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.

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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 Parent 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 Parent 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 Parent Score: 3

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 Parent Score: 2