Linked by Thom Holwerda on Tue 30th Aug 2016 17:00 UTC
Apple

The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid.

That sound you hear? That's the sound of a house of cards tumbling down.

There's quite a lot of misinformation on the web about this whole thing. First and foremost, the crux of the matter here is that it's the EU's job to protect the internal market, and to ensure that there's a level playing field between its various member states, and it does this through a number of regulations, laws, and codes that member states must adhere to. Whether you, personally, agree with this goal or not is irrelevant; Ireland is part of the EU single market and signed the dotted line - and this comes with the responsibility of implementing, adhering to, and upholding said regulations, laws, and codes.

Second, the EU claims that the special deals the Irish government gave to Apple are a form of illegal state aid; something many other companies have been fined and punished for as well. It's just that with a company the size of Apple, and the extensiveness of the tax-lowering deal Ireland gave to Apple, the illegal state aid easily reaches monstrous proportions.

Third, this isn't some EU manhunt or vendetta specifically targeting American companies; European companies have been fined time and time again for shady practices as well. And, just to be pedantic - technically speaking, Apple itself (the American company) isn't paying these taxes; various European shell companies owned and created by Apple are.

Fourth, there's a distinct and clear public opinion in Europe - and in the US as well, see e.g. the rise and popularity of Bernie Sanders - that seemingly, laws do not seem to apply to the extremely rich and wealthy. The EU and various member state governments - including my own - are starting to adapt to public opinion, taking concrete steps to end these shady tax deals and tax avoidance schemes that allow large, wealthy companies to pay effectively little to no taxes, while us 'normal' people and small business owners pay our fair share.

The main sticking point here is that the EU wants to makes sure that merely being rich and large should not give a company undue benefits that competitors simply cannot compete against. Proper capitalism only works when there's a level playing field where competition is based on merit, and not on who can dangle the biggest sack of money in front of the Irish or Dutch governments.

Apple, in response, published a deeply American (i.e., overtly sappy tugging-at-the-heartstrings nonsense) and cringe-inducing open letter to European consumers, and, of course, the ruling will be appealed. I can't wait until Apple is brought to its knees and forced to pay the taxes it owes for participating in the EU single market and the use of our infrastructure.

Google, Amazon, Starbucks, and everyone else, wherever from - you're next.

Order by: Score:
Too much a complex issue...
by dionicio on Tue 30th Aug 2016 17:36 UTC
dionicio
Member since:
2006-07-12

...for an individual to get a consolidated view of it. But understanding that international taxes should be holistically approached [and finally paid].

Best hopes for all conflicting parts [including Populations with interests at stake].

Reply Score: 1

RE: Too much a complex issue...
by dionicio on Tue 30th Aug 2016 19:04 UTC in reply to "Too much a complex issue..."
dionicio Member since:
2006-07-12

"...It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been."

Obvious here that Apple [or Anyone else] can't be retro-actively taxed.

"...This would strike a devastating blow to the sovereignty of EU member states over their own tax matters..."

Also that economic 'bricks' can't simply reclaim absolute tax sovereignty.

"...A company’s profits should be taxed in the country where the value is created."

And what about the Countries where the expenses are generated? What about the Countries where local competitive or alternative industries are collapsed?

Reply Score: 2

RE[2]: Too much a complex issue...
by l3v1 on Wed 31st Aug 2016 05:54 UTC in reply to "RE: Too much a complex issue..."
l3v1 Member since:
2005-07-06

Obvious here that Apple [or Anyone else] can't be retro-actively taxed.


Firstly, I'd say nothing is obvious here. Secondly, as I see this issue - and it happened before, Apple is not the first company with this issue, and Ireland is not the first EU member state with this issue either -, if a EU state goes into such special deals, which can - and have been - found to be illegal state aids, then either the sate, or the company, or both will eventually be punished/fined/etc. And I think it is good so. No member state and no company is above the laws and regulations these states have accepted to adhere to. I don't really see this as retroactive taxation, more a forced payment of unpaid taxes. It's no excuse really that they followed the rules of a special deal, since that special deal was found to be unlawful, and when they made it, they probably thought about it - they just probably thought they can get more profit out of it than the fines they'll have to pay eventually.

Another thing, some US companies and the US government sometimes seem to think the EU is only there to serve them and follow their lead. Just think of how the current TTIP negotiations are going, especially the stance of the US on several major issues (I won't go into this here).

There are huge benefits for a US company in their presence in the EU, and there would be huge benefits for a successful TTIP as well - however, only if the US in general starts treating the EU as a normal partner, not an ignorant idiot easy to push around (even if they sometimes seem to behave so).

Reply Score: 10

dionicio Member since:
2006-07-12

"- they just probably thought they can get more profit out of it than the fines they'll have to pay eventually."

Indeed there is a lot of 'tax gambling' at the Corporative level, l3v1.

Experience has shown that Fiscal Authority Labor Slots are quite fragile, and Regulation-Enforcing Resources quite scarce, as to resist a little of upstream pressure, or recursing.

So, -up until now- wining bets.

Reply Score: 2

dionicio Member since:
2006-07-12

Fiscal should be a 4th power. Elected. Inherent to Government survival policy. </joke>

Reply Score: 2

RE[2]: Too much a complex issue...
by Vanders on Wed 31st Aug 2016 07:32 UTC in reply to "RE: Too much a complex issue..."
Vanders Member since:
2005-07-06

Obvious here that Apple [or Anyone else] can't be retro-actively taxed.

People get re-assessed for previous tax years all the time.

Edited 2016-08-31 07:32 UTC

Reply Score: 7

The root cause of this is US taxes
by jonsmirl on Tue 30th Aug 2016 17:49 UTC
jonsmirl
Member since:
2005-07-06

If the US would bring the 35% corporate tax rate down to a more reasonable level (it is highest rate in the developed world) US companies would not park all of their profits offshore in places like Ireland.

Note that those profits in Ireland are not free of US tax, Apple owes 35% of their $181B held offshore to the US government. But Apple chooses instead to hold that money offshore and endlessly defer paying US taxes. This grab by the EU is likely to set off a fight with the US which thinks that is their money to tax if they can ever get their hands on it.

Keeping the US Corp tax rate high looks great on paper - let's stick it to those evil corporations. But it doesn't have the effect of collecting huge amounts of money, instead it creates a giant incentive for US corps to leave their money, jobs and plants offshore.

Reply Score: 2

jgagnon Member since:
2008-06-24

No company pays 35%, though, unless it is run by idiots. There are countless ways to reduce that to a very low percentage (and even zero in many cases). A much lower base rate with no deductions would be a boost to tax revenue but suicide for the politicians involved, which is why it will likely never happen.

Reply Score: 7

unclefester Member since:
2007-01-13

No company pays 35%, though, unless it is run by idiots. There are countless ways to reduce that to a very low percentage (and even zero in many cases). A much lower base rate with no deductions would be a boost to tax revenue but suicide for the politicians involved, which is why it will likely never happen.


The problem is that it costs corporations a vast amount of money to reduce those taxes. They need to spend a fortune on lawyer and accountants.

Corporate taxes are just a political stunt to please gullible voters who think that big companies are getting rich a their expense.

Reply Score: 1

kwan_e Member since:
2007-02-18

Corporate taxes are just a political stunt to please gullible voters who think that big companies are getting rich a their expense.


Productivity has increased while wages remain stagnant. If big companies aren't getting rich at their expense, where is all that increase productivity earnings going?

Cutting taxes are just a political stunt to please gullible voters that big companies just want to stop paying taxes and hire more workers because they love society, despite having a history of doing the exact opposite when given those tax cuts.

Reply Score: 7

unclefester Member since:
2007-01-13


Productivity has increased while wages remain stagnant. If big companies aren't getting rich at their expense, where is all that increase productivity earnings going?


Pensions.

Every employee pension fund invests in companies like Apple. That so called "corporate tax avoidance" actually ends up in the pockets of ordinary workers when they retire.

Reply Score: 0

kwan_e Member since:
2007-02-18

"
Productivity has increased while wages remain stagnant. If big companies aren't getting rich at their expense, where is all that increase productivity earnings going?


Pensions.

Every employee pension fund invests in companies like Apple. That so called "corporate tax avoidance" actually ends up in the pockets of ordinary workers when they retire.
"

https://www.washingtonpost.com/news/get-there/wp/2016/04/20/one-of-t...

I mean, we can keep believing fairy tales, or we can look at what actually has happened and will keep happening.

Reply Score: 7

oskeladden Member since:
2009-08-05

Every employee pension fund invests in companies like Apple. That so called "corporate tax avoidance" actually ends up in the pockets of ordinary workers when they retire.


Unclefester, I don't know what the situation with pensions is like in Oz nowadays, but in the UK the median pension pot is a measly £17,500. So if by the 'ordinary' worker you mean the median worker, then they get little to nothing from the ability of companies like Apple to inflate their profits by reducing their tax burden.

The top 20% of workers, in contrast, do get quite a huge benefit in their pension pots from Apple's profits, but it is hard to defend a system on the basis that it provides significant benefits to the top 20%.

Reply Score: 2

unclefester Member since:
2007-01-13


Unclefester, I don't know what the situation with pensions is like in Oz nowadays, but in the UK the median pension pot is a measly £17,500. So if by the 'ordinary' worker you mean the median worker, then they get little to nothing from the ability of companies like Apple to inflate their profits by reducing their tax burden.

The top 20% of workers, in contrast, do get quite a huge benefit in their pension pots from Apple's profits, but it is hard to defend a system on the basis that it provides significant benefits to the top 20%.


The problem is that most pension schemes have contribution levels far too low to be useful. When compulsory superannuation was introduced in Australia in 1990 the average contribution was mere 3% or AUD12/week paid by employers. It has now increased to 11% or an average AUD120 per week.

In Singapore the compulsory pension contributions are a staggering 35.5% of wages. (Average of USD1300/month).
https://en.wikipedia.org/wiki/Central_Provident_Fund

Two of my family members recently retired from the Australian military after 30 years of service. They both have multi-million dollar pension balances because a very large percentage of their remuneration was in the form of retirement benefits rather than salary.

Reply Score: 2

Yamin Member since:
2006-01-10

Just a thought experiment.

It is very possible; I'd say likely that productivity and efficiency has been going up AND companies are not getting rich.

The money has been going towards... lower prices.
People sometimes forget just how low corporate profit margins are; especially at some of the *most hated companies*

you do have some high margin companies. Sometimes these are in tech, but these don't last unless they really keep innovating.

Walmart for all the hate it generates operates at like a 5% profit margin on the goods it sells. Heck, in most places, the government sales tax on your walmart purchase is probably more than the profit walmart gets. It is just so damn efficient. Its competitors of course have had to stream line their operations as well. They had to upgrade their supply chain, make cut throat deals with suppliers...

You also have massive consolidation in the world. This can make individual company numbers sound big. Walmart or whoever earns billions and billions of dollars. Sometimes it is hard to keep in mind that is globally. And yes, this can mean the profit seems large or CEO pay seems large. But a lot of that is just economies of scale.

The CEO of Walmart for example might get 20 million per year.

But how many walmart stores are there in world. A quick google led me to 12000. So that means the CEO of walmart is earning about $1600 per store. if there was such a thing as CEO of one store, that's not a lot of money.

I'm not saying if this is good or bad. My instinct tells me this is very bad locally. That level of efficiency and consolidation can prevent a lot of local wealth. Now you have super efficient operations with a couple global rich CEOs. Previously each community might have had their own local rich guy.

The efficiency is going into us getting more stuff. Tvs are so cheap. When mine has any issue; I just get a new one. I also end up getting some things as higher quality because of the disposable income. I don't know why I get organic bananas, but I do. The sign calls to me. It's like 10c more per pound.

And when the economy isn't generating enough activity, well the powers that be insist we must keep spending. I'm in Canada and we're in a massive housing price increase (low interest rates and massive immigration). I caved and eventually just paid what it costs. I can afford it and the nice banks get a nice cut of my monthly salary.

Cutthroat capitalism isn't something companies like either. Most would like nice stable markets where they can be inefficient and collect the monies.

Reply Score: 2

james_gnz Member since:
2006-02-16

Just a thought experiment.

It is very possible; I'd say likely that productivity and efficiency has been going up AND companies are not getting rich.

The money has been going towards... lower prices.

I think it's a fair point that this is a possible third option.

you do have some high margin companies. Sometimes these are in tech, but these don't last unless they really keep innovating.

I disagree on this though. Innovation isn't the only way that margins can be kept high. Gatekeeping a walled garden can also keep margins high.

Reply Score: 1

CaptainN- Member since:
2005-07-07

This is one of those things that "everyone knows" that simply isn't true - especially when looking at effective tax rates.

Many of the biggest US corporations on balance receive more money from benefits and subsidies than they will ever pay in taxes, which themselves are loop-holed (the loop holes having been written by their own lobbiests in most cases) into a tax-bill of basically $0.

Reply Score: 8

CaptainN- Member since:
2005-07-07

Even aside from the supposedly high tax rates that corporations pay, the individuals that own and run these huge companies pay almost nothing too, taking most of their pay in the form of capital gains instead of wages or salary. Capital gains are taxed at both a lower theoretical rate (the rate know nothings like to quote), but also a much lower actual rate (the rate only their accountants and lawyers know).

Reply Score: 4

jonsmirl Member since:
2005-07-06

You need to do some research....

http://taxfoundation.org/article/summary-latest-federal-income-tax-...

This is for 2013 data, but it is the same every year.

Key Findings
In 2013, 138.3 million taxpayers reported earning $9.03 trillion in adjusted gross income and paid $1.23 trillion in income taxes.

Every income group besides the top 1 percent of taxpayers reported higher income in 2013 than the previous year. All income groups paid higher taxes in 2013 than the previous year.

The share of income earned by the top 1 percent of taxpayers fell to 19.0 percent in 2013. Their share of federal income taxes fell slightly to 37.8 percent.

In 2012, the top 50 percent of all taxpayers (69.2 million filers) paid 97.2 percent of all income taxes while the bottom 50 percent paid the remaining 2.8 percent.

The top 1 percent (1.3 million filers) paid a greater share of income taxes (37.8 percent) than the bottom 90 percent (124.5 million filers) combined (30.2 percent).

The top 1 percent of taxpayers paid a higher effective income tax rate than any other group, at 27.1 percent, which is over 8 times higher than taxpayers in the bottom 50 percent (3.3 percent).

Reply Score: 2

CaptainN- Member since:
2005-07-07

I don't have time to dig through that - my guess is they only show "income tax" and not "capital gains tax" which are usually listed and aggregated separated separately (well okay, some of CG are added into AGI, but it's still taxed at a lower rate), even though they are both technical income taxes. This guess is based on the bar charts which show a much smaller bar for the 1% and 0.1% - that should be much larger if we are talking about the relative capital they control, and not just what they claim as salary at the end of the year. Capital Gains caps out at 15%, much lower (less than half) than the top rate brackets for salary and wages.

BTW, you don't need all this complicated nonsense to understand that the top 1% is taking far more than their fair share of the pie each year - whether it's ineffective taxes or golden parachute, or something else, I suppose it doesn't really matter. If the system were truly progressive (that is, if redistribution was working as is needed in a capitalist system), they would not end up with a greater and greater share of wealth at the end of each year. Boy do they. And the bottom half wouldn't be starved for spending power, wrecking the entire economy. Econ 101 - where's the buyer base? They're broke, that's where.

Edited 2016-08-31 05:44 UTC

Reply Score: 3

jonsmirl Member since:
2005-07-06

This is actual IRS taxes collected, not brackets on paper. Seems pretty progressive to me - top pays 800% higher rate than the bottom. Note that this is just Federal taxes, states like New York and CA each take 12% of the 1%'s income too. New York city takes another 3%.

"The top 1 percent of taxpayers paid a higher effective income tax rate than any other group, at 27.1 percent, which is over 8 times higher than taxpayers in the bottom 50 percent (3.3 percent)."

I do believe that the carried interest loophole needs to be shut. That is allowing many people on Wall Street to convert their income into capital gains - which it is not.

PS - the probabe reason this is at 27% is because the AMT rate is 27%. Very few people are like Warren Buffer and can keep a 15% rate and avoid the AMT. You can see that the average rate collected from the 1% is 27% so for each Buffet at 15% someone else is paying more than 27% to cancel him out.

Edited 2016-08-31 11:42 UTC

Reply Score: 2

CaptainN- Member since:
2005-07-07

BTW, there is no shortage of left leaning think tanks calling out that right leaning think tank for bad math and incorrect unverifiable logic throughout their assertions.

Reply Score: 2

nej_simon Member since:
2011-02-11

The corporate tax rate in Ireland is 12.5% but this story tells us that Apple doesn't even want to pay that.

Reply Score: 9

l3v1 Member since:
2005-07-06

Yeah, funny, that. I don't think anyone would be "angry" about this whole thing if they actually paid that.

"The Commissions's investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003 and about 0.005% in 2014." http://www.bbc.com/news/business-37220799

Will be interesting to see how this will end and how it will affect the other big names that did exactly the same thing as Apple.

Reply Score: 5

jonsmirl Member since:
2005-07-06

You can look up effective tax rates:

http://csimarket.com/stocks/singleProfitabilityRatios.php?code=AAPL...
Apple's is 26% -- with the off-shore parking. If they repatriated it would be much higher.

Facebook's effective rate is more interesting. Last quarter we have data for it is 43.52%.
http://csimarket.com/stocks/singleProfitabilityRatios.php?code=fb&i...

Reply Score: 3

dionicio Member since:
2006-07-12

"...But Apple chooses instead to hold that money offshore and endlessly defer paying US taxes."

Can't get a good reasoning or explanation to allowance in [endlessly] deferring tax payments. Should be an extremely exceptional measure.

Deferring doesn't noting but increasing the chance of default.

Reply Score: 2

jonsmirl Member since:
2005-07-06

You need to ask a tax expert (I am not one) but I believe the US foreign deferral game only works if profits get bigger and bigger each year. If profits start shrinking there is no way to continue deferring and they are forced to start repatriating. Apple has strung together an incredible run of years with increasing profits.

Look at older multinationals like Exxon, they only have minor amounts in deferred taxes.

Reply Score: 3

ssokolow Member since:
2010-01-21

If the US would bring the 35% corporate tax rate down to a more reasonable level (it is highest rate in the developed world) US companies would not park all of their profits offshore in places like Ireland.


Publicly-traded corporations are built on the concept of "fiduciary responsibility to maximize profit". That's the only "moral imperative" and, if the CEO tries to value human morals over that, it's a deriliction of duty and they'll be fired.

This is why companies seek out every way they can to squeeze out an extra buck and, therefore, the only way lowering the corporate tax rate will stop that is if you start a race to the bottom and remain in the lead.

That's the whole point of things like environmental regulation: To convert externalities (technical term) like pollution into items on the balance sheet, so companies will include them in their decision-making rather than "privatizing the gains and socializing the losses".

Reply Score: 5

TM99 Member since:
2012-08-26

Corporate tax rates and economic growth since 1947

This brief examines corporate income-tax rates, and the argument linking low corporate tax rates with higher economic growth. The principal findings are:

Claims that the United States’ corporate tax rate is uniquely burdensome to U.S. business when compared with the corporate tax rates of its industrial peers are incorrect. While the United States has one of the highest statutory corporate income-tax rates among advanced countries, the effective corporate income-tax rate (27.7 percent) is quite close to the average of rich countries (27.2 percent, weighted by GDP).

The U.S. corporate income-tax rate is also not high by historic standards. The statutory corporate tax rate has gradually been reduced from over 50 percent in the 1950s to its current 35 percent.

The current U.S. corporate tax rate does not appear to be impeding corporate profits. Both before-tax and after-tax corporate profits as a percentage of national income are at post–World War II highs; they were 13.6 percent and 11.4 percent, respectively, in 2012.

Lowering the corporate income-tax rate would not spur economic growth. The analysis finds no evidence that high corporate tax rates have a negative impact on economic growth (i.e., it finds no evidence that changes in either the statutory corporate tax rate or the effective marginal tax rate on capital income are correlated with economic growth).


http://www.epi.org/publication/ib364-corporate-tax-rates-and-econom...

Just more libertarian Randian economic sophistry and mythology I am see. ;)

Edited 2016-08-31 03:33 UTC

Reply Score: 6

jonsmirl Member since:
2005-07-06

The effective tax rate does not hit all industries equally. Some industries (like energy) receive great amounts of corporate welfare from the government. Tech in particular does not get much of this corporate welfare.

You can't argue that the US corporate tax rate creates a huge incentives for tech to park profits offshore.

You need to consider this industry by industry since there is huge variance in the impact. For example, you don't hear the energy companies complaining about this.

Reply Score: 2

p13. Member since:
2005-07-10

35% isn't the highest in the developed world.

We (Belgium) pay 35% as well, some nordic states pay more.

Reply Score: 3

jonsmirl Member since:
2005-07-06

Rate in Belguim is 33.99%. It is in the low 20's in all of the Nordic countries.

Reply Score: 2

p13. Member since:
2005-07-10

You're right, my bad, 34%.

Still very high.

EDIT: 34.5 actually for me.

Ref: http://financien.belgium.be/nl/ondernemingen/vennootschapsbelasting...

Edited 2016-08-31 14:03 UTC

Reply Score: 2

darknexus Member since:
2008-07-15

Keeping the US Corp tax rate high looks great on paper - let's stick it to those evil corporations. But it doesn't have the effect of collecting huge amounts of money, instead it creates a giant incentive for US corps to leave their money, jobs and plants offshore.

Couldn't have said it better myself. You've hit the nail firmly on the head.
The main problem is, I think, that people view corporations as evil. Let's break this down:
1. A corporation is a collection of facilities, businesses, departments, and everything that goes with them. These are run by people.
2. A corporation has no consciousness, therefore it cannot be evil.
3. People can be evil, however there really are very few genuinely evil people. Too often what we see as "evil" is people trying to seek the best position for themselves. This is human nature, pure and simple. Without it, we would not have come as far as we have as a species.
4. If someone lives in a system that encourages people to be a certain way, most will do so. It's easier and you are more likely to thrive.
So, put all this together and what do we have? A system that encourages people to put as much of their money outside the country as possible, coupled with people who are just acting the way anybody would act in that situation. It's hardly "evil," just an unfortunate system with nasty consequences. If anything, the people behind the system are the cause of the evil.
So it seems to me that we're left with one option: change the system. Anyone want to tackle that?

Reply Score: 2

dpJudas Member since:
2009-12-10

So it seems to me that we're left with one option: change the system. Anyone want to tackle that?

Good luck with that. There are players in the system that gain on the status quo. We already have the US government crying that Apple was punished - and Ireland sure don't want to budge voluntarily either, as they were bribed with some jobs in Ireland if they'd help screw over the rest of the EU.

The stupid thing is if just everyone could agree on stopping this everyone would be win. Prisoner's dilemma in game theory, I think.

Reply Score: 3

Up next
by jgagnon on Tue 30th Aug 2016 17:52 UTC
jgagnon
Member since:
2008-06-24

From what I understand, Amazon and McDonalds are next.

Reply Score: 3

RE: Up next
by JLF65 on Tue 30th Aug 2016 19:47 UTC in reply to "Up next"
JLF65 Member since:
2005-07-06

Should be Microsoft. They've been taking advantage of the Irish tax dodge longer than anyone else.

Reply Score: 4

nej_simon
Member since:
2011-02-11

I also think that the traditional CEO believes his or her job is the profit and loss, is the revenue statement, the income and expense, the balance sheet. Those are important, but I don’t think they’re all that’s important. There’s an incredible responsibility to the employees of the company, to the communities and the countries that the company operates in, to people who assemble its products, to developers, to the whole ecosystem of the company. And so I have a maybe non-traditional view there

-- Tim Cook


Time to put your money where your mouth is, Tim, and start paying your taxes!

Reply Score: 8

Yamin Member since:
2006-01-10

Just for fun.

He is paying his taxes.
These are global companies.

I guarantee you the workers in Ireland like the jobs that were created with this deal.

I guarantee you the Irish government likes the tax money they got from this deal.

Who 'deserves' the profits from a global company is actually a hard game.

If Apple sells 10 billion dollars worth of phones in India. Who should get that profit? To the American, they should get it as the company is 'American'.
To the Indian, the Indian government should get it as they made the money in India.

Then you have regions, like Ireland who need money and offer deals like this.

hey, I'm in Ontario, Canada and we like our auto industry. We give it plenty of incentives and deals to stay here. I don't know how it all gels with all the free trade deals we signs, but it happens.

Basically; everyone just wants money.

For the record, I'm a big believer is keeping things simple. I prefer to get rid of the corporate tax. Have a sales tax to account for product sales.

Money only leave the company through people. Tax incomes, capital gains, which are already taxed. Increase taxes on the rich here to make up for any lost.

About the only thing left is if a corporation starts hoarding money. You could have a rule to tax it is the money in the bank is greater than 10x annual revenue or something like that.

Reply Score: 2

End of globalization
by xylifyx on Tue 30th Aug 2016 20:58 UTC
xylifyx
Member since:
2008-05-03

This is the beginning to the end of globalization.

What will take over we don't know yet. But this gives an indication. This is an example where the EU tries to assert itself.

The EU must be proactive to protect its interests. We will see the outer borders enforced more rigorously, economic and physical borders. If the EU doesn't, member states will but are unable to do so. This will be the demise of an open Europe.

Reply Score: 1

Cool
by k.g.stoyanov on Tue 30th Aug 2016 21:22 UTC
k.g.stoyanov
Member since:
2005-07-12

Nice, right in the ass!

Reply Score: 2

v EU has no jurisdiction.
by DavidSan on Tue 30th Aug 2016 21:37 UTC
RE: EU has no jurisdiction.
by Thom_Holwerda on Tue 30th Aug 2016 23:13 UTC in reply to "EU has no jurisdiction."
Thom_Holwerda Member since:
2005-06-29

The European Union cannot force a country to raise or lower taxes since they presumably are independent countries.


If EU member states violate the very EU law they themselves signed, the EU most definitely can force said member states into a whole bunch of things.

That's kind of the core tenet of the whole goddamn thing.

Reply Score: 5

v RE[2]: EU has no jurisdiction.
by DavidSan on Wed 31st Aug 2016 08:26 UTC in reply to "RE: EU has no jurisdiction."
RE: EU has no jurisdiction.
by Soulbender on Wed 31st Aug 2016 06:21 UTC in reply to "EU has no jurisdiction."
Soulbender Member since:
2005-08-18

Operating in a EU country means that the EU has jurisdiction. Imaging that, eh?

Reply Score: 6

dionicio
Member since:
2006-07-12

Don't believe the taste of the actual EC Press Release. We are talking here of the most powerful and resourceful executive body of the Union. And They are talking of fiscal year 2003.

Should their procedures been more iterative -from the beginning, this Status Quo should never had happened.

Up to which point the EC could play a victim part in this saga [on behalf of other member Countries], will ultimately depend on the level of secrecy in between Ireland Fiscal Authority and Apple. An outlook of Corporative naiveness doesn't go with them, knowing how well EC play at their field.

Reply Score: 2

Alfman Member since:
2011-01-28

InterestingSmallTalk,

I can't speak for this specific case or the EU, but generally corporations in the US are extremely two-faced about government benefits and taxation. They say they don't want big government, and that's fine to the extent that our needs are being covered by employment. But therein lies the problem: companies are dropping benefits that were once provided to the working class. They have been more than happy to shift the burden of supporting families and retirees towards government programs, but at the same time they get offended when the tax bill comes in. The need for government to provide services is a *direct consequence* a corporations failing to provide them.

https://secure.marketwatch.com/story/retiree-health-benefits-facing-...

http://www.npr.org/sections/health-shots/2014/12/15/370937264/small...

Pretending they get nothing in return is naive and insincere. Companies once paid for academic training, health care, pensions. That has changed in a big way and today's companies have shifted these costs to government. It would be fine, except that now they don't want to pay their taxes either. They don't want to provide the benefits, they don't want to pay taxes, they don't want to raise wages...taken to it's logical conclusion it means that corporations are fine with a decreasing standard of living if it means they can increase profits, and that's not ok.

Here's the thing, corporations are just a means to and end. The goal was never for society to serve corporate interests. If corporations are becoming unwilling or unable to increase our quality of life, then maybe we should be asking if corporations, as a legal construct, have outlived their usefulness to society in their current form.

Edited 2016-08-31 05:00 UTC

Reply Score: 9

dionicio Member since:
2006-07-12

Pace of change on business is Darwinian. On politics, is -well- open, consented, 'democratic'...

This is how it should -surprisingly-.

Reply Score: 2

dionicio Member since:
2006-07-12

[I agree in the actual global mood toward Corporative behavior, Alfman]

Reply Score: 2

dionicio Member since:
2006-07-12

But, you know? A slowly evolved crocodile shouldn't be defenseless confronting a quickly evolved feline.

More disturbed I am about the apparent fragility of Governments confronting Corporative misbehaviors.

Reply Score: 2

mkone Member since:
2006-03-14

InterestingSmallTalk,

I can't speak for this specific case or the EU, but generally corporations in the US are extremely two-faced about government benefits and taxation. They say they don't want big government, and that's fine to the extent that our needs are being covered by employment.


Actually, governments are extremely two-faced about taxation. Governments want to hand-out tax advantages to their chosen winners via loopholes, and complain when the businesses they didn't choose take advantage of them.

But therein lies the problem: companies are dropping benefits that were once provided to the working class. They have been more than happy to shift the burden of supporting families and retirees towards government programs, but at the same time they get offended when the tax bill comes in.


One of the reason this happens is that governments the world over prop up failing enterprises all the time on the back of the successful ones rather than use tax receipts where most companies wouldn't care one way or the other. (see how governments are trying to regulate Uber out of existence through ridiculous means, such as the requirement for Uber to have call centres in London if it wants to operate there - not in the UK, but in London proper).

The need for government to provide services is a *direct consequence* a corporations failing to provide them....

Here's the thing, corporations are just a means to and end. The goal was never for society to serve corporate interests. If corporations are becoming unwilling or unable to increase our quality of life, then maybe we should be asking if corporations, as a legal construct, have outlived their usefulness to society in their current form.


Corporations exist because they serve society's interests. If they didn't, they wouldn't have survived this long. it would be very difficult to devise something to replace corporations that wouldn't look like and behave like corporations without permanently stunting and even reversing growth. If something better existed, it would be here now.

Reply Score: 1

Alfman Member since:
2011-01-28

mkone,

Actually, governments are extremely two-faced about taxation. Governments want to hand-out tax advantages to their chosen winners via loopholes, and complain when the businesses they didn't choose take advantage of them.


No disagreement here. The revolving door between corporations and top government positions compromises objectivity. Government is supposed to serve voters, but all too often it becomes corrupt and puts corporate interests first.

One of the reason this happens is that governments the world over prop up failing enterprises all the time on the back of the successful ones rather than use tax receipts where most companies wouldn't care one way or the other.


For the record, I was against using public money to fund private businesses in the "too big to fail" schemes. They made record profits off of public money and even gave themselves bonuses. It's a travesty.


Whether it's tax loopholes or government kickbacks or preferential policies, one thing is constant - the lower & middle classes always have significantly less representation per capita than the upper classes. I attribute this partly to the fact that congressmen and governors are almost entirely made up of the upper classes with friends in high places. They'll promote populist platforms to get elected, but they revert to self-interest when they get in.


Corporations exist because they serve society's interests. If they didn't, they wouldn't have survived this long.


Corporate survival has nothing to do with serving society's interests. If this was even remotely true then we wouldn't need laws or regulations to provide safe working conditions. Think about that, the fundamental reason that we invent labor laws is because corporate tend to exploit rather than serve. Companies including Apple have no problem outsourcing to places that have terrible labor conditions so they can increase their profits.

If you were to replace "society's interests" with "owner's interests", then I would agree with you.

Reply Score: 4

oskeladden Member since:
2009-08-05

Why should we agree to be taxed?
What value does EU or any other government add?


In the EU, just off the top of my head:
(a) Police and security, so you don't have to worry about armed mobs raiding your warehouse on a regular basis;
(b) Well-maintained roads, so you can actually get your goods from one place to another;
(c) Independent courts and a strong system of private law, so you know your contracts will be enforced quickly and reliably if they are breached;
(d) Reasonably good state-funded education, giving you a good supply of literate workers to choose from without having to spend years training them;
(e) A high standard of living for workers, which is why it is considerably easier to persuade talented employees to move to Dublin than it is to persuade them to move to Bogota

Of course states aren't perfect and I'm no fan of ever-growing government, but it is utterly contrary to facts to pretend that European governments don't give companies anything for their money.

Reply Score: 6

Soulbender Member since:
2005-08-18

They get us into needless wars.

Yeah....and who benefits financially from wars?

They do not protect borders.

Uh..protect them from what and who?

Record your phone location at all times.

No, that would be the telco's. You know, private enterprises.

They fail to protect our private information from hackers

You could argue that protecting your private information is the responsibility of the private entity that is storing it. In fact, that makes perfect sense.

Taxes are not free

Yes? No? WTF? This statement makes no sense.

Edited 2016-08-31 10:24 UTC

Reply Score: 5

Kr1ll1n Member since:
2007-04-28

Brexit showed that EU membership hurts the local economy, if the FTSE 100 is any indication.

http://www.londonstockexchange.com/exchange/prices-and-markets/stoc...

Reply Score: 1

about time
by emphyrio on Wed 31st Aug 2016 02:56 UTC
emphyrio
Member since:
2007-09-11

This rather nicely aligns with the opinion:

https://www.theguardian.com/business/nils-pratley-on-finance/2016/au...

Reply Score: 4

Let Ireland pay the taxes
by libray on Wed 31st Aug 2016 05:05 UTC
libray
Member since:
2005-08-27

Apple is a company
Ireland is the government in this case
If it was Ireland who should have taken in a certain amount of taxes, it is Ireland who should be responsible for raising them.

Apple were following the laws they were given at the time.

Reply Score: 1

RE: Let Ireland pay the taxes
by oskeladden on Wed 31st Aug 2016 10:01 UTC in reply to "Let Ireland pay the taxes"
oskeladden Member since:
2009-08-05

Apple is a company
Ireland is the government in this case
If it was Ireland who should have taken in a certain amount of taxes, it is Ireland who should be responsible for raising them.

Apple were following the laws they were given at the time.


No.

In the EU, the principles contained in the European treaties override national laws. If the Irish government acts in a way which violates the European treaties, it is the European treaties that prevail. This is similar to the way in which federal laws can pre-empt state laws in the US. If a US state granted an unconstitutional benefit to a company, the federal judiciary would almost certainly order the company to pay the benefit back. That is precisely what has happened here.

I have not read the decision as yet, so I express no view on whether it is legally sound. However, I will say that a company like Apple has access to top-notch legal advice, and will be more than aware of the risks of entering into an agreement with the Irish government that potentially violates constitutive treaties of the EU.

Reply Score: 5

Comment by MrHood
by MrHood on Wed 31st Aug 2016 06:52 UTC
MrHood
Member since:
2014-12-02

I can't wait until Apple is brought to its knees and forced to pay the taxes it owes for participating in the EU single market and the use of our infrastructure.

Google, Amazon, Starbucks, and everyone else, wherever from - you're next.


Can't agree more!!

Reply Score: 2

v Innocent before proven guilty
by ThomasFuhringer on Wed 31st Aug 2016 08:12 UTC
Thom_Holwerda Member since:
2005-06-29

Apple followed the rules.


The EU claims they did not.

If the EU Commission has a problem with Irish tax laws, they should take it up with the Irish government.


Which is what the EU is doing right now. They are telling the Irish government to undo the illegal actions.

Actually they should have agreed on that before accepting Ireland as a member.


You have it backwards. Ireland agreed to the very rules the EU is enforcing right now when the country joined.

The rest of your post is just typical European right-wing gibberish, and since you are dead wrong on pretty much everything mentioned above, I doubt you put much thought into writing your comment.

Reply Score: 5

Luxembourg Seems to be Fine..........
by segedunum on Wed 31st Aug 2016 12:22 UTC
segedunum
Member since:
2005-07-06

Jean Claude Juncker's tax haven seems to be above scrutiny...... The EU is breaking up here. Whatever they do causes trouble elsewhere.

Reply Score: 2

EU?...Ireland?
by codewrangler on Wed 31st Aug 2016 15:12 UTC
codewrangler
Member since:
2010-01-28

I guess I'm confused. Ireland is part of the United Kingdom (UK). The UK just voted to exit the EU (European Union). So, Ireland is no longer beholding to the EU.

What business is it of the EU, what deals they make with Apple? Am I missing something here?

Just confused...

Edited 2016-08-31 15:13 UTC

Reply Score: 1

RE: EU?...Ireland?
by zydeco on Wed 31st Aug 2016 15:24 UTC in reply to "EU?...Ireland?"
zydeco Member since:
2009-01-09

Part of Ireland (now known as the Republic of Ireland) left the UK in 1922, and they both joined the EEC (precursor to the EU) in 1973.
While the UK have voted to leave the EU, they haven't started the procedure yet, it'll probably take years.

Reply Score: 3

RE: EU?...Ireland?
by segedunum on Thu 1st Sep 2016 09:16 UTC in reply to "EU?...Ireland?"
segedunum Member since:
2005-07-06

I guess I'm confused. Ireland is part of the United Kingdom (UK).

ROTFL. Errrrr, no.

Reply Score: 2

RE: EU?...Ireland?
by avgalen on Thu 1st Sep 2016 14:57 UTC in reply to "EU?...Ireland?"
avgalen Member since:
2010-09-23

I guess I'm confused. Ireland is part of the United Kingdom (UK). The UK just voted to exit the EU (European Union). So, Ireland is no longer beholding to the EU.

What business is it of the EU, what deals they make with Apple? Am I missing something here?

Just confused...

1. Only a small part of Ireland is part of the UK: https://upload.wikimedia.org/wikipedia/commons/a/a8/Ireland_United_K...
2. The UK hasn't left the EU yet. Technically they haven't even started leaving the EU, they are just mouthing of the EU until they actually start the procedure.
3. So Ireland is still totally beholding to the EU
4. This has nothing to do with what deals Ireland makes with Apple, but everything with what deals Ireland made with Apple. Leaving the EU today doesn't change what you agreed to in the past!

I haven't looked into the specifics of this case, but it looks like this is between the EU and Ireland. Of course for Ireland this will be between them and Apple

Question: Your real name is listed as "Michael McEuin". Do you live in the UK or Ireland?

Reply Score: 2

Hmmm ....
by cade on Thu 1st Sep 2016 02:18 UTC
cade
Member since:
2009-02-28

"Proper capitalism ..." you say ?

The "socialised production" model of the EU (formerly EEC) model is nothing resembling capitalism. The EEC's "socialized production" is one of the major factors that killed certain Greek pre-1980's industry sectors.


It is mentioned ...
"The main sticking point here is that the EU wants to makes sure that merely being rich and large should not give a company undue benefits that competitors simply cannot compete against." ...

The thing is ... the same can be said for "modern" Europe. The trade laws protecting the collectivistic-stance of the EU give undue benefit to nations in Europe that trade with other nations of Europe and penalize nations outside of Europe who trade with nations in Europe. e.g. With the BREXIT scenario, at least England can now have access to a more open economic future, trade with whom they wish without the EU-related financial penalties when doing business with nations outside Europe.

Proper capitalism implies a model of small/lean government with a relatively small tax rate.

When's the last time a poor man paid a wage for a worker ? None.

When's the last time a rich man paid a wage for a worker ? Many times. In this case, many times this would be associated with some one/entity who played the "risk" game and successfully grew a business from virtually nothing (e.g. Apple). This is worth something at the bargaining table and a nation dealing with a large company does have benefits for that nation if that company is able to offer added employment/infrastructure potential to that nation even if the nation itself balances this with a reduced tax rate for that company. I believe this is fine as long as the nation of Ireland has a positive net gain financially/socially/etc. once both sides of the equation are considered. If this Apple/Ireland deal was purely about politicians lining their pockets with money with no benefit to the nation then this is WRONG. Implicit in my stance is the EU tax-stance being chucked-out-the-window.


A "level playing field" can still be achieved by giving more breathing room to startups and not necessarily asphyxiating well-established entities.


My stance is that the wage-based "tax" issue should be up for bargaining and as time goes on by wage-based tax systems in society should be slowly vanishing concomitant with government having a decreasing footprint.

Reply Score: 1

RE: Hmmm ....
by dionicio on Thu 1st Sep 2016 03:18 UTC in reply to "Hmmm ...."
dionicio Member since:
2006-07-12

Capitalism implies little 'igor' governments?

-Yes, Master!

Reply Score: 3

RE[2]: Hmmm ....
by Morgan on Thu 1st Sep 2016 12:27 UTC in reply to "RE: Hmmm ...."
Morgan Member since:
2005-06-29

It's pronounced "Eyegore", Dr. "Fronkensteen".

https://youtu.be/RyU99BCNRuU?t=20

(This is how I perceive the arguments in this entire discussion...a bunch of semantics)

Reply Score: 2