This is all over the news like something is actually going to come of this.
What can Ireland/EU actually do? Apple is a bigger player in the world economy than Ireland.
Commission says Ireland granted undue tax benefits of up to €13B to Apple
401–410 of 436 posts
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#402Earlier quoted context omitted.
Companies are already taxed on their profits. The hard question is determining what is a profit and where it is located. And share buybacks are returning capital to the owners of the business, which is why they invested in it in the first place. The owners can then make their own choices about how to allocate capital productively.
> Companies are already taxed on their profits In theory. We are having this debate because in practice some are taxed at 20% and others practically nil. I'm arguing for no negotiated tax arrangements, indeed I have been giving thought to a progressive tax regime for companies. That would be interesting to evaluate. > And share buybacks are returning capital to the owners of the business Which is why I am not sure bu…
Companies like Apple achieved a tax rate of almost zero by exploiting the definition of "profits" to argue that they didn't earn more than a trivial amount of profits in any of the countries they operated in. The definition is the problem here.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#403Earlier quoted context omitted.
In-reply-to: ZigZigZag: Once again, it comes down to a question of fairness; you describe Apple's tax deal as if it is a conventional part of fiscal policy where clearly it cannot be treated as such (indeed, if it were, and such tax deals were cut fairly across all corporations in this sector, Ireland would have quite some budgetary problems). The argument is that the deal that Apple brokered would not have been avai…
Ironically, "Fairness for everyone" is the same as "forcing bad outcomes on the individual". Group fairness doesn't trump individual liberties, as long as that individual doesn't harm someone else. What Ireland did with Apple is the same as a company hiring away developers from its competition by paying them more. Does it hurt them? Sure, they lost a talented developer. Is the proper response wage controls? Dear god…
> "Fairness for everyone" is the same as "forcing bad outcomes on the individual".
I contest this unsupported assertion; you provide no argument to back it up. Ensuring a fair marketplace cannot cause "bad outcomes on the individual" for everybody, as this implies nobody benefits from fairness (a.k.a a law-regulated environment) (an everybody-lose situation simply doesn't make sense, otherwise anarchy would have taken hold centuries ago).
> Group fairness doesn't trump individual liberties
... In your humble opinion. This is an ideological statement with no support.
> What Ireland did with Apple is the same as a company hiring away developers from its competition
... Except that it's not the same, as the two are in no way equivalent:
* the labour market is very different to the market for corporate domiciling
* private companies have no necessity to exist; failure (consequent from labour market failure) is acceptable whereas a state's failure (or a diminished form, a state's failure to collect adequate tax revenues) is unacceptable
* The market for corporate domiciling in the EU was regulated and there were regulations in place to prevent this action. There is usually no such regulation in employment law.
So really, the two are not "the same" at all.
> Does it hurt them? Sure
This is in contradiction with your statement "doesn't trump individual liberties, as long as that ... doesn't harm someone else". In this case the poaching company is harming the target company, and so by your argument group fairness ought to trump individual liberties. On the one hand you argue for constrained liberty, and on the other you accept unconstrained liberty. The two aren't compatible on this simple a level.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#404Earlier quoted context omitted.
EU governments, including the Irish one, are free to set different tax rates for different industries. (They are not free to set tariffs but that is because tariffs are a core EU competency as defined in the treaties.) Member states are not free to set different tax rates for different companies . This is part of the deal of joining the EU and has been part of the treaties since the beginning. The only surprising thi…
Ireland did NOT set a different tax rate for Apple or for a specific industry that was basically just Apple. Apple simply structured itself to minimize taxes taking into account the laws at the time. Any company was free to do the same and many did. The structure is so common that there are even two terms that are in standard use to describe this structure, the Double Irish and the Double Dutch. The EU did not sudden…
> Ireland did NOT set a different tax rate for Apple
It allowed Apple to pay an effective rate of tax much lower than that typically required of companies in the sector. De jure, no, they did not set a different tax rate. De facto, yes, Apple paid a significantly lower tax rate.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#405Earlier quoted context omitted.
They can only micromanage your policies if you specifically allow it beforehand. If you follow your line of thought a bit further to its extremes, your home state is not sovereign, because its administration ordered some paper clips from a supplier and is now bound to pay for them, without the senators being asked if they really want to pay. ;-)
> They can only micromanage your policies if you specifically allow it beforehand. A formerly sovereign state can choose to give up its sovereignty to join a larger union, as the U.S. states did and as EU member countries have done. > your home state is not sovereign, because its administration ordered some paper clips from a supplier and is now bound to pay for them, without the senators being asked if they really w…
Which brings it back to square one: Ireland complies with the EU micro-managing (like the the US on the paperclip contract) because it has chosen to waive sovereign immunity from other countries' intervention into its tax policy.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#406The more I read about this the more likely I think this decision could be appealed and overturned.
The initial implication is that Apple specially negotiated a lower tax rate for itself in Ireland. But if you read through the European Commission press release[1], it's not that a special rate was negotiated, but rather Apple Sales International (the Irish Subsidiary) only pays Irish income tax on the portion of its income that comes from within Ireland, which is correct according to Irish tax law. But there's nothing particularly special about this setup that applies only to Apple, and from what I can tell, any other corporation operating in Ireland could have also set up this arrangement and is subject to the same rules.
It doesn't make sense to me that the EU can compel Ireland to collect more taxes from Apple, if according to Irish tax law, they've already paid what they owe for Irish sales, and they don't owe taxes for non-Irish sales. Now, there is a separate question, which is can/should every other EU country go after Apple's local subsidiaries for failing to pay sufficient income tax in their own countries (by transferring the profits over to Ireland)? The answer to that is probably yes. If Apple sells an iPhone in Italy for a profit, it should pay Italian taxes on those profits, and should not be able to avoid Italian taxes by booking the profit in Ireland. This is touched upon in the press release:
> The amount of unpaid taxes to be recovered by the Irish authorities would be reduced if other countries were to require Apple to pay more taxes on the profits recorded by Apple Sales International and Apple Operations Europe for this period. This could be the case if they consider, in view of the information revealed through the Commission’s investigation, that Apple's commercial risks, sales and other activities should have been recorded in their jurisdictions. This is because the taxable profits of Apple Sales International in Ireland would be reduced if profits were recorded and taxed in other countries instead of being recorded in Ireland.
It seems more logical to me to conclude that that Apple doesn't owe more taxes to Ireland, instead they owe more taxes to all the other countries in the world where they operate but have avoided taxes by transferring their profits into Ireland.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#407Earlier quoted context omitted.
Even better question is, where the world would be if evolution wouldn't allow individual organisms to optimize their fitness by taking part in a race to the bottom? That constant pressure to do more with less... deadly. With "beneficial" (sic) mutations like this one you're just ripping other organisms off.
The race to the bottom doesn't optimize fitness though. It relies on being globally unsustainable and just works by parasitically draining all business from the rest of the world. Ireland isn't somehow magically fitter than other countries and thus able to offer 0.005% corporate tax. It's only relying on attracting an above-normal amount of companies by having low taxes and draining other countries of their tax benef…
I fail to see where the analogy breaks, from your description.
It seems to fit like a glove, with ruthless disregard for any kind of sustainability, draining parasitic/symbiotic relationships and all.
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#408Earlier quoted context omitted.
They sell alcohol after all. But fair point. And because the bigger players who can hire expensive accountants can always mask their profits, we shouldn't tax profits. It's too malleable. Hey, even VAT is a better tax.
VAT is not a fair tax, as it favours the rich at the disadvantage of the poor. It's everyone paying the same rate on basic necessities, independent of their financial situation. Sure the rich buy more stuff and thus pay more VAT, but raising VAT doesn't hurt a rich person. It hurts poor people, though.
Not every tax has to be progressive. It's enough to make the whole tax system progressive to achieve overall progressiveness. (Tautologically..)
Income taxes or even refunds or a basic income can fix that up.
VAT is mostly flat.
(I am in favour of taxing land by value for most or even all government expenditure. That's highly progressive, impossible to evade, and does not distort the economy at all: land's supply is fixed.)
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#409Earlier quoted context omitted.
They sell alcohol after all. But fair point. And because the bigger players who can hire expensive accountants can always mask their profits, we shouldn't tax profits. It's too malleable. Hey, even VAT is a better tax.
The bigger players then avoid even more tax without the expensive accountants, with the burden falling upon everybody else, not least private companies whose owners are based locally and rely on taxable dividends for a living.
How are they going to evade VAT or a land value tax?
Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple
#410Earlier quoted context omitted.
Unless you're speaking Irish, please don't refer to the country as 'Eire' - it's akin to referring to Germany as 'Deutschland' in English. It's either 'Ireland' (the country's name in English) or 'Republic of Ireland' (its official description) if you're more comfortable with that.
But, but... Isn't the modern norm to use "native" names wherever possible? Calcutta/Kolkhata, Peking/Beijing and so on? As a token of respect towards actual indigenous cultures.
No. This predates that by decades. Also, our constitution clearly states the specific name of the country in English and Irish. This might seem like a small thing, but it' actually a very important issue to Irish people: https://en.wikipedia.org/wiki/Names_of_the_Irish_state
It's intended as quite the opposite of a token of respect: the purpose of referring to Ireland as 'Eire' (omitting the accent on the initial 'é' too) is to delegitimise the use of the term 'Ireland' to refer to the Irish state.
If actual Irish people wanted the state to be referred to as 'Éire' in English, it'd be one thing, but we don't. In English, it's name is 'Ireland', and in Irish, it's name is 'Éire'. There's also a diplomatic fudge in that there's an 'official description of the state', which is 'Republic of Ireland', which isn't its official name, but which is an acceptable substitute. And yet, incorrect terminology is still used to refer to the Irish state, such as 'Éire' (being used in English) or 'Irish Republic', and sometimes you find particularly ignorant types refer to it as 'Southern Ireland' (which was the name of a failed attempt at a counterpart to Northern Ireland within the UK, but which never gained any legitimacy) and 'The Freestate' (which carries the implication of British dominion over Ireland).
The norm is to use 'native' names where those people want those names to be used. Both Ireland and Éire are native names of Ireland, just in two different languages.