Thats why you get some good finance people, to use the system against itself.
Aslong as it is legal great, mabye the UK should fix some tax laws if that is the case, if it is not legal fine them..
Facebook paid £4,327 corporation tax in the UK in 2014
381–390 of 449 posts
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#382No-one expects companies to pay the full whack of tax. But Facebook is taking the piss. They need to be a bit careful, because they risk causing much tighter tax regulation in EU. Citizens don't see this behaviour and think "well done, got one over on the government". Most citizens are infuriated by this scumbag behaviour. And before anyone says "they're just obeying the law" -- we don't know that. They're clearly no…
> No-one expects companies to pay the full whack of tax. I do.
It depends on what is meant by "the full whack of tax".
If your tax bracket is 30%, nobody expects you to pay 30% of your income in taxes. No, that's the top marginal rate, and you have deductions, and so on. This could charitably be put in the same realm -- they're getting all of their loopholes that they're dubiously entitled to.
It's sort of like if a speeding ticket costs $200. But you know you can get away with speeding most of the time. If suddenly we had a perfectly-enforced system where you paid $200 every time you exceeded the speed limit, it wouldn't seem 'fair' even though it is, strictly speaking, 'fair'.
However, to cost the average person the same amount, the amount per offense should really go down if enforcement is perfect.
In the same way, the US corporate tax rate is insanely high, but the actual amount major corporations pay is insanely low.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#383Earlier quoted context omitted.
The best possible tax scheme for poor people would be a wealth tax. Make it a flat wealth tax, and I'm with you: 10% (or whatever) of what you possess, into the community coffers every year. Don't muck around with income, it's too easy to game.
Wealth tax is obviously (I think!) the best kind of tax but the problem with it is it's hard to collect (you would need to assess wealth of everyone and that is a problem).
So if I start my own company I have to give away 10% of that company every year? Because I own shares in my company. And those shares have value. Which contribute to my wealth. That seems terrible!
I don't see how a wealth tax is a good idea at all. If you could recommend a good article that argues why it's good and how it would work I'd love to read it.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#384Trump's solution? Cut the U.S. corporate tax rate to 15% from the current top rate of 35%. This would make corporate inversion unnecessary. I think he also had the idea of capping tax at 10% for companies wanting to bring their money back. At some point you have to ask yourself "why are companies doing this?" and fix the root cause.
Do any presidents actually follow through with what they say during pre-election? Plus a president doesn't even have the power to lower corporate tax by himself anyway.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#385Earlier quoted context omitted.
The loopholes exist because corporations like Apple (but even more so others), lobby for them to exist. It's not like corporations are exploiting some totally neutral loophole they discovered -- those are there on purpose.
Not trying to deny what you say is true, but just out of curiosity, is there any proof that Apple is doing this and how do implementations of this lobbyism look like? Just trying to understand how all this works.
Maybe it's because of coming from a European background, but this kind of questions are quite baffling for me. I know you mean well, but I find that the idea that corporations do this kind of thing doesn't need any more proof than the fact that the earth is round.
If one follows the news, there are constant reminders of this kind of lobbying going on (corporations asking for special treatment, especially when it comes to taxes) for a whole century. Besides a lot of this is done right out in the open. I mean coorporate lobbying was invented exactly for that -- to push governments for favorable laws, special treatment, laxer environmental and other protections, etc. On top of that, there are all kinds of under-the-table deals (with lots of them exposed frequently) with politicians and corporations.
That said, here are some pointers to the issue. First the general Wikipedia article:
A number of published studies showed lobbying expenditures can yield great financial returns. For example, a study of the 50 firms that spent the most on lobbying relative to their assets compared their financial performance against that of the S&P 500 in the stock market concluded that spending on lobbying was a "spectacular investment" yielding "blistering" returns comparable to a high-flying hedge fund, even despite the financial downturn of the past few years. A 2011 meta-analysis of previous research findings found a positive correlation between corporate political activity and firm performance. Finally, a 2009 study found that lobbying brought a substantial return on investment, as much as 22,000% in some cases. https://en.wikipedia.org/wiki/Lobbying#United_States
And the US specific one: https://en.wikipedia.org/wiki/Lobbying_in_the_United_States
The Atlantic: http://www.theatlantic.com/business/archive/2015/04/how-corp...
The Guardian: http://www.theguardian.com/politics/2014/mar/12/lobbying-10-...
National Review: http://www.nationalreview.com/article/421664/corporate-lobby...
Fortune: http://fortune.com/2015/09/04/lobbying-corporate-washington/
Economist: http://www.economist.com/node/21553020
Forbes: http://www.forbes.com/sites/chrisbarth/2011/12/14/29-compani...
Oxford University Press: http://www.amazon.com/The-Business-America-Lobbying-Corporat...
Lawrence Lessig: http://www.amazon.com/Republic-Lost-Money-Corrupts-Congress/...
The Influence Machine: The Influence Machine: The U.S. Chamber of Commerce and the Corporate Capture of American Life
Lobbying America: http://www.amazon.com/Lobbying-America-Politics-Business-Twe...
And those are "establishment" sources -- you'd get far better coverage in more outspoken and critical voices.
Regarding Apple in particular: http://www.theguardian.com/business/2015/jan/21/us-tech-tax-...
http://www.theguardian.com/technology/2014/sep/30/apple-repa...
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#386Earlier quoted context omitted.
There are entire industries with thin margins (e.g. grocery, airline, blue collar services) that would be destroyed if you forced them to pay the same dividends as others. Why are you fixating on share price? Now how are you going to tax LLC, LLP, etc.? Privately traded corps that don't have a market price?
As I said, forcing companies to pay dividends was the parent poster's idea. If anything like that were to be entertained, I'm sure the forced dividends would be in relation to the corporation's profit. As for privately traded corps and partnerships: My proposal was to tax capital gains. This could be done at each realization event, and at that point your transaction will usually have a market price. If you are exchan…
[deleted]
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#387Earlier quoted context omitted.
Let me ask you then, do you think it's right that the tax burden is on those locally-run frozen yogurt places, over the extremely well-off multinationals like Apple? Is that the way you want to see the world run?
I don't think he is saying that at all. Of course Apple is going to use every loophole they find. They are a business and that business is making money. The only way to fix it is to remove the loopholes.
>The only way to fix it is to remove the loopholes.
Or you know, to have the people running the business have a sense of ethics.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#388TIL we pay 10-20x more corp tax than Facebook. Sometimes I feel like a fool, but we've always said from day 1 try to do things as honestly as possible which I'm quite proud of, but there really doesn't seem to be much practical upside apart from not being outed and shamed. First world problem I guess, at least we're turning a profit. It is starting to make me a bit bitter though. For example, we've spent a LOT of tim…
Note that the article, as I read it, only refers to UK taxes. Presumably Facebook also pays taxes in other jurisdictions. (Also note that the headline refers only to corporation taxes. Facebook will also be subject to many other sorts of taxes in the U.K. and a multitude of jurisdictions.
This is not to say, though, that Facebook on the whole pays its fair share of taxes. It probably doesn't, but a person can't draw many reliable conclusions about this on the basis of this article alone.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#389Shameful. Just shameful. I don't care how it gets sugar coated, if you claim to be working for the good of humanity (in facebooks case by connecting people together) and then you loophole yourself out of paying taxes, you are morally bankrupt.
Why do people get mad at the company for not paying more in taxes? I presume they are following the law and paying what is required? Why not get mad at the politicians who created the tax code?
Oh believe me, I'm plenty mad at UK politicians :) But since our current government gained a majority while only actually taking around 37% of the vote, I'm pretty sure we're stuck between a rock and a hard place in actually getting the system changed.
Gonna quote a post from reddit:
"Facebook does do things honestly & by the book. It just so happens that they have a presence in multiple countries around the world. Due to this Facebook Uk® must pay massive amounts to lease the licenses for software & intellectual property from Facebooks conveniently placed HQ in the lowest tax capitals in the world. Doing so at a price Facebook themselves chooses perhaps based on quarterly earning estimates runs at an amazing cost almost siphoning off all profit. So the resulting entity which owns all the IP / leasing then pays tax in the country it is in on its earnings. Now they may be incorperated in a place with minimal corporation tax & simply keep a post office box there, but I assure you that's entirely the focus of their operations & is absolutely not just in place as a tax avoidance tactic. Now if you dislike this you can absolutely tell them it's unacceptable. I'm sure politicians will be telling them off and using them to get press for .. oh 7-14 days until people move on & forget about it. At which point those same politicians won't change anything which impacts the practices at all."
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#390Global companies offshoring profits and not paying enough tax (in the eyes of many countries) was a hot topic at the last G20 summit in Brisbane. This isn't limited to Facebook, as the article explains. The issue and background here is that when large companies operate globally, each country has its own local subsidiary, owned by the global entity. Money is made in each country by selling goods or services. How are t…
Stories like this make me question if corporate tax even makes sense. However well designed, a tax code with today's complexities is going to have holes. If a savings of even one per mill may mean millions, corporations are going to spend insane amounts of money to hire the best experts to use every last loophole. Why don't we cut down everything to a couple of manageable groups that can be tightened down? I think th…
This doesn't solve the globalization problem. Say..an American company such as Walmart goes to a country, kill all their local competition with lower price, and make a ton of profit and then distribute them amongst Walmart shareholders in the U.S.
Sure those shareholders will pay cap gain or personal income, but now since you eliminated corporate tax completely, the net tax revenue of the country wal-mart operates in is no diminished.
This is a great idea to increase the wealth gap between U.S. and the rest of the world, for good or bad. Considering how many international conglomerates are U.S. based.