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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#311

Post by sdiepend »

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…

We have a global economy but not a global tax system or a global set of rules. That's the essence of the issue here I think. What also happens is countries upping one another with lower taxes and exceptions to attract big companies hoping to get some (small) benefit from it.

Re: Paradise Papers: Dear Tim Cook

#312

Post by josephjrobison »

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…

100% agree with the article. When an iPhone is sold in Germany, there is a VAT on that product that definitely goes to the government, right?

So the main question is the corporate tax and not the per unit? Perhaps it would make sense to capture the true tax for in-country sales by adjusting the per unit tax?

Re: Paradise Papers: Dear Tim Cook

#313

Post by adamlett »

nickpp wrote: post #151
sfifs wrote: post #115

Earlier quoted context omitted.

Those with wealth will always try to capture the system - whether its formal or informal. The natural state of any business is to try and become a monopoly because that maximizes rent taking ability - NOT competition. Practically the ONLY power able to stop monopolies from forming is the government. In absence of the government's ability to "meddle", businesses can and will cut deals with big competitors and squelch…

Monopolies are granted by governments. The free market has a natural solution to monopolies, it's called competition - startups. Big Cos will always lobby governments to add rules and regulation to raise the barrier of entry on their market and thus reduce competition. They, in fact, buy their monopoly from the government. Solution? Take away the government's ability to grant monopolies.

Monopolies are granted by governments

Sometimes, sure. But far from exclusively. Monopolies arise naturally in unregulated markets.

The free market has a natural solution to monopolies, it's called competition - startups.

That’s like saying that natural selection is the solution to hereditary diseases. Not so comforting for those suffering now.

Re: Paradise Papers: Dear Tim Cook

#314

Post by DomreiRoam »

tyingq wrote: post #240
loceng wrote: post #188

Earlier quoted context omitted.

These companies evading taxes are responsible for increased hardship and suffering of a society as well, leeching off of the nations they exist in, and being able to outcompete the honest organizations and people in them. The damages are far greater than the tax avoided. "They are doing it too" isn't a valid excuse either.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

I think they are often engaged in illegal activities but it is difficult to prove it. A company and its subsidiaries are different entities and when you do an IP transfer between them where a huge set of patent and trademark is exchanged for 1 euros and then used back for millions, one of the company has been wronged. Try to do the same shenanigan with a LTD and yourself and you will very fast see what the IRS (or equivalent) think of it.

A company is just a legal construction but we let people transgress the legal constrains that should rule its behavior.

Re: Paradise Papers: Dear Tim Cook

#315

Post by Cthulhu_ »

m12k wrote: post #269
tyingq wrote: post #240

Earlier quoted context omitted.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

Agreed, the only sane solution to this is a massive overhaul of international tax law. Shaming companies just isn't a scalable solution in any way. There's a massive opposition against this both from multinationals and tax haven countries though - this article is a good way to start making it obvious to normal citizens that this issue should be on the ballot.

That simply won't work if there's even one country (like the known tax haven islands) that don't abide by it. Unless international tax laws start charging taxes for every penny that crosses a border, things like that will keep happening. There's a huge financial incentive for small countries to become tax havens, they take a relatively tiny amount of money, which for them multiplies their GDP.

Re: Paradise Papers: Dear Tim Cook

#316

Post by freeflight »

Joeri wrote: post #205
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…

There's a terrific opportunity here for a financial company that specializes in tax havens for small business. Bundle together ten thousand mom and pop shops, and you have enough resources to do this kind of financial wizardry.

That sounds a bit like the plot from the show Ozark, but there they do it to launder drug money.

Re: Paradise Papers: Dear Tim Cook

#318

Post by billmalarky »

Clanan wrote: post #281
tyingq wrote: post #240

Earlier quoted context omitted.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

The fix can certainly involve appealing to morals and human responsibility. A company is, after all, just a group of people. This should be a very strong tactic considering how liberal Silicon Valley is. The major players preach constantly about progressive ideals, yet fail to do more than the minimum when push comes to shove. My business partner and I purposefully pay normal taxes, avoiding accountants' crazy tax re…

"My business partner and I purposefully pay normal taxes, avoiding accountants' crazy tax reduction schemes, because we think it's the right thing to do. We're a tiny speck compared to Apple, but the principle still applies. If the big players made it the norm, their investors would suck it up and deal with it."

I suspect that you and your partner have significantly more control over your enterprise than the officer of a public company does though. If you didn't your investors wouldn't suck it up, they would do as they see fit, which may be agree with your position or may be replace you.

Public companies are controlled by their share price more than they like to admit. Even if you are like Zuck and maintain complete management control of your public company, if that share price takes a huge hit it becomes very hard to attract and maintain talent/future investment/etc. Everyone has some authority to answer to.

Re: Paradise Papers: Dear Tim Cook

#319

Post by improbable22 »

fauigerzigerk wrote: post #181

I fear that Mr. Krach does not understand corporation tax. Comparing profits from sales in a particular country to corporation tax paid in that country by a foreign company makes absolutely no sense. Apple's tax avoidance schemes are in place to avoid US taxes, not German taxes or taxes elsewhere in the world outside the US. I think Mr. Krach is right that global corporations do not pay their fair share towards globa…

Yes to this: "corporation tax, as it is structured today, is unfit for purpose in a globalised economy".

Where Apple sold its computers is well-defined, you can count each one and tax it. Where their employees work is also well-defined, they have desks, and beds.

Where they made their profits simply isn't well-defined. How much was due to the software (California), the marketing (let's say London), the assembly (China), the logistics (in between)? These question don't have sharp answers. Sure, Apple's accounting guys write down some numbers. But once you attempt to tax them, you discover that they have great freedom in what column they write those numbers in.

I increasingly think the correct corporate profit tax rate is zero. Tax the goods they sell. Tax the salaries they pay. Tax the capital gains when shareholders sell, if you must. These things all involve actual people and take place in particular countries. The rest is an abstraction.

Re: Paradise Papers: Dear Tim Cook

#320

Post by Cthulhu_ »

PedroBatista wrote: post #288
tyingq wrote: post #240

Earlier quoted context omitted.

They aren't, for the most part, doing anything illegal though. They are using the existing laws to their best advantage. The fix for this can't be trying to appeal to their morals. It would have to be something else that just limits the legal choices. Edit: If you disagree, are you saying that shaming them into not doing this solely on some moral compass is the right fix? Does that scale?

Laws are written by people ( sadly by lawyers paid by these companies in this case ), just change the laws. And by trying to do this we'll see creatures come out of the woodwork and previously virtue signaling personalities going strangely MIA.

One does not simply change the laws, just like you're indicating. You need a majority vote in a government or international thing to change laws, and those are easily influenced if you have more money than the GDP of many countries.

Actually that makes me wonder when we'll see the first companies starting their own countries.

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