How Apple sidestepped a 2013 crackdown on its Irish tax practices • Hacker News Board

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#141

Post by pathseeker » Mon, Nov 06, 2017, 7:43 PM UTC

komali2 wrote: post #5

If you unplugged Apple's board (or given decision-making apparatus) and plugged in a (currently nonexistent) AI with the parameter "Maximize Profit," would you see a different result? I think not. I think we'd see things far more morally horrifying, in fact, with just enough PR makeup to ensure "maximized profit." Unsure why we laud capitalism and then act horrified at the result. Here in America we've made our decis…

>Here in America we've made our decision - profit rules above all else. It is more profitable to lobby congress than it is to upgrade a refinery, it's more profitable to auto-deny every health insurance claim than it is to provide the services your customers think they're paying for, it's more profitable to avoid taxes than not (as long as you can avoid breaking the law TOO hard).

This is not the decision "we've made in America". What you're describing is the behavior of some giant companies. There are millions of small to medium sized businesses that operate within the rules just fine and don't use the "corrupt the politicians" move as part of their business strategy.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#142

Post by kobeya » Mon, Nov 06, 2017, 7:43 PM UTC

cmiles74 wrote: post #130

JumpCrisscross wrote: post #19

Earlier quoted context omitted.

> we should simply make large corporations like Apple actually follow the existing tax laws Apple is in compliance with our tax laws. The laws, not Apple, are the underlying problem.

I don't believe that this is accurate. Apple believes they are in compliance and at this time it appears the US federal government agrees. If the government was to disagree, they could take action and force Apple to comply with the existing tax laws. Apple would have their day in court and precedent would be set. Should Apple win that case, then we'd need to look into creating new laws. I am not convinced that new la…

Companies have had days in court and presidents have been set, even if the name of the defendant was not Apple. This isn't some crazy scheme that Apple's accountants cooked up. Even when the dutch sandwich was new, it was still built from components that individually had case law backing them up.

You don't just get to reinterpret the law because you don't like what effects it has. The courts are only really able to interpret ambiguities. Where the law is clear (and it is pretty clear here), you need to change the laws.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#143

Post by gok » Mon, Nov 06, 2017, 7:43 PM UTC

Oletros wrote: post #93

munk-a wrote: post #80

Earlier quoted context omitted.

First some background... VATs (value added taxes) are pretty solid for distributing this money fairly between the national entities involved in producing this wealth. Currently companies cheat the system a bit to do the bulk of their value adding in nationalities that don't tax it highly (the famous putting stickers on computers in bermuda in apple's case). I think it is fair for a nationality to claim that there is…

VAT is paid by customers, not companies

That's not entirely accurate. Companies do pay VAT, but then can deduct it if they're not the end users. This is unlike sales tax, where only end users are taxed (there's usually no sales tax payment in the sales chain).

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#144

Post by cmiles74 » Mon, Nov 06, 2017, 7:44 PM UTC

lbotos wrote: post #47

DINKDINK wrote: post #31

Point of debate: Why should Apple have the US government lay claim to the revenue/profits that it generates in non US countries? From the article: "This allowed Apple to funnel all its sales outside of the Americas - currently about 55% of its revenue - through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax." If you support the taxation, do you also support th…

Doesn't it already? I've been under the impression that is one of the big "things" about being an American. You will always pay taxes to the US: "If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where yo…

Yes, the US taxes the income of citizen's that live and work abroad. Those citizens' are taxed twice: once by the country they live in and again by the US[0]. From the article:

"If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside."

[0]: https://www.irs.gov/individuals/international-taxpayers/taxp...

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#145

Post by gsnedders » Mon, Nov 06, 2017, 7:44 PM UTC

vixen99 wrote: post #126

nautilus12 wrote: post #38

Earlier quoted context omitted.

No, the spirit of the law is effectively being broken. Sidestepping the law does not constitute following it in my opinion. Laws are meant to be guidelines and legal precedent defines its true extent, you cannot make laws extensive enough to cover every scenario. If they make it illegal to offshore money then apple will simply find a way to establish a corporation on the moon. Its clearly demonstrable that they are g…

A British judge, Lord Hoffman commented ‘The only way in which Parliament can express an intention to impose a tax is by a statute that means that such a tax is to be imposed,’. In other words, for tax there is no distinction between the spirit and letter of the law. They’re one and the same.

English law has three typical means of statutory interpretation: the literal rule (where you literally apply the letter of the law), the mischief rule (where the defendant is clearly guilty of the mischief that the law was intended to address), and the golden rule (where you reinterpret as necessary to avoid an absurd result).

That said, when it comes to most tax law the mischief rule doesn't apply (because in principle it needs to be dealing with a limitation of the common law). The golden rule rarely comes into play with tax law (though consider the case of murdering a parent and the consequences on inheritance tax, for example). So yeah, the literal rule almost always applies.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#146

Post by L_Rahman » Mon, Nov 06, 2017, 7:46 PM UTC

BoiledCabbage wrote: post #63

fredley wrote: post #23

Earlier quoted context omitted.

This is not the fault of Capitalism alone. In a healthy democracy, the people vote in the Government, who can impose fines, tariffs, penalties and such on companies and business practices that the people (via the people they elect) deem to be working against them. Sadly, as you point out, this creates a direct incentive to lobby or otherwise attempt to control Government by large and powerful companies. The only way…

Pure free market Capitalism is playing a game of Monopoly where after each time anyone passes go, the player with the most money gets to create a new rule. Guess what? The game is gonna get pretty skewed, pretty darn fast. Consolidated money is power. The only way that capitalism can work long term is if there are rules actively countering/fighting using that power to change the rules. Money is power and capitalism c…

> each time anyone passes go, the player with the most money gets to create a new rule. Guess what? The game is gonna get pretty skewed, pretty darn fast.

We call that crony capitalism and it is very much the opposite of a free market. I do agree with you however that we don't have effective barriers between money and government (or other forms of) power and therefore the stable state for liberal democracies with capitalist markets is crony capitalism and regulatory capture.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#147

Post by ljf » Mon, Nov 06, 2017, 7:46 PM UTC

ImSkeptical wrote: post #29

mistercow wrote: post #7

Earlier quoted context omitted.

I'm always skeptical when someone precedes "close the loophole" with the word "just", especially when the entity searching for loopholes has hundreds of billions of dollars in cash. Closing loopholes is good, but they'll almost certainly find another one.

We should just keep pursuing the tax loopholes as they are discovered, they should be closed. I also think we should be lowering tax rates in conjunction with this as our tax code becomes more effective.

How about: it would be good if we lowered taxes /except/ for companies that had been abusing loopholes...

Though to be perfectly honest, I'd rather the state used the funds for the betterment of man, but then I'm a boring lefty

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#148

Post by HellDunkel » Mon, Nov 06, 2017, 7:46 PM UTC

RingwormOne wrote: post #24

Don't fault corporations for exploiting legal loopholes to save money... They optimize what they must optimize as operating businesses, and if we the citizens want to compel them to do something we must pass the laws necessary to do so... Stop moralizing the behavior of companies. They aren't humans. If you choose not to buy apple products in reaction to their behavior, great. If you want to convince your friends to…

Agree. But that should not stop us from beeing upset. We must of course focus on the law an closing loopholes. However, this discussion is much broader. A year ago i read a piece by tim cook lamenting about the eu demanding tax. He adressed the public and pointed out that most of the revenue is generated by apples devs in california not the people in irland therefore apples revenues should not be taxed in ireland. This is outrageous- tax is to be paid where money is made.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#149

Post by matt4077 » Mon, Nov 06, 2017, 7:46 PM UTC

jjtheblunt wrote: post #89

canuckintime wrote: post #4

Earlier quoted context omitted.

Or the US Congress could just change the law, close the loophole and require corporations to bring the money home anyway without any tax holidays...

No, they couldn't. The money belongs to foreign corporations also named Apple whatever. That little issue is purposefully glossed over for the sake of sensationalism to sell advertising, of course.

Those foreign corporations named "Apple whatever" are owned, and controlled by "Apple Inc. (forever)". Such conglomerates are usually treated as one for tax purposes, which is why Apple and others can't just create 2500 shell companies each year to take advantage of various "startup" incentives across the world.

That's the sort of knowledge journalists learn in journalism 101, before they advance to their seminar on "sensationalism and selling advertisement" and the group therapy session "some know-nothing on the internet thinks I have anything to do with the BBC's business side, completely ignoring that online advertisement is, like, 0.001% of the BBC's revenue and that, being one of x thousand people working for the BBC, and my articles' revenue going into one big pot with all the others', my personal future is almost completely devoid of anything resembling a link to my articles' readership numbers".

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#150

Post by pmyteh » Mon, Nov 06, 2017, 7:46 PM UTC

javajosh wrote: post #77

sol_remmy wrote: post #30

Earlier quoted context omitted.

If you unplugged the government's board (or given decision-making apparatus) and plugged in a (currently nonexistent) AI with the parameter "Maximize Power of Government," would you see a different result? I think not. ----- My point is that you are implying government is the alternative ("they will govern morally! academics will keep them in check! journalists will keep them in check!") then you need to rethink your…

Government, by definition, has total power over it's space. That power is systematically reduced by the law (every positive individual right is a restriction on government). Reductions (law) are enacted by the people (in the US, the members of Congress are "the people"). If we can speak, if we can vote, then we have, theoretically, the ability to set the dial of government power anywhere from 0 (Somalia) to totality…

Government, by definition, has a monopoly on the legitimate use of force within its territory. But it doesn't (even in theory) have total control over its space. It's constrained by its ability to fund and apply force (military dictatorships aren't inherently stable), by its relationships with stakeholders both inside and outside its borders, and to some extent by the consent (or at least the acquiescence) of its public.

To put it in a more concrete sense, the government can decide to tax whisky at a rate of $1m per barrel. But it almost certainly doesn't have the power to enforce this against moonshiners, rights and law or otherwise.