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

"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 in reply to "Hmmm ...."
dionicio Member since:

Capitalism implies little 'igor' governments?

-Yes, Master!

Reply Parent Score: 3

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

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

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

Reply Parent Score: 2