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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#391

Post by boramalper »

> "I guess the trouble was that we didn't have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist."

> - John Steinbeck

Reading some of the comments here which rationalize, justify, and even defend corporal behaviours such as Apple's nauseate me. How (and why) can you, YOU as a mere individual (or the owner of a small start-up if you'd like to think that way) who pays taxes for nearly every single transaction, can justify these kinds of "tax optimizations"?

Speaking from experience, this is how things (countries, organisations, etc.) corrupt: when people start rationalising (and then justifying) the behaviour of those who are breaking the rules and sitting at the top. The corruption happens when ordinary people looks above and thinks that "I would probably do the same, why would one obey the rules where it can be evaded?". Since everyone except those at the very bottom is above some others, corruption spreads like a bushfire and everyone starts breaking the rules s/he can.

It would be naive to think that only top 500 companies evading tax. Those at the scale of Apple break the rules at their own scale, and smaller ones break it at a smaller scale. Whilst, here I am in the UK, have to pay 10 GBP for a pack of 20 cigarettes because of the taxes.

Re: Paradise Papers: Dear Tim Cook

#392

Post by ihsw2 »

ajeet_dhaliwal wrote: post #285
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…

Tax is really just skimming the surface of the advantages that result from being big and powerful. Yes it means that they get subsidized in a way by the public tax payers but their employees pay for it even worse. The inequality between executive pay and ordinary workers is more than ever over the last few decades and those workers are paying for it by living a two hour commute away in crappy property, saving pennies…

What you are describing is a perfect storm of two economic fallacies -- the theory of marginal productivity and regressive taxation. The former describes how increasing pay will correspondingly increase productivity and the latter describes gradually decreasing tax rates as the amount being taxed increases.

Executive productivity is notoriously difficult to quantitatively measure and it is generally determined by compensation committees, whom are staffed by executives themselves and/or those with a vested interest in voting to raise executive pay. Such incestuous planning structures are almost always subject to graft and corruption.

Regressive taxation (including generous deductions hidden to those unable to afford the best tax planners) may be touted as necessary to reduce capital flight but the naked and bald-faced wealth inequality is simply unconscionable. Relatedly, Trump's tax plan is most definitely a bone throw to the rich as it includes repealing the estate tax. Democracy and progressive taxation have gone hand-in-hand since the end of WWII and it must go hand-in-hand in the twenty-first century.

Re: Paradise Papers: Dear Tim Cook

#393

Post by valuearb »

germanier wrote: post #371
ptaipale wrote: post #332

Earlier quoted context omitted.

Most of the criticism (of Nike and Apple, for instance) isn't for breaking even the spirit of the law. Most often the companies are acting precisely as the law is intended to work, and criticism is based on a misunderstanding of what is turnover and what is profit, and how taxes should be calculated. Very commonly the complaint is that Nike (for instance) pays no corporate income tax to a country even though it sells…

It's perfectly OK if that company actually operates in that country. It is not OK if the only presence they have is a mailbox and the actual act of operation is done somewhere else. A taxation race to the bottom is not what the fundamental principles of the EU are about. At best they are an unwanted side-effect.

No you are missing the point of the EU. No company should be forced to base in a country to sell there. Apple pays huge amounts of taxes in Germany despite not being based there. It just doesn’t pay much “income tax” because it’s not based there.

Re: Paradise Papers: Dear Tim Cook

#394

Post by bashonomore »

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?

There are large companies which do take a moral stance on this and pay taxes as normal, so it is certainly a valid strategy. An example is bet365 in the UK who (according to the little knowledge I have, I used to work there) don't engage in tax avoidance schemes. The irony is that a gambling company takes a moral stance on tax whereas these big Silicon Valley companies who try to portray a liberal image are the most aggressive tax dodgers.

Re: Paradise Papers: Dear Tim Cook

#396

Post by valuearb »

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.

Corporate income taxes are already too high, it’s better for society if they were zero.

Re: Paradise Papers: Dear Tim Cook

#397

Post by maxxxxx »

nickpp wrote: post #266
schalab wrote: post #212

Earlier quoted context omitted.

There used to be a lot of natural factors which worked against monopolies. Every new market you introduced your product in brought along with it a layer of bureaucracy and middle management, which left you more bloated and unwieldy. This allowed smaller,local companies to have an agility and responsiveness advantage even if they offered the same service at a higher fee. Computers and the internet have made the proces…

You raise some good points. But I strongly believe in the innovative solutions brought forth by the free markets. It's not called "the invisible hand" for nothing. I am old enough to remember when whole IT industry used to be in the shadow of Microsoft (and IBM before that). Nobody could see a solution out of it! The government even tried to fix the problem and failed. Ten years later, Microsoft is becoming a nice pl…

The problem is that you just traded one large shark for another. Small companies still get quashed just by another behemoth.

Re: Paradise Papers: Dear Tim Cook

#398

Post by cmiles74 »

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…

This is going to be tough. I think a big advantage of something like a board or a committee is the diffusion of responsibility. I'm not going so far as to say these constructions are immoral, but they definitely make it easier for their members to distance themselves from their decisions.

Re: Paradise Papers: Dear Tim Cook

#399

Post by valuearb »

ehllo wrote: post #364
nickpp wrote: post #292

Earlier quoted context omitted.

How exactly are they inflicting all that harm, hardship and suffering? In my eyes, they are creating tremendous value every day while following every single law nations impose on them. They would risk everything otherwise. You're throwing demagogic, populist accusations without a single shred of support. Is emotional discourse an acceptable replacement for the rational one?

Maybe this video from the HMRC.gov.uk helps you to understand why evading tax is bad and it is better for all to pay the full tax ;) https://www.youtube.com/watch?v=C3_VwZ-Cmac

Apple pays the full tax. It pays huge amounts of taxes in Germany.

Re: Paradise Papers: Dear Tim Cook

#400

Post by dontreact »

cm2187 wrote: post #358
dontreact wrote: post #336

Earlier quoted context omitted.

Alright here are my new loopholes to evade your amendments: I'll set it up so that my other company in the other country is sharing profits with my main company. Maybe I'll have a family member or someone I trust actually own that company. Perhaps this doesn't work for some reason that already exists in the tax code, but I've already met the letter of the law that you spelled out here. Obviously that would be easy to…

I think what you are describing is a company not based in the US not having to pay this tax. Effectively companies fleeing the US. Agree that this would likely be a consequence. But that's the price to pay to maintaining high tax rates. Countries don't like competition but the reality is that this competition exists among them.

I don't think Apple and Google can flee to Bermuda or Ireland and that's not what I was talking about. The employees aren't going to move.

I was just pointing out a simple loophole in the specific rules the you proposed as a rhetorical tool: it's very, very hard to write a loophole free tax code in light of the inherent complexity of having many nation states and multinational corporations. At the very least, it should become a cultural norm for companies like Facebook, Apple and Google to report tax loopholes even as they exploit them.

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