WTF Lawyers

How do loopholes make things more predictable than no loopholes?

eg - Starbucks using licence agreements to shift profits across borders. If the law said 'you pay corporation tax based on genuine profits then Starbucks would know how much to pay 100%, whereas now they are unsure whether they are going to find a loophole closed or determined illegal.

It's to do with being able to interpret and apply the law in a consistent way. The loopholes exist because the law has not (yet) been tightened up sufficiently. I'd far rather live in a state where everything is permitted unless it is specifically prohibited, and where it is up to the lawmakers to ensure that their prohibitions will achieve their policy objectives, than in a state where courts can say "Oh well, we know the law doesn't actually prohibit what you did, but we happen to think that what you did was wrong and so we are going to bend the law in order to convict you", if you get my drift.

I don't know very much about the Starbucks issues - there may already be some scope for HMRC to rule that what they did was not motivated by a proper business rationale other than straight tax avoidance, in which case that is another example of legislation drafted in a way that gives discretion to the executive and introduces uncertainty. On the other hand, if Starbucks were using a legitmate loophole (albeit a morally or reputationally dubious one) then the uncertainty is only over whether Parliament will see fit to change the law, not over what the law currently says.