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Paradise Papers: Dear Tim Cook

projekte.sueddeutsche.de

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Re: Paradise Papers: Dear Tim Cook

#171

Post by dontreact »

dontreact wrote: post #126
Maarten88 wrote: post #93

Earlier quoted context omitted.

What if governments of large countries such as Germany (or the whole EU) would base the corporation tax simply on the total profit, divided by the revenue share of the country? For large public multinational corporations it is very easy to approximate how much they should pay in any country, when you just wouldn't accept the transfer pricing tricks that they use to move the profits around.

I think one reason this is tricky because it's not easy to define where an online sale is happening.

Another reason would be that it could be argued that this unfair if they are selling products with very different margins in different countries.

Re: Paradise Papers: Dear Tim Cook

#172

Post by golergka »

orwin wrote: post #105
draugadrotten wrote: post #90

Earlier quoted context omitted.

People usually feel (don't think) that it's moral for OTHERS to pay more taxes. They also feel (don't think) that's moral for themselves to pay less. It's called socialism.

Well, i feel its moral for me to pay all my taxes, and even though i also give money to charity, i don't use this fact to reduce my taxes, because i feel a lot of people need this money way more than me. This is socialism.

No, this is either personal choice over your own property, (which is charity), or irrelevant - your feelings over taxes don't matter, you don't get to choose whether to pay the taxes or not.

Socialism is forcing your choice on other people's property through the only organization that has monopoly on violence in today's society - government.

Re: Paradise Papers: Dear Tim Cook

#173

Post by brynx97 »

sschueller wrote: post #86
styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

Same goes for US individuals living abroad not having any business relations or even holdings in the US. Yet they are required to file and pay US taxes in addition to local taxes.

You can apply for the foreign earned income tax exemption. I work abroad, and I reclaimed all my US taxes for my income earned abroad.

Re: Paradise Papers: Dear Tim Cook

#174

Post by nhaehnle »

sschueller wrote: post #142
earthtolazlo wrote: post #111

Earlier quoted context omitted.

You are welcome to give up your American citizenship if that income tax becomes too burdensome for you.

Good luck with that, fee has increased significantly and you may be required to pay an exit tax: "The Exit Tax is computed as if you sold all your assets on the day before you expatriated, and had to report the gain. Currently, net capital gains can be taxed as high as 23.8%, including the net investment income tax."

This doesn't actually prevent you from leaving though, and is probably seen by many (most?) people as entirely fair.

Re: Paradise Papers: Dear Tim Cook

#175

Post by lucozade »

jarym wrote: post #78
lucozade wrote: post #50

Earlier quoted context omitted.

> Maybe governments should simplify their own tax rules I can't see that happening. Tax policy is used by most governments as a fine grained tool for all forms of signalling. Not just economic either: alcohol, tobacco, fuel, renewables etc. all use the tax systems to promote social change. It's also quite handy for deflection i.e. if your economy's not doing as well as you'd want in an election cycle, blame the elite…

Tax policy needs to be recognised as a social issue. If politicians are using the complexity as a tool then it stands to reason that the only ones that can efficiently navigate the resulting convoluting mess is the wealthy. It puts the less wealthy at a disadvantage and if the masses start calling for change then the only reasonable solution is to simplify legislation.

> If politicians are using the complexity as a tool

I've no reason to believe that's the case. They are using the tax system as a tool for other purposes that , as a consequence, means it's complex. The act of applying rules that would simplify things, on the assumption that it's not just a one off, would have the effect of taking the tool away.

> if the masses start calling for change then the only reasonable solution is to simplify legislation

As a general rule, the masses don't call for simplification of the tax system. They call for a) paying less tax or b) other people paying more tax.

Anyway, the whole premise requires a "all other things being equal" mentality.

Take consumption taxes in the UK, for example. Eminently sensible that we have one rate. Much simpler. Obviously there'd be no repercussions on the increase on tax for children's clothes or newspapers (yeah, right). Or the huge reduction in tax for tobacco, alcohol or fuel that would, presumably be covered by the increases in food and safety goods.

Sure there are parts of the tax code that are less politically suicidal. There's definitely scope for tinkering. But wholesale changes? Just can't see anyone, or at least anyone elected, having the guts.

Re: Paradise Papers: Dear Tim Cook

#176

Post by ainiriand »

It is funny to see that here in Dublin there are so many homeless people. Almost one in every street. This tax evasion is not the direct responsible but it is another symptom of this 2-speed society in which inequality separates citizens.

Re: Paradise Papers: Dear Tim Cook

#177

Post by dontreact »

cm2187 wrote: post #163
styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

All they are doing is arbitraging loopholes in the tax systems. Politicians have been trying to solve way too many problems by taxes (taxing differently x and y) or giving tax gifts to donors and various organised interests. As a result it creates an arbitrage-able tax system. I wouldn't point your annoyance to those who are optimising their taxes (after all this is merely their fiduciary duties to their share holder…

I think you are fundamentally missing the nature of the loopholes being exploited. They have less to do with the complexity of the taxes in one country but rather the complexity that emerges naturally from different countries having different tax codes. How would a flat tax help avoid this scheme for example?: http://www.nytimes.com/interactive/2012/04/28/business/Doubl...

The whole point is they skip the U.S. tax code entirely.

Re: Paradise Papers: Dear Tim Cook

#178

Post by hop »

In Mexico, people don’t finish their houses and leave rebar coming out the roof to pay less tax. In Vietnam, the houses are really thin because property taxes are based on width. For an American company selling things overseas, they’re going to setup in Ireland or wherever else because the laws make it advantageous. All these decisions are functions of the laws written, so if they want to complain and write open letters, it should be to lawmakers, not the heads of companies operating logically.

Re: Paradise Papers: Dear Tim Cook

#179

Post by dx034 »

snappyTertle wrote: post #84
jarym wrote: post #5

"Such “tax optimization” – albeit legal – is only possible because specialized law firms such as Appleby devise complex company structures inaccessible to most other firms" Maybe governments should simplify their own tax rules. Then you wouldn't need specialised law firms and simpler tax systems are harder to bypass. To add, there is nothing 'moral' about tax - you have no choice but to pay what you're legally obliga…

The problem is that we have a government body that can be bought and influenced by the private sector. If government powers were limited in scope, there would be no incentives for lobbying. It's perverted that companies reach a point where it's more profitable to lobby or find ways around laws rather than continuing to spend on production or other business costs.

No, the problem is that the price of something is hard to estimate with tech. Apple, like everyone else, make use of transfer pricing tricks. They don't book profit in one country because the subsidiary there had to pay license fee to use the apple brand. The prices for that are obviously carefully chosen to minimise tax. But for a tax authority to dispute that and come up with a better value of the right to use the Apple brand is close to impossible. With manufactured products you have an idea what a product or brand is worth. But for the iPhone it's not clear what amount of the price accrues to the Apple brand.

Re: Paradise Papers: Dear Tim Cook

#180

Post by styx31 »

akanet wrote: post #156
styx31 wrote: post #137

Earlier quoted context omitted.

All companies are supposed to be equals regarding taxes. If a part of them can trick this rule, then it is not fair and must be fixed. I agree that there is a part of entrepreneurship which include being able to understand the rules and laws and use them efficiently, but all these familiarities used to game the system are only valid if only a minority of the people use them. One people finding this trick is ok, but b…

Oh, sorry, I'm not saying it's _good_ that this is the case, just that you'd be surprised by the number of small companies pulling this kind of shit too.

Yes, we were also tempted (suggested) to do the same at some point in our history. Perhaps as suggested elsewhere in this thread, some startup will be able to create an offer to easily outsource some revenues. That will certainly declare the end of the game.
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