The Double Irish Dutch Sandwich: End of a Tax Evasion Strategy

Fairness, “Overtaxed” Individuals, and Corporate Behavior

• Many argue they’re not angry at firms using complex schemes, but resent that similar tools aren’t available to ordinary workers, whose income is heavily taxed and harder to shift.
• Others counter that corporate avoidance likely contributes to higher effective taxes on regular taxpayers.
• Some see buying corporate stock (directly or via pensions/401(k)s) as a way for individuals to benefit from corporate tax strategies; critics reply that this is unrealistic for many and much less beneficial than properly funded public services.

Redistribution, Role and Size of Government

• One camp stresses that taxation and redistribution fund vital infrastructure and social stability (roads, health, policing, ports), and that “0 taxes” or radically smaller government would make society more unequal and dangerous.
• Another camp focuses on government waste, corruption, and political self‑enrichment, arguing that cutting such “corruption funding” should precede raising taxes.
• Broader ideological debate appears: some defend capitalism as imperfect but superior to communism; others note all systems create elites and “someone gets hosed.”

Tax Avoidance vs. Evasion (and Language)

• Repeated debate over whether the Double Irish–Dutch Sandwich is “avoidance” (legal) or “evasion” (illegal).
• Some insist on a strict legal distinction: avoidance = legal; evasion = crime; “minimization” is just ordinary use of legal options.
• Others claim this distinction is often artificial; complex schemes live in grey areas until courts rule, and some “avoidance” is essentially unprosecuted evasion.
• There is recognition that certain laws (e.g., in the UK) try to treat schemes whose primary purpose is tax avoidance as evasion, but critics note this clashes with policy-driven incentives like tax credits.

Talent Misallocation and High-Paid Tax Work

• Several highlight that top legal/accounting talent is drawn into designing and defending tax schemes instead of more productive or socially beneficial work.
• Some broaden this to finance/crypto and corporate legal/HR departments, arguing they often exist to exploit loopholes and weaken worker and tax protections.
• Others think talent pools are somewhat distinct, though acknowledge incentives steer career choices over time.

Complexity, Cross-Border Taxation, and US-Specific Issues

• Discussion of US rules on citizens owning foreign corporations (forms, GILTI, FATCA) illustrates how anti‑avoidance frameworks create huge compliance burdens even for small, legitimate businesses abroad.
• Some see the US system of taxing citizens on worldwide income for life as overreach and “diaspora tax,” comparing it unfavorably to most countries; others defend it as payment for ongoing benefits of citizenship.
• Renunciation of US citizenship is discussed as a theoretical escape, but commenters note exit taxes, long planning horizons, and possible loss of entry rights.

Reform Ideas and Enforcement

• Proposals include:
  • Simplified tax structures with higher effective rates on wealthy entities.
  • Revenue apportionment: tax a fixed share of global profits based on where sales occur.
  • Stronger minimum taxes (e.g., corporate minimums, AMT) and better IRS enforcement; one data point cites a 16.7% US “tax gap.”
  • General anti‑avoidance rules: treating structures whose main purpose is tax reduction as criminal, though practical wording and enforcement are seen as challenging.
  • Allowing more tariffs and tying tax to clear nexus (where value is created vs. where sold), though EU internal market rules complicate this.

International and EU Context

• Some explore how Ireland and the Netherlands have benefitted via hosting profit‑shifting structures, and whether ending these affects EU budget dynamics.
• Data from the thread: they contribute significantly per capita to the EU budget, though absolute contributions are far below France and Germany.
• Debate continues on whether any “clear” fix to multinational tax avoidance exists; several assert that if there were an easy, non-disruptive solution, it would already be in place.