Facebook Tax Bill Over Ireland Move Could Cost $5B • Hacker News Board

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#101

Post by JoshTriplett » Sat, Jul 30, 2016, 7:22 PM UTC

koralatov wrote: post #90

JoshTriplett wrote: post #78

Earlier quoted context omitted.

Millions of retirees have carefully worked out the point at which they can retire based on capital gains, and increasing taxes on it would break that. Perhaps tax income like capital gains, if you want them to match.

It would definitely need a lot of careful though to get the balance right. As it stands, the UK's maximum capital gains tax rate is 28% vs. 45% for the top rate of income tax. This leads to the situation, not at all uncommon or illegal, where a lot of highly paid professionals are the directors of their own limited companies, take no salary, and get all of their remuneration in the form of dividends taxed a maximum r…

I was specifically thinking of the US capital gains structure (see https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_Unite... ); this varies wildly by country. US capital gains taxes are always lower than the corresponding income tax bracket, hence my comment; it looks like UK capital gains are potentially higher than the corresponding income tax bracket for the same amount.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#102

Post by unabst » Sat, Jul 30, 2016, 7:23 PM UTC

sib wrote: post #96

unabst wrote: post #61

Earlier quoted context omitted.

Actually this is not as bad as most people assume. Companies should mostly re-invest, so should have no income. They should only have growth. Taxing profit is taxing the reward (a delusion of money produced after all operations), which is what's suppose to justify it. But taxing growth is taxing the company itself (taxing the operations). Taxing shares or dividends would be taxing rewards. Apple has generated a boatl…

"Amazon being able to escape sales tax early was bad" - they didn't escape it. In fact, they were following the law and acting exactly as traditional catalog retailers did; they charged sales tax to customers located in states in which Amazon has a physical presence. It only became a real political hot button issue when they started getting so big that they became a target.

Following the law doesn't make it not bad. Tax havens are legal and so are corporate tax loopholes. That's why they're holes, not crimes.

It was bad because 1) it was bad for small businesses that had to collect and had a hard time competing on price alone to begin with -- making it impossible to compete. And 2) because sales tax is a huge tax contribution which otherwise the government would have counted on.

And regarding escaping, it was an integral part of their business plan, and they fully intended to fight for it.

> the State of California agreed to a delay of one year before requiring online retailers to begin collecting sales tax on sales to California addresses (Read the whole part on California [1])

Worse yet, Amazon wasn't even profiting in the process. Making Jeff either Satan or a genius (you'll find plenty of stories proclaiming both).

Amazon created jobs and shareholder value. I'll give them that.

---- [1] https://en.wikipedia.org/wiki/Amazon_tax

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#103

Post by thatcat » Sat, Jul 30, 2016, 8:05 PM UTC

tn13 wrote: post #17

maaaats wrote: post #2

How can countries avoid the spiral of death with taxing? I hate how google, facebook etc. makes hundreds of millions in my country, but barely pay taxes. While local companies do.

Why do you think paying taxes is a virtue ? Why does US government need 40% of our hard earned money ? May be American politicians should stop the war on drugs, wars in far off countries and medicare and reduce tax levels to 20%. Facebook, Google, Apple and push the frontiers of human knowledge at rapid rate if they can spend that money themselves. In case of government it will be used to by some junk airforce planes…

> Facebook Google and apple shouldnt be taxed BC theyre r and d

Lol. Most real frontier level r and d is funded by the gov with tax money, especially the not for profit r and d focused on energy and health sectors. The only r and d the tech cos you named do is targeted to make profit for themselves which is why they pay taxes. I agree that a lot of tax money is wasted but some of it is used for critical research.

When facebook starts a non profit division researching better nuclear storage containers and cancer treatments then, maybe that division shouldnt be taxed. I mean these are essentially advertising based businesses, so that's not really pushing the frontiers of human knowledge in a uniformly positive direction.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#104

Post by 1anh2kqowg » Sat, Jul 30, 2016, 8:32 PM UTC

uiri wrote: post #68

refurb wrote: post #36

Earlier quoted context omitted.

That's because they are deferring the taxes on the ex-US money. It's a 401k in the US. It's a tax deferment, not a tax break. If your effective rate went from 35% to 25% due to your 401k contribution, you still end up paying 35%, just not right now.

No, you don't end up paying 35%. Part of the advantages of a 401k come from distributing dollars being taxed at a high marginal rate to another year when they are taxed at a lower marginal rate.

Which, not coincidentally, is also what the companies stashing profits overseas hope to accomplish through future changes in the tax law.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#105

Post by mankash666 » Sat, Jul 30, 2016, 8:41 PM UTC

'Facebook said in the filing that the liability “could have a material adverse impact” on its finances, results or cash flows.' - that's a funny defense, that forcing a company or person to pay taxes that they don't plan to pay, affects their finances.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#106

Post by kuschku » Sat, Jul 30, 2016, 9:18 PM UTC

refurb wrote: post #98

kuschku wrote: post #64

Earlier quoted context omitted.

So you propose we have no social services, schools, etc?

Where did you get that from? Am I suggesting companies don't produce any computers any more? I'm suggesting having gov'ts compete on spending efficiency is a good thing. If I get the same level of services from country A and B and country A's tax rate is 25% lower, then guess where I'm going?

Companies do not care about long-term spending, that’s the thing.

Education only makes an effect 30+years out.

Most companies care about the next quartal, if you’re lucky.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#107

Post by kuschku » Sat, Jul 30, 2016, 9:20 PM UTC

refurb wrote: post #97

kuschku wrote: post #58

Earlier quoted context omitted.

In Singapore it only works because of so little expenses. If Germany would, tomorrow, decide to not provide any services outside of the cities, we could save a lot more taxes, too – and reduce them even further. But there’s some running costs countries have, which you can’t go below. If you want public schools and universities for free that can rival US private elite unis, if you want first-class public transit every…

I would argue Singapore has a significant safety net, good schools and healthcare. Hell, most of the housing is gov't owned.

Yes, but they don’t need to provide healthcare for people living 100km from the next city within of 20 minutes – they don’t have the extreme cost of suburban or rural areas. (which other nations might want to copy)

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#108

Post by jsprogrammer » Sat, Jul 30, 2016, 10:23 PM UTC

jonhankok wrote: post #77

jsprogrammer wrote: post #69

Earlier quoted context omitted.

It is stealing, if it was intentionally undervalued to avoid a tax.

Do you consider it stealing if a bakery takes back bread that was stolen from their store? Taxes are theft by force. Try to skip paying and see how quickly the authorities steal it straight out of your accounts.

No. The money was given to Facebook under the assumption that they would deal fairly.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#109

Post by ciaran0 » Sat, Jul 30, 2016, 11:23 PM UTC

branchless wrote: post #33

rm999 wrote: post #3

>The IRS claims Facebook’s tax adviser Ernst & Young LLP undervalued the company’s property as it was transferred to Facebook Ireland Holdings Ltd. by evaluating pieces of the online platform separately, according to court filings ... “I don’t think Facebook is necessarily hiding anything, but it’s a fight over pricing,” said Stephen Hamilton, a tax lawyer in Philadelphia. “This is what companies do when they transfe…

E&Y denies yet another country tax income. When are govts going to blacklist these guys from govt contracts? The UK was supposed to be excluding such companies.

Ireland has nothing to do with the UK.

Re: Facebook Tax Bill Over Ireland Move Could Cost $5B

#110

Post by Lazare » Sat, Jul 30, 2016, 11:30 PM UTC

sbov wrote: post #27

Lazare wrote: post #14

Earlier quoted context omitted.

> I hate how google, facebook etc. makes hundreds of millions in my country, but barely pay taxes. Figuring out how much a large company makes is complex, which is why we have a very complex system of rules and laws to let us calculate it. And according to those laws, Google, Facebook, etc. don't actually make hundreds of millions in profit in your country. That's why they don't pay taxes, and it's what the linked ar…

Real people disproportionately situated in the US. I'm not sure if that helps any of those other countries. The basic problem is companies using public resources of a country but not paying back into the system.

If you're taking about resources which have usage which is measurable and excludable (postal service, road network, legal system) then charge for use. Amazon relies heavily on the road network to deliver goods; it's trivial (and a good idea in any case) to charge commercial vehicles a fee to cover their wear and tear on the roads, carbon emissions, etc. Similarly, if they're filing legal cases, charge them a fee, etc.

If you're talking not so much about them using actual resources, but benefiting in some vague sense from a country having a functioning police system, even if they don't actually use it, then no, you can't charge them fees. But if they're making sales in your country, you can charge GST/VAT.

But if they're not using actual resources, not making sales in your country, and not making profits...

...then they're not going to be paying back into the system. Even if you really need them too, even if it would be highly immoral for them not to. The existence of a problem doesn't imply the existence of a solution.