ethics

Suppose someone said to you tomorrow; “I know of a totally legal way that could save you a couple thousand off of your tax bill next year.” Would you be interested? After all, who likes paying taxes? One hears all the time about the different methods to reducing one’s tax bill. Have a child? You could qualify for a credit. Go to school and pay loan interest? You could qualify for a credit. Have a business or a rental property? You could write off certain expenses and offset some of your income with losses. Tax avoidance (not to be confused with tax evasion) is not only acceptable, but is often considered to be a smart business decision and an essential tactic in today’s personal and business finance environment.

Now consider that you are part of management for a huge multinational corporation (We will call it Z Corp), such as Apple or G.E. Tax planning and tax avoidance would be just one of the several tools in your toolbox when it comes to your strategic responsibilities for the organization. You are also responsible for budgets, financial statements, contracts, investments, and many, many other financial aspects of the organization. Realistically, if you worked for such a large corporation, you would hire tax experts (or employ an internal, dedicated tax department) tasked with assessing the corporation’s income, expenses, corporate structure, and the state, national and international tax laws under which it operates.

As management, perhaps on a given day your tax advisor approaches you and poses the same query as that in my opening paragraph. The offer (which would be scaled to the relative size of an international corporation’s tax burden) might be; “I know of a totally legal way that could save the company billions year over ...

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... number of people. You also believe that the corporation as “self” has a right to self interest as long as it is within the confines of the law. Finally, you acknowledge that tax avoidance strategies are at present widely considered to be smart business decisions and are overwhelmingly supported by individuals and corporations alike. In the case of extreme examples (such as Apple’s and G.E.’s), it could also easily be construed and perceived as corporate greed. Z-Corp’s management realizes, however, that “in business, not only are we faced with questions between right and wrong, but between right and right. We have all experienced situations in which our professional responsibilities unexpectedly come into conflict with our deepest values...we are caught in a conflict between right and right. And no matter which option we choose, we feel like we've come up short."