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I think your choice of words here is confusing the issue a little, and would propose “incentive” for a tax break the government would like you to take (employing felons), and “loophole” for tax avoidance the government doesn’t want you to take (eg: sending all your profits to the Cayman Islands).

Given that, if min tax rate is 15% and standard corp tax is 20%, the government is happy for you to get to 15% and would like you to get to there with incentives, but not happy for you to get any lower however you do it. The incentives are generally not powerful enough to get you there anyway



The way the government creates incentives is by creating loopholes

https://smartasset.com/taxes/tax-loopholes

"The basic definition of a tax loophole is a provision in the tax code that allows taxpayers to reduce their tax liability."

And corporations readily exploit loopholes (or incentives if you prefer) to dramatically reduce their tax burden below 15%. See, eg, here:

https://itep.org/amazon-has-record-breaking-profits-in-2020-...

Amazon has enjoyed an effective tax rate of 4.7% over the last 10 years by using tax breaks, tax credits, and depreciation, that have nothing to do with offshoring cash.




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