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

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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Member since:

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 Parent Score: 1

kwan_e Member since:

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 Parent Score: 7

unclefester Member since:

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?


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 Parent Score: 0

Yamin Member since:

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 Parent Score: 2