Wouldn’t Employees Prefer Permanent Tax Deductions to One-Time Holiday Bonuses?

This is the season for announcing year-end employee bonuses. And two days ago, in response to the bonus announcements of several large American corporations, President Donald Trump tweeted:

Our big and very popular Tax Cut and Reform Bill has taken on an unexpected new source of “love” – that is big companies and corporations showering their workers with bonuses. This is a phenomenon that nobody even thought of, and now it is the rage. Merry Christmas!

Indeed, a few firms have explicitly referenced the Trump Administration’s corporate tax reductions in their bonus announcements. Bank of America’s CEO Brian Moynihan, for instance, wrote to his employees:

I want to highlight the December 20 passage in the United States Congress of the most fundamental tax reform since 1986. When the legislation is signed into law by the President, these reforms will impact our company in different ways. For instance, we will see an immediate reduction in earnings as a result of a write-down of the value of our deferred tax asset. Beginning in 2018, we will see benefits from the tax reform, too, in the form of lower corporate tax rates.

In the spirit of shared success, we intend to pass some of those benefits along immediately. U.S. employees making up to $150,000 per year in total compensation – about 145,000 teammates – will receive a one-time bonus of $1,000 by year-end.

At first glance, this would appear to be a very generous gesture. But did you notice the appearance of the phrase “one-time” in Moynihan’s announcement?

It implies that employees should not expect such bonuses in the future. The reduction in the corporate tax rate, however, is a permanent one.

That raises an interesting public policy question. If President Trump and the Republican Party wanted to shower workers with “love,” shouldn’t they have redirected a portion of the corporate tax cuts to employee tax reductions?

In other words, if these bonuses were designed to serve as pass-throughs of the employers’ new tax benefits to their workers, shouldn’t the federal government have simply reduced the payroll taxes of those very workers?

That way, instead of merely enjoying a one-time bonus, employees could have joined their employers in enjoying permanent tax benefits.

Indeed, any rational employee would prefer a permanent tax reduction to a one-time holiday bonus. But for some reason, President Trump and the Republican Congress decided against sharing their “love” in this manner.

If Corporations Are People, Why Aren’t They Taxed Like People?

Have you been keeping track of the U.S. Republican Party’s proposal to transform the American system of income taxation as it wends its way through the legislative process? If you’re doing so, you may be wondering about the answer to a very simple question:

If the Republican Party truly believes that “corporations are people,” why is it willing to tax corporations at rates that fall so far below comparable personal (or individual) rates?

After all, if corporations are people, one may conclude that they should be taxed like people. Conversely, if they are not, then one may conclude that several recent Republican legislative positions are dissonant in nature.

To elaborate on this question, it may be helpful to review some historical background. And to do so, we may wish to begin with the birth of the American nation in 1776.

In June 1776, for instance, Virginia ratified its Declaration of Rights, a document that later evolved into its State Constitution. The declaration included an assertion that “… all men … have certain inherent rights … namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.

The Declaration clearly drew upon John Locke’s earlier assertion, in his Two Treatises of Government, of an individual’s natural rights to life, liberty, and estate (or property). And at roughly the same time that the colony of Virginia was ratifying its Declaration of Rights, Virginian Thomas Jefferson was defining life, liberty, and the pursuit of happiness as unalienable rights in the American Declaration of Independence.

But did Locke, Jefferson, and their peers intend to imply that business organizations also possess these unalienable rights? Or were they strictly referring to rights that are held by individuals?

Their writings appear to be focused on individual rights. Nevertheless, the U.S. Republican Party now supports the libertarian position that corporations are associations of individuals. Thus, consistent with recent U.S. Supreme Court decisions, certain human rights that are held by individuals can be aggregated into rights that are held by associations of individuals, and thus by corporations.

That’s why, during the 2012 Presidential campaign, candidate Mitt Romney declared that “corporations are people” in regards to the legal rights of corporations. Despite subsequent public criticism of Romney’s declaration, he was accurately describing the Supreme Court’s position in various decisions (such as the Citizens United and Hobby Lobby cases) that confirmed the existence of corporate rights.

In a fiscal sense, President Ronald Reagan’s earlier Tax Reform Act of 1986 also established a rough equivalence between corporations and individuals by bringing the maximum corporate tax rate and the maximum personal rate into rough equality. Specifically, it reduced the nominal corporate rate to 34% and the nominal personal rate to 28%. However, due to the phase-out of personal exemptions, it “topped out” the effective personal rate at 33%.

So how can we summarize these established (or “establishment”) Republican positions? Although the Founding Fathers and their predecessors defined individual rights without explicit reference to corporate rights, U.S. Republican Party leaders from Ronald Reagan to Mitt Romney implicitly or explicitly declared that “corporations are people,” and concluded that business entities should enjoy many of these same rights.

But then what are we to make of the fact that President Donald Trump favors a reduction in the top corporate tax rate to 15.0%? While only supporting a slight reduction in the top individual rate to 35.0% from 39.6%?

That’s a bit inconsistent with the established Republican position, isn’t it? After all, if business corporations possess many of the natural rights of individuals, it is reasonable to believe that they should be taxed as individuals. Instead, the President favors an ostensibly dissonant policy of treating corporations like people on legal matters when it favors business entities to do so, while treating them differently than people on tax matters when it likewise favors the entities to do so.

On the one hand, there may be nothing illegal about such a position. But on the other hand, its natural dissonance may breed a sense of cynicism about a lack of equity in our system of government.

Note: With permission of the author, this essay has also been published by the Public Interest Section of the American Accounting Association.

Hedge Fund Fairness

Do you believe in the fundamental principles of tax fairness? If you do, then you’re in luck. Next year, the American system of income taxation is scheduled to take a significant step in that direction.

But oh, there are so many more steps yet to be taken!

This particular step, though, involves the issue of income and deductions. Under normal circumstances, when an employer pays compensation to an employee, the employer’s expenditure produces a tax deduction. And the employee’s income is subject to taxation.

Except in the world of hedge funds, where many managers function as both employers and employees. Apparently, according to Dow Jones:

For decades, the Internal Revenue Service allowed managers of offshore funds (as employees) to defer receipt of this compensation and both (as employers and employees to) avoid an immediate tax bill and grow the savings tax-free. The IRS generally permits businesses to allow executives to defer compensation because such deferrals lower the firms’ compensation costs, forcing them to pay higher taxes on profits. That offsets income taxes not immediately paid by employees.

That’s pretty dense stuff, isn’t it? In essence, though, the concept isn’t very complicated. The federal government has been allowing hedge fund managers who employ themselves to adopt a pair of tax positions simultaneously. Namely, they have been permitted to avoid paying income taxes on their compensation as employees, and to avoid taking tax deductions as employers.

In theory, the first action decreases government revenue and the second increases government revenue, thereby creating an “offset” effect. But in reality, this “offset” is often only a partial one that ultimately favors hedge fund managers. That’s because the managers can defer income tax payments indefinitely, while investing their compensation in income-producing activities.

So what step in the direction of fairness will be taken next year? Actually, that step was first taken nine years ago. In 2008, in the very heart of the financial crisis, the federal government required hedge fund managers to start paying income taxes in the year they earn their compensation.

But the government then delayed the implementation of that new requirement for ten full years. Thus, it’s finally about to take effect next year.

That will make the tax system more fair, won’t it? Indeed, it will. But many other hedge fund tax loopholes still exist, such as the infamous carried interest treatment of performance fees. That one allows managers to pay low tax rates on compensation, instead of the higher rates that would be incurred in virtually any other industry.

So where do we stand? By all means, we should feel free to celebrate the upcoming victory in the battle for tax fairness. Nevertheless, we should also keep in mind that we aren’t even close to winning the war.

The Border Adjustment Tax

Consider the transcontinental railroads of the late 1800s. The Hoover Dam of the early 1900s. And the moon landings of the late 1900s. America’s federal government has compiled a strong historical record for producing impressive feats of engineering innovation, hasn’t it?

More recently, though, government leaders in Washington DC appear to be more interested in constructing innovative methods of taxation. One such example is the border adjustment tax.

What exactly is a border adjustment tax? Many business news organizations are referring to it as a “complex” mechanism, but it isn’t very complicated in nature. Domestic American manufacturers that sell products within the United States would pay relatively low taxes on their profits. Foreign firms that sell to Americans, however, would pay relatively high taxes.

Meanwhile, domestic American manufacturers that sell products overseas would pay relatively low taxes in the United States. They’d be liable to pay taxes in those overseas jurisdictions, though.

Is this truly a tax innovation? Well, the name “border adjustment tax” is indeed a new moniker. But the mechanism is actually an age-old one. In essence, imported goods would be subjected to import taxes. And exported goods would be granted tax breaks.

That policy is called protectionism; it was first introduced in the United States two centuries ago with the Tariff Act of 1816. Its goal is to utilize tax policy to support domestic manufacturers by driving up the cost of imported goods.

That sounds fairly simple, doesn’t it? Then why don’t all nations practice it? Actually, all do to some extent, but the policy fell out of favor during the Great Depression of the 1930s.

Why? Because the Depression was immensely worsened by the imposition of the Tariff Act of 1930 in the United States. Known colloquially as the Smoot Hawley Tariff after its congressional sponsors, the protectionist tax triggered reprisal laws in many of the world’s leading trade nations.

The result, in retrospect, wasn’t difficult to foresee. When each of the nations within a trading group suddenly decides to make the products of other nations far more expensive for its own citizens, global trade grinds to a halt. Factories close, employees become permanently unemployed, and markets crash.

That’s a grim scenario, isn’t it? Although the Great Depression occurred more than eighty years ago, it would be helpful to remember its economic lesson today.

So the next time a government leader refers to the Border Adjustment Tax as an innovation that can support domestic manufacturers and bolster the national economy, you might want to think about Smoot and Hawley.

And perhaps you’ll also remember that today’s Border Adjustment Tax isn’t really an innovation at all. It might offer some support for domestic manufacturers in the short term, but when foreign governments retaliate in kind, it might again cause the national economies of the world to come tumbling down in the long term.

A Tax Perversity

You may believe that all corporate tax disputes are alike. After all, a dispute generally begins when a firm calculates its liability. Then it forwards a tax payment to a government treasury office.

So what usually happens next? The treasury office assesses the underlying calculation, determines the payment to be insufficient, and demands more money. The company then disputes the assessment and files an appeal in tax court.

That’s not an unusual scenario, is it? But sometimes scenarios do vary. Earlier today, for instance, Apple filed an appeal with European authorities over a tax liability that a government treasury office refuses to collect.

Huh? A treasury office that refuses to comply with its own government authority? How is that possible? Although it’s an incongruous situation, it starts to make sense when one realizes that the government entity hearing Apple’s appeal is different than the government entity that is refusing collection.

You see, the European Union is hearing an appeal about a tax payment that it ordered to be paid to the government of Ireland. Although the Emerald Isle is a member of the European Union, it maintains its own treasury office, independent of the Union. That relationship sets the stage for conflicts of interest between the two government entities.

In this situation, the Irish have been accused of establishing a tax haven for global firms that wish to do business within the European Union. By offering American, Asian, and other firms a foothold in the Union at a lower corporate tax rate than is offered by other E.U. nations, the Irish attract many global business offices and thus broaden their economy.

This puts the European Union in the uncomfortable position of having to level the playing field between its member nations by insisting that each nation maintain comparable levels of corporate taxation. Last year, E.U. regulators found that Ireland was under-taxing Apple, and ordered the Irish to collect over $15 billion in back taxes.

$15 billion, of course, is a major sum for any nation. And for a small country like Ireland, it’s a stupendous windfall. Yet, in order to defend its right to establish such tax arrangements with other global firms, the Irish government has joined forces with Apple to fight the Union’s tax determination.

Win or lose, it certainly is a strange sight for a relatively small government to wage a vigorous battle to avoid collecting billions of dollars in taxes, isn’t it? Indeed, the situation illustrates the perverse incentives that are at play within the Union.

Regardless of the merits of the European Union’s case, one cannot help but wonder whether its tax policy is a bit misguided. After all, every nation in Europe may benefit if the E.U. spends a little less time prosecuting its own member nations for failing to collect taxes, and a little more time trying to eliminate the contradictions that generate such perverse incentives to begin with.

Trump’s Taxes

Four years ago, Republican Presidential candidate Mitt Romney severely criticized 47% of the American people. He said, “These are people who pay no income tax. 47% of Americans pay no income tax.” They are wholly “dependent on government,” and taxpayers will “never convince them they should take personal responsibility and care for their lives.”

So let’s fast-forward four years. Does Romney’s Republican Party still support the notion that people who pay no income taxes are failing to take personal responsibility and care for their own lives?

Apparently not. In response to the New York Times’ story that Donald Trump may not have paid income taxes for two decades, Republican Mayor Rudy Giuliani claimed that “The man’s a genius. He knows how to operate the tax code …” And Republican Governor Chris Christie concurred that “there’s no one who’s shown more genius …” than Trump.

So which position is correct? Is a person an irresponsible, uncaring free-loader when he doesn’t pay income taxes? Or is that person a genius? For some American politicians, the answers to those questions appear to depend on whether the person is an ally or a foe.

Nevertheless, it may be helpful to consider the facts that we actually know about the Trump tax situation. And, in turn, we may consider (or perhaps reconsider) a central presumption that serves as a foundation of our tax code.

Let’s begin with the fact that the Times revealed pages from Trump’s personal tax returns, and not from his business tax returns. That fact casts a harsh light on Mayor Giuliani’s assertion that Trump “had no choice but to utilize” the tax deductions.

Why does Giuliani believe this? Because, according to the Mayor, “If he didn’t take advantage of those tax deductions of tax advantages that he had, he could be sued, because his obligation as a businessman is to make money for his enterprise and to save money for his enterprise.” Furthermore, claimed Giuliani, these plaintiffs would be “investors in his business, people who loan money to his business, banks that loan money to his business.”

That argument would make perfect sense if Trump declined to claim deductions on his business tax returns. After all, his business stakeholders are impacted by the tax liabilities of his business. But his stakeholders are never affected by anything that Trump chooses to claim on his personal tax returns. That’s why the Mayor’s argument is simply not correct.

And yet Giuliani’s argument raises an interesting question. Why does the tax code allow a business loss in one year to eliminate tax payments in other years? Why should one year affect any other(s)?

The answer to that question reflects a fundamental assumption that underlies our tax code. Although we all file taxes on an annual basis, the code does not presume that a year necessarily reflects an appropriate period of time to determine the profitability of a business.

Here’s a simple example. Let’s assume that you open a business on December 30th, and that you spend your first dollar on December 31st. But you don’t earn your first dollar until January 1st.

Have you made a profit during those three days? Well, no; you haven’t done so. Simple arithmetic calculates that a dollar of expense and a dollar of revenue yield no net profit. And thus, based on common sense, you would pay no income tax.

Now let’s assume that your tax year ends on December 31st. For the period ending December 31st, you would file a tax return that shows no revenue and a dollar of expense. And for the subsequent period, you would file a return that shows a dollar of revenue and no expense.

Should you pay any income tax on the dollar of revenue that you earned during the second period? Again, based on common sense, you wouldn’t do so. After all, the December 31st filing cut-off date is an arbitrary one; you still haven’t earned any profit in total during those three days.

This illustrates a core premise of our income tax code. Namely, its tax period cut-offs are arbitrary dates that do not affect the overall profitability of an entity.

Therefore, if a businessman loses $1 billion in a single year but earns $50 million a year during the twenty year period surrounding or following it, he would earn no profit during the entire twenty year period. And he thus needn’t pay income tax on the $1 billion of revenue, given the aggregate $1 billion of expenses in other year(s).

To be sure, it is not correct for Trump’s Republican supporters to say that he could’ve been sued if he had declined to claim his business loss on his personal tax return. And yet it is also not correct for his Democratic opponents to claim that he is not “paying his fair share” of taxes.

So which side is correct? Well, neither side is correct. And in a political year when each side simply wants to win at any cost, it may not be surprising that no one is bothering to ask whether a central tenet of the tax code is itself correct.

The Congressional Busy Season

As you probably already know, the current United States Congress ranks among the most dysfunctional in history. Given its state of inactivity, is it possible that our local legislators might be growing bored and fidgety with all of their free time?

Don’t count on it! Apparently, our elected officials aren’t concerned about their failure to pass productive legislation. Instead, they are spending their time proposing legislation that has no chance to pass into law, and passing legislation that serves no purpose.

Last week, for instance, the U.S. House of Representatives passed H.R. 4890, the IRS Bonuses Tied to Measurable Metrics Act. If enacted into law, it would forbid the Internal Revenue Service from paying any bonus compensation to its employees until it “puts taxpayers first.”

At first glance, of course, one might conclude that this Act is a reasonable one. After all, why should any employee receive a bonus if he doesn’t put his customer, client, or constituent first?

The problem with the proposed legislation, though, is that it bans the payment of bonuses to any IRS employee. In other words, the Service would be unable to recognize, incentivize, or reward any individual employee who wishes to “put taxpayers first.” Under such circumstances, why would any employee actually choose to do so?

The proposed Act itself serves no purpose because President Obama has already declared that he would never sign the legislation. But Congress passed it any way, and then moved on to a proposal entitled No Budget, No Pay. Sponsored by Senator Dean Heller of Nevada, the Act proposes that Congressional leaders should not be paid any compensation when they fail to enact a federal budget into law on a timely basis.

But … hold on! Wait a minute! Didn’t President Obama sign a No Budget, No Pay Act into law three years ago? Well, yes … he did. But it only applied to that single year of budgetary activities. And it didn’t actually require Congress to fund its own budget; it simply required that the legislators pass a resolution to approve one. So Congress proceeded to approve a budget that year, and then never funded it.

Apparently, our legislators are quite fond of “no pay” legislation. But in the case of the IRS law, they proposed it while knowing that there was no chance of it ever becoming law. And in the case of their own budget law, they passed it with terms and conditions that would ensure that they would never actually lose any pay.

Nice, eh? It’s the Congressional busy season, and our legislative leaders are busy at work, doing what they do best.

Are Corporations People?

Corporations are people, my friend.

Four years ago, while campaigning in Iowa for President, Mitt Romney spoke those words to protestors who were angry about low income tax rates on corporations. Romney was saying that corporations are owned by people and employ people, and that their income is ultimately returned to people. Thus, for all intents and purposes, corporations are people.

The principle was later revived when the Supreme Court of the United States outlawed most regulations and restrictions on corporate contributions to political campaigns. They reasoned that corporations (as people) possessed the right to free speech, and thus also possessed the right to speak with their money by making (largely) unregulated and unrestricted donations to candidates.

But the principle that “corporations are people” appears to have its limits. Earlier this month, for instance, Brooklyn based Etsy — the online crafts platform that claims to be building a human, authentic, and community-centric global and local marketplace — initiated a complex tax avoidance strategy. The firm’s United States unit loaned funds to its Irish unit, which then utilized the funds to buy the American unit’s intellectual assets.

Why did Etsy engineer this strategy? Well, Irish corporate income tax rates are lower than American rates. So with Etsy’s intellectual assets now housed in Ireland, any income earned from the use of those assets can be taxed at Ireland’s lower rates.

It’s a nice way to reduce one’s tax bill, isn’t it? You’re probably tempted to replicate it, if possible. Perhaps you can simply tell your employer that you’ve transferred your personal knowledge, skills, and experience to a shadow version of yourself that is based in Ireland. Then your employer can pay your salary to your shadow self, who can (in turn) pay lower income tax rates.

Is this actually possible? Regrettably not. The tax strategy is only available for corporations. Human beings are not eligible to take advantage of it.

And there’s the rub of believing in the principle that corporations are people. On the one hand, it can be utilized by corporations to enable their own tax avoidance strategies and protect their own political lobbying and contribution activities. But on the other hand, people are not permitted to take advantage of many benefits that are routinely granted to corporations.

Today, four years after Mitt Romney spoke those famous words while campaigning in Iowa, many new candidates are seeking a Presidential nomination. Should we be surprised that, unlike Mitt Romney in 2011, today’s Republican Party front-runner is gaining support by charging that corporate interests buy people, instead of claiming that corporations are people?

Connecticut Tax Revolt!

Back in 1991, when Connecticut first introduced an income tax, outraged citizens staged a revolt on the steps of the Capitol Building. Some protestors even spat at Governor Lowell Weicker when he came out to address the mob.

Since that time, however, the citizens of the Nutmeg State appear to have reconciled themselves to the tax. But last week, when the Legislature passed a new state budget that included tax increases, a different group of stakeholders decided to revolt against the government.

Which group did so? Believe it or not, it was a number of the state’s largest and most profitable corporations. Aetna, General Electric, and Travelers, all firms with corporate headquarters in the state, publicly criticized the measure, and the first two firms threatened to move out of Connecticut if the tax increases were voted into law. After a brief delay, the legislators and Governor passed the budget any way.

The most surprising public announcement, though, may have been the one that was made by State House Leader Brendan Sharkey. According to the legislator, GE is “… not paying any taxes (to Connecticut). How much lower can their taxes be … ?”

Huh? Is it possible that General Electric, a profitable global firm with headquarters in Connecticut, is not paying any taxes to the state at all? In response to Sharkey’s comment, a GE spokesperson simply stated that “We don’t disclose taxes paid on a state-by-state basis.”

Nevertheless, the firm has become known for paying extremely low corporate tax rates by taking full advantage of credits, deductions, and other tax reduction opportunities. And Governor Dan Malloy offered further reassurances about the firms’ tax burdens, saying:

“I’ve had conversations with folks at GE over the last few days; I’m sure those will continue. I’ve had discussions with Travelers, I’ve had discussions with the Aetna over the weekend, and will continue to work with those companies about some of their concerns.”

So what does the Governor mean when he says that he will “continue to work” with these firms? Well, the Governor has a track record of granting generous financial benefits to large corporations. Disney’s ESPN sports network, for instance, has received tens of millions of dollars from the state during Malloy’s administration. Cigna and NBC Universal have received similar benefits as well.

In other words, Connecticut’s budget strategy involves maintaining high corporate income tax rates to pay for state expenses, and then negotiating special financial packages to selected employers to ameliorate their tax burdens. Such a strategy may appear to be reasonable at first glance; after all, it delivers tax restitution to the very corporations that currently employ thousands of state residents.

The problem, though, is that this strategy penalizes small and medium sized businesses that do not have the economic heft and political clout to win such government concessions. And future generations of successful companies spring from this entrepreneurial sector of the economy.

On the one hand, by raising taxes on all businesses, and then by striking deals with selected firms, the government of Connecticut might succeed in balancing its budget in the short term. But on the other hand, it might also inadvertently kill off the smaller and more entrepreneurial businesses that represent its long term future.

News Flash: The NFL Pays Taxes!

Did you catch the surprising news about the National Football League (NFL) last week?

No, we’re not referring to any of the results of the college draft. There weren’t any surprises there at all. The top two marquee quarterbacks in the college game, as expected, were selected #1 and #2.

And no, we’re not referring to any announcement about the NFL’s Deflate Gate scandal. No announcement whatsoever was made. Apparently, the League is no rush to release any information about its investigation into that affair.

Instead, we’re referring to the NFL’s announcement that it has decided to start paying income taxes on its earnings. Before last week, it had always opted to avoid any such taxation liability.

But hold on! Wait a minute. Huh? How can that possibly be true?

Why hasn’t the most profitable professional sports league on earth been paying income taxes on its earnings? And why has it been given a choice to “opt in” or “opt out” of the tax system throughout its existence?

Perhaps surprisingly, the American regulatory system permits various types of nonprofit organizations to declare themselves exempt from income taxation, even though they may not serve any social charitable purpose. Under Section 527 of the federal tax code, for instance, political organizations that accept financial contributions on behalf of candidates can file for exemption from income taxes.

Although such organizations may be “profitable” enterprises in a colloquial sense, they (in theory, at least) pass all of their available funds to their favored candidates. Thus, the tax code treats them as pass-through entities, and not as entities that are seeking to earn taxable profits on an independent basis.

Likewise, the NFL has always been treated as a “trade association” entity that exists to help its member teams optimize their profits, and not as an entity that is seeking to optimize its own independent earnings. That’s why the League, for instance, distributes its television revenues to its 32 professional teams.

But why did the NFL agree to start paying taxes on its profits at all? Why didn’t it simply continue its status quo tax exempt arrangement with the Internal Revenue Service? Apparently, because the League has always passed through so much of its revenue to its member teams, its potential tax liability in any given year can be characterized as “a pittance,” and is expected to remain so in the future.

More importantly, by electing to pay annual income taxes, the League can avoid disclosing certain sensitive information to the public. For instance, the salaries of the NFL’s senior officers will no longer be available for public inspection, now that the League is foregoing its tax exempt status.

So although we might be surprised that the NFL will now start paying income taxes, its motivation for doing so should be no surprise at all. After all, it’s not as if the League is acting upon an altruistic desire to contribute more resources to society. Instead, it appears to have chosen to pay taxes as the result of a sober business assessment that the benefit of keeping sensitive information confidential exceeds the cost of any annual tax liability.

Shrewd, eh?