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How Apple sidestepped a 2013 crackdown on its Irish tax practices

bbc.co.uk

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

#321

Post by landryraccoon »

crdoconnor wrote: post #299
landryraccoon wrote: post #297

Earlier quoted context omitted.

Are you arguing that a 100% tax on Apple profits wouldn’t impact their competitiveness? How would they build new factories, develop new products or hire more workers without reinvesting profits into their company? Why wouldn’t a company that can raise more money from capital markets and that has the support of its government quickly overtake Apple’s position?

>Are you arguing that a 100% tax on Apple profits wouldn’t impact their competitiveness? Pretty much. It would render their stock worthless, but there's nothing about a 100% tax on realized profits from preventing a business from operating exactly as before. >How would they build new factories, develop new products or hire more workers With relative ease. Corporation tax is paid only on realized profits. Reinvesting…

> With relative ease.

Yeah, but why would they? Why would any employee or manager have an incentive to do extra work to do so? Where do they get the money from, and more importantly, why would they reinvest the money if there is absolutely no gain to doing so, instead of paying it out to executives and shareholders and just cashing out?

> Corporation tax is paid only on realized profits.

I’m not sure you know what this means. A new factory is an asset, taxes are definitely paid on it if Apple buys a new factory with retained earnings. Are you claiming that a corporation can gain new long term assets without paying any tax unless investors put more money into the business or banks loan them money?

I'm sorry if I sound shocked, but I actually file corporation taxes for a small business. Corporate profits are taxable whether they get paid out to shareholders or reinvested into the company.

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

#322

Post by petre »

cozzyd wrote: post #151
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.

Clearly we need stochastic regulations, where the regulations are chosen randomly from time to time subject to the constraints that they accomplish their policy goals. Just have to change them faster than the accountants can figure out how to exploit them...

That's a terrible idea. You need stable tax regulations in order to make a business plan, get a loan etc. If you kill or drive away the taxpayer you're going to be left without taxes to collect.

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

#323

Post by petre »

tialaramex wrote: post #290
cozzyd wrote: post #151

Earlier quoted context omitted.

Clearly we need stochastic regulations, where the regulations are chosen randomly from time to time subject to the constraints that they accomplish their policy goals. Just have to change them faster than the accountants can figure out how to exploit them...

Several places have what's called a "General anti-avoidance rule". The way this works is, if you think you've got a brilliant wheeze that avoids taxes, you're required to tell the tax officials about it. If you choose not to tell them then they can prosecute for evasion, and if you tell the court actually it was a clever avoidance tactic not evasion the court says hang on, why didn't you obey the General anti-avoidan…

This translates to arbitrary legislation.

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

#324

Post by snowwrestler »

canuckintime wrote: post #4
rrggrr wrote: post #2

If passed, and for a brief period of time, Trump's dollar repatriation tax scheme brings home some of the +2 trillion dollars sequestered abroad - including some of the billions Apple has parked offshore. http://www.businessinsider.com/trump-gop-tax-reform-plan-bil... There's something to be said for Apple's efforts to level the playing field against the favorable tax & public policies under which Samsung and Huawei…

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...

How do you propose forcing a company to move money from one country to another?

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

#325

Post by snowwrestler »

vidarh wrote: post #28
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.

The thing, though, is that their main "loophole" currently consists of "play chicken with the government until someone passes a tax holiday". If you make it clear there will never be a tax holiday, but that you will instead keep adjusting the rules to go after earnings withheld abroad, at some point the rational choice for them will be to bite the bullet and repatriate the income. As it is, the most rational choice f…

Apple is not waiting for anything. They store their money abroad, and they invest it abroad, in foreign manufacturing and foreign retail expansion and foreign R&D and foreign acquisitions. And when domestic investors complain, Apple takes on domestic debt (at very good terms) to fund stock buybacks and dividends.

The idea that U.S. international tax policy is somehow hampering Apple is just not true. There's a big world out there outside U.S. borders.

What it is hampering is U.S. domestic investment and job growth.

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

#326

Post by aqsalose »

RingwormOne wrote: post #131
mrguyorama wrote: post #70

Earlier quoted context omitted.

Every human being in that company should be held accountable for their actions. Someone, somewhere said "Yes let's do it this way", and they committed an (arguably) immoral act by doing so.

Be careful, you're rejecting the rule of law if you advocate for legal repercussions. What you judge to be immoral may not be judged to be immoral by others. When outrage of the masses is the sufficient condition for legal punishment, we have mob rule. Apple should be held accountable by whom? The government? The consumer? Apple did not break a law, so law enforcement cannot hold them accountable. The consumer can de…

> Apple did not break a law, so law enforcement cannot hold them accountable.

I thought the unstated assumption was that the law should be changed, which is certainly within both the letter and spirit of rule of law.

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

#327

Post by sokoloff »

landryraccoon wrote: post #271
deong wrote: post #227

Earlier quoted context omitted.

The US government doesn't, as a general rule, care if the money has ever been here. If you as a private US citizen choose to live and work abroad, you are required to file US income taxes and declare all foreign income. And depending on the precise details of the foreign government's treaty situation and tax rates, you may be required to pay the normal US tax rate on some or all of that income. I don't know that it c…

> If you as a private US citizen choose to live and work abroad, you are required to file US income taxes and declare all foreign income. Do you support this practice though? Does any other country try to tax people for income earned entirely abroad? This puts US citizens at a disadvantage compared to citizens of say, the EU.

The US and Eritrea are the only two.

In practice, the US has tax treaties with most other nations that permit foreign taxes paid (on income that would be taxable federally, so not on wealth taxes) to be taken as a dollar-for-dollar credit. That means that any country with a lower tax rate than the US will generally not increase your overall income tax bill. If you owed $X to a foreign country and $Y to the US for work done in the foreign country, you pay $X to the foreign country (regardless) and if Y is greater than X, you pay $(Y-X) to the US.

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

#328

Post by sanxiyn »

crdoconnor wrote: post #279
osteele wrote: post #269

Earlier quoted context omitted.

>>As a government, raise corporate taxes too high, and corporations leave >Only when there's almost no cost to leaving, which in itself is a tax loophole. If you declare that residency is about where you do the most business and has nothing to do with which letterbox has the word "headquarters" on it then their reaction would be limited to tantrums in Wall Street Journal op eds Or to the other two arms of the disjunc…

>It has to come from somewhere. It can come from owners, workers, or consumers. Owners. It comes from owners. >If it comes from owners, it increases the corporation's cost of capital There is currently an almost absurd overabundance of capital relative to aggregate demand.

It is collected from owners. Tax collection and tax incidence are separate issues. In economics parlance, where tax "comes from" or "falls on" refers to tax incidence, not tax collection.

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

#329

Post by Xylakant »

make3 wrote: post #233
donutdan4114 wrote: post #39

The issue with all of these major companies will forever be their "product". --- From: Silicon Valley (HBO) Jack: Richard, I don't think you understand what the product is. The product isn't the platform, and the product isn't your algorithm, either. And it's not even the software. Do you know what Pied Piper's product is, Richard? Richard: Is... Is it me? Jack: Oh God! No! No. How could it possibly be you? You got f…

wtf does this even mean. companies will always care about profitability for their owners. that's the whole point of starting and having a business

How is this the whole point of starting a business? Elon Musk is often quoted as using Tesla as a mean to promote electric transportation. Corporate structures that may never pay dividends to the owners such as gGmbH (gemeinnützige GmbH) exist and get used in practice. There’s a ton of reasons to start a business, shaving off the absolute maximum in profits is just one.

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

#330

Post by 1123581321 »

tialaramex wrote: post #290
cozzyd wrote: post #151

Earlier quoted context omitted.

Clearly we need stochastic regulations, where the regulations are chosen randomly from time to time subject to the constraints that they accomplish their policy goals. Just have to change them faster than the accountants can figure out how to exploit them...

Several places have what's called a "General anti-avoidance rule". The way this works is, if you think you've got a brilliant wheeze that avoids taxes, you're required to tell the tax officials about it. If you choose not to tell them then they can prosecute for evasion, and if you tell the court actually it was a clever avoidance tactic not evasion the court says hang on, why didn't you obey the General anti-avoidan…

Tax minimization is still possible in such a system if it’s consistently adjudicated. If not, it is subject to regulatory capture and possibly bribes. And the nation executing this scheme still has a target effective tax rate, so the base rates will be adjusted up or down depending on the extent of minimization. I am not sure if you’re presenting this as an solution or a warning. :)
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