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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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 Parent 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 Parent Score: 2

dionicio Member since:
2006-07-12

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

Reply Parent 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 Parent 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 Parent 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 Parent Score: 4