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Paradise Papers: Dear Tim Cook

projekte.sueddeutsche.de

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Re: Paradise Papers: Dear Tim Cook

#31

Post by wjnc »

jacquesm wrote: post #25
wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

Dear Tim, You don't understand how shares work. Shareholders can only benefit from shares in two ways: through speculation about the share price or through dividends. I'm kind of disappointed that I'd have to explain to a man of your stature that money that Apple parks abroad will not benefit the shareholders except in the most indirect ways. If Apple brought home their overseas funds then it would benefit the US and…

Dear Jacques (i'll stop with the game now ;) - I really emphatise with the social responsibility part of the story. The game Apple is playing with stored cash abroad is abject. Nobody is profiting from that.

But we can agree that it's not the nature of a corporation to pay more taxes than necessary? If people offer you crazy deals: agree. Governments should coordinate not to make crazy offers and perhaps even tit-for-tat those that do.

Re: Paradise Papers: Dear Tim Cook

#32

Post by jacquesm »

wjnc wrote: post #23
jarym wrote: post #11

Earlier quoted context omitted.

Tax evasion IS illegal, tax avoidance is not. That's a legal point that's worth keeping in mind.

Darn, I mixed them up. Fixed it. Local news in the Netherlands is that our tax office gave Proctor and Gamble a few hundred million dollar tax windfall, by error. I don't look angrily upon P&G. They asked for a deal and got a super sweet one. It's the tax offices that mess this stuff up. One European tax office that coordinates these taxes and ruling could solve a lot. Then the mess would be, which country gains the…

You also mis-spelled political.

Re: Paradise Papers: Dear Tim Cook

#33

Post by fastball »

bauerd wrote: post #20
wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

I'm not sure what your argument is. Is it (a) that tax avoidance is morally justified, (b) morally justified only in the business context or (c) not of concern, because the business and the moral are two separate contexts?

I think tax avoidance is morally justified. EDIT: Better phrasing - I think tax avoidance is not a moral problem. Laws are a moral problem, and tax avoidance is not against the law. /EDIT

The entity making the tax code (the government) and the entity that collects taxes (the government) are one in the same. If the government wants me, as an individual or business, to pay taxes at a certain rate X, they should write the tax code so that I need to pay taxes at X%.

I don't think it's anyone's moral responsibility to pay a certain percentage in taxes. From a moral perspective, people have different ideas about what percentage they should pay. If I'm a small business owner, I might believe that my contribution of providing employment to 50 people is enough, without having any moral obligation to pay taxes on top of that.

Or, I could be a hugely wealthy investment banker. I make $1mil a year. But I don't feel morally obligated to pay 30% in taxes because every year I give $300,000 dollars to charity instead. Or this one time I made a $500,000 endowment for the arts.

Taxes and morals are too separate to be linked so easily.

Re: Paradise Papers: Dear Tim Cook

#34

Post by maxhallinan »

wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

I agree that companies are incentivized to pay the least amount of taxes just as they are incentivized to optimize their operating costs in general. I don't think that this letter denies that Apple has a rational reason for avoiding taxes. And I agree that this problem is best fixed by making tax avoidance structurally impossible. Pressuring market actors to voluntarily take actions they are not incentivized to take is not a reliable solution.

But, Tim Cook himself has framed Apple's tax practices in moral/ethical terms. In doing so, Tim Cook began a discussion about the moral/ethical quality of Apple's tax practices. This letter takes part in that conversation. The letter contributes to that conversation by making the very valid point that the moral quality of Apple's tax practices is very poor, according to Tim Cook's own standards. Regardless of the right solution to the problem, this was something that needed to be stated publicly and was stated well in this letter.

Re: Paradise Papers: Dear Tim Cook

#35

Post by jlebrech »

speedplane wrote: post #19
jlebrech wrote: post #10

Earlier quoted context omitted.

should people who make enough money to hire an accountant be punished? because i'm sure they'll avoid/reduce some taxes?

If your accountant was structuring your finances so it appeared your income came from countries other than where you worked, then yes, he should probably be punished.

if something isn't right but is legal, it should be made illegal. you cannot prosecute abuse prior to the change.

Re: Paradise Papers: Dear Tim Cook

#37

Post by jacquesm »

wjnc wrote: post #31
jacquesm wrote: post #25

Earlier quoted context omitted.

Dear Tim, You don't understand how shares work. Shareholders can only benefit from shares in two ways: through speculation about the share price or through dividends. I'm kind of disappointed that I'd have to explain to a man of your stature that money that Apple parks abroad will not benefit the shareholders except in the most indirect ways. If Apple brought home their overseas funds then it would benefit the US and…

Dear Jacques (i'll stop with the game now ;) - I really emphatise with the social responsibility part of the story. The game Apple is playing with stored cash abroad is abject. Nobody is profiting from that. But we can agree that it's not the nature of a corporation to pay more taxes than necessary? If people offer you crazy deals: agree. Governments should coordinate not to make crazy offers and perhaps even tit-for…

The social responsibility part is what it is all about. If corporations use their legal and bargaining power to opt-out of the social contract then everybody will lose. There is such a thing as being too big and I firmly believe that most multinationals are no longer playing by the rules in the sense that they violate the spirit of those rules whereever they can by focusing solely on the letter of the rules.

That's a game that may work in the short term but the long term consequences are pretty grave, especially since there seems to be a concentrating effect of such moves where more and more control is ceded to ever fewer companies.

It will be hard enough to maintain a tax base that can keep the lights on in a country as it is with all the change coming our way, creating playing field differences like these between SME's and behemots is going to erode that tax base very quickly.

Re: Paradise Papers: Dear Tim Cook

#38

Post by thomasahle »

LiamMcCalloway wrote: post #6
cjsuk wrote: post #2

I think we can bitch all we like and nothing will happen. International taxation is complicated and part of a multinational's business model revolves around exploiting that for shareholder gain. What this points to is that we need a new global trade and taxation agreement for handling this. But the policy makers don't want that because they benefit from it. Ergo, it'll always be like this. At best you can add additio…

Countries can unilaterally have taxes based on the share of total company profit generated in the country, rather than just profit in the country.

That doesn't prevent companies from moving all profit generation out of all countries but the lowest taxed.

Re: Paradise Papers: Dear Tim Cook

#39

Post by adventured »

bauerd wrote: post #20
wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

I'm not sure what your argument is. Is it (a) that tax avoidance is morally justified, (b) morally justified only in the business context or (c) not of concern, because the business and the moral are two separate contexts?

A) that paying the taxes required of you by the tax code is a proper, moral action.

Does paying more taxes than required by law make you a more moral person or entity? That's a fine debate.

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