time (perhaps a year or two but at very most five years) of very high earnings and during it incur a very high tax bill. The employer resides in a country in which the employee has no intention of living and the earnings, all of which he correctly declares where he resides, are simply paid into his account.

He could live anywhere he chooses without any effect on his gross income or his living expenses, his work is done from home and he very rarely (perhaps once a month on average) ventures out of his home. He has in mind to move from one high-tax country to another high-tax country. Just within Europe he could choose any country and the possibility exists to change to as much as 40% less taxation in his case - there are others further afield where his tax bill might fall below 10% in total.

Although there will be different opinions as to which country more deserves a voluntary boost for its coffers, the question has nothing to do with (is unconnected with discussion about) any emotional/ideological national ties/attraction and it purely and simply regards the choice over tax per se.

He appears to think there is some virtue simply in carrying the additional tax burden wherever that is but he refuses to explain it. The suggestion is that the virtue has nothing to do with which country receives the tax payments but he regards as objectionable anyone recommending that he consciously choose to pay less tax than he does. Anyone by choice not paying high/additional tax (i.e. selecting/arranging his/her circumstances to bring this about) is by definition selfish and greedy (no minimum income level stated or implied).

He is a graduate in his twenties and has been working for six years on unspectacular income. He is far from being wealthy or having any immediate prospect of receiving anything but very small amounts of money beyond what he will earn in the coming months and years. Once the period of high income is over it is unknown what he might earn but he is for some time into the future likely to readily be able to find employment at the sort of level he has enjoyed up to now.

If anyone has come across this sort of example then I would truly like to know where the perceived virtue comes from and its form. I am probably missing something, not least a few marbles. Some believe that psychologically this is a secular equivalent to religious extremism and intolerance: sacrificing in order to "serve a higher being/force/ideal" (e.g. crawling a considerable distance to an altar on bare knees, fasting, etc.) - that those who do are better than those who don't. It is a new one to me and since I can't fathom this I turn to AB.


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Wow a synopsis would be nice.

So you are curious as someone seems to choose to reside where his tax bill is, or could be higher than it would be elsewhere.

I suspect only he can tell you what his motives are but (assuming no kind of tax loophole you've missed) I'd suggest one possibility might be:

Instead of considering the situation as, it's his money, that, that nasty government keeps demanding it, and he needs to fight back and limit how much; that instead he has a sense of community, realises that the government has no money but is simply managing the public's communal kitty, and wishes to do right by his fellow citizens by adding a little more for needed public projects and services, as he can afford it.
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Interesting, OG. You thus think the most efficient way to give your money away "to do right by his fellow citizens" is to give it to whatever foreign government demands the most by moving there ?
we dont have enough info to answer
and it doesnt look as tho he will answer

OK 2 countries A and B and least tax bill X and Y
first of all we dont know if his affairs in A are truly the lowest
we dont know what the saving will be ( X minus Y )
and we dont know how much it will cost to shift his affairs into position Y
and we dont know if the msot tax efficient position involves locking in of assets

if I were working for say two years in a high tax country
I probably wouldnt shift my assets into tax efficient position
and then shift them back in two years when I moved back to A

and the reason is GAAR - general anti abuse regulations
started in NZ and becoming popular in the UK

because the shifting twice quickly would show that I was too interested in saving tax and thence possibly trigger GAAR

and not a word o morality in that analysis

Honestly I think he just doesnt want to discuss his tax affairs with you

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