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Which argument supports the notion of allowing big businesses to lower their tax overheads? A) Enhancing public trust and transparency B) Stimulating economic growth and job creation C) Exacerbating income inequality and social disparities D) Ensuring government revenue for public services

Which argument supports the notion of allowing big businesses to lower their tax overheads? A) Enhancing public trust and transparency B) Stimulating economic growth and job creation C) Exacerbating income inequality and social disparities D) Ensuring government revenue for public services

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Debate Over Allowing Big Businesses to Lower Tax Overheads The question of whether big businesses should be permitted to lower their tax overheads is a contentious issue that touches upon economic, social, and ethical considerations. Advocates argue that businesses have a fiduciary responsibility to their shareholders to maximize profits legally. Employing tax planning strategies to minimize tax liabilities allows businesses to retain more earnings, which can be reinvested into the company for expansion, innovation, and job creation. Additionally, proponents contend that tax incentives and deductions provided by governments are designed to encourage investment and economic growth, and businesses have the right to take advantage of these incentives within the confines of the law. On the other hand, critics argue that allowing big businesses to lower their tax overheads through aggressive tax avoidance measures can have detrimental effects on society. Such practices can exacerbate income inequality by shifting the tax burden onto individuals and small businesses who may not have the resources to engage in complex tax planning. Moreover, aggressive tax avoidance by big corporations can erode public trust in the fairness and integrity of the tax system, leading to decreased compliance and undermining the government's ability to fund essential public services and infrastructure. Furthermore, there are ethical concerns associated with some tax avoidance techniques employed by big businesses, such as using tax havens and transfer pricing to shift profits to low-tax jurisdictions. Critics argue that such practices may be legal but unethical, as they exploit regulatory loopholes and contribute to the erosion of the tax base, depriving governments of revenue needed to address societal needs. Objective Type Question: Which argument supports the notion of allowing big businesses to lower their tax overheads? A) Enhancing public trust and transparency B) Stimulating economic growth and job creation C) Exacerbating income inequality and social disparities D) Ensuring government revenue for public services
Transcribed Image Text:Debate Over Allowing Big Businesses to Lower Tax Overheads The question of whether big businesses should be permitted to lower their tax overheads is a contentious issue that touches upon economic, social, and ethical considerations. Advocates argue that businesses have a fiduciary responsibility to their shareholders to maximize profits legally. Employing tax planning strategies to minimize tax liabilities allows businesses to retain more earnings, which can be reinvested into the company for expansion, innovation, and job creation. Additionally, proponents contend that tax incentives and deductions provided by governments are designed to encourage investment and economic growth, and businesses have the right to take advantage of these incentives within the confines of the law. On the other hand, critics argue that allowing big businesses to lower their tax overheads through aggressive tax avoidance measures can have detrimental effects on society. Such practices can exacerbate income inequality by shifting the tax burden onto individuals and small businesses who may not have the resources to engage in complex tax planning. Moreover, aggressive tax avoidance by big corporations can erode public trust in the fairness and integrity of the tax system, leading to decreased compliance and undermining the government's ability to fund essential public services and infrastructure. Furthermore, there are ethical concerns associated with some tax avoidance techniques employed by big businesses, such as using tax havens and transfer pricing to shift profits to low-tax jurisdictions. Critics argue that such practices may be legal but unethical, as they exploit regulatory loopholes and contribute to the erosion of the tax base, depriving governments of revenue needed to address societal needs. Objective Type Question: Which argument supports the notion of allowing big businesses to lower their tax overheads? A) Enhancing public trust and transparency B) Stimulating economic growth and job creation C) Exacerbating income inequality and social disparities D) Ensuring government revenue for public services
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