Paradise Papers: Dear Tim Cook • Hacker News Board

Re: Paradise Papers: Dear Tim Cook

#441

Post by freyir » Wed, Nov 08, 2017, 2:49 PM UTC

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 cannot expect companies to voluntarily pay more taxes than the minimum, while there are legal loopholes at their disposal.

The solution may mean reducing the tax rate for all companies, closing the loopholes, and then enforcing the law.

But that would require elected government leaders to put their jobs on the line (lowering corporate taxes sounds bad to many voters since corporations have been vilified, even though it has bipartisan support among economists). So it’s unlikely to happen any time soon.

Re: Paradise Papers: Dear Tim Cook

#442

Post by cr1895 » Wed, Nov 08, 2017, 2:50 PM UTC

onan_barbarian wrote: post #130

bmomb wrote: post #108

Earlier quoted context omitted.

But as an US citizen you still use some US benefits like the army and international protection, right? (I'm not from USA or currently living abroad but i think that is "fair")

This is incredibly stupid. A US citizen abroad gets very little additional protection from the "army and international protection" that the other citizens of the country in which they are generally resident get; i.e. a US citizen in Germany or Japan gets a lot and a US citizen resident in, say, China or Indonesia gets nothing. This is one of the dumbest arguments I have ever heard for this kind of wacky double taxati…

And you've got to pay for all your citizen services anyway (renewing passports, etc).

Re: Paradise Papers: Dear Tim Cook

#443

Post by valuearb » Wed, Nov 08, 2017, 2:50 PM UTC

zmk_ wrote: post #329

josephjrobison wrote: post #312

Earlier quoted context omitted.

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?

It's the customers who pay the VAT, not Apple. That's why electronics bought in US where the sales taxes are generally much lower than VAT rates seem cheaper from the European perspective. A higher VAT also hits more the less privileged and effectively crowds them out of the market. For goods like these you can think of the VAT is 'the price to be able to buy' and corporate tax as 'the price to be able to sell'.

No corporation pays taxes, in reality it’s either customers or shareholders who pay them. The point being Apple still generates maeve taxes for Germany and shouldn’t pay it squat in income tax.

Re: Paradise Papers: Dear Tim Cook

#444

Post by rtpg » Wed, Nov 08, 2017, 2:51 PM UTC

improbable22 wrote: post #347

DomreiRoam wrote: post #314

Earlier quoted context omitted.

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 eq…

Maybe the problem is in trying at all to tax something you can't pin down, like this IP transfer between (say) Apple Germany and Apple US. I mean what should its value be? Clearly Apple Germany is nothing at all like an independent company importing phones from China to sell. Much of what they sell is the software, the image, the brand... these things don't have open-market prices. So who gets to decide what their pr…

Here's a solution: if you sell your IP to someone else, that other person has to be independent.

This is done a lot in anti-trust settlements. You can sell your IP to Apple Germany, but then Apple Germany is independent and could go sell that/licence that however they see fit. Including selling to competitors of Apple US.

If you're transferring IP but the receiving organisation is basically under your control.... are you really transferring anything?

Re: Paradise Papers: Dear Tim Cook

#445

Post by chii » Wed, Nov 08, 2017, 2:51 PM UTC

improbable22 wrote: post #363

Cthulhu_ wrote: post #315

Earlier quoted context omitted.

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.

But will people travel to this tax haven to buy their computers? Will Apple's employees all move there to write software? Nope. What we mean by Apple operating in (say) Germany is these things: they make sales there, and they have employees there. Where the letterhead says they're incorporated... isn't this just an implementation detail? It's like asking where their datacenter is located. It's in the cloud, who cares…

> Why not simply tax the things which cannot move, transactions involving real people who live in particular places?

that's already happening. Unless you're implying increasing consumption tax (VATS, GST etc), or higher income tax for individuals (payroll tax, capital gains tax etc).

The tax that's "missing" (read: dodged) is corporate income tax - which is a tax on the profits a corporation makes. But if you don't make any profits (read: hide profits using legal schemes), then what _do_ you tax?

To prevent tax-havens, you'd need to impose sanctions against doing business with any entity that is incorporated in said tax haven. But that's a nuclear option, which can cause damage beyond just stopping tax dodge (like harming the citizen of the tax-haven country, since they now cannot import food, for example).

Re: Paradise Papers: Dear Tim Cook

#446

Post by ThrwyAct » Wed, Nov 08, 2017, 2:51 PM UTC

urza wrote: post #360

C4stor wrote: post #278

Earlier quoted context omitted.

I find it a bit disturbing that you value entertainment on TV as "great" and "state hospitals" and "schools" as crappy. In fact, overall, it seems like you value as "great" everything around you that don't implies interacting directly with other humans, and as "crappy" about everything that does. So if the free market purpose is to value antisocial products while making every social bonds look crappy, well, I'm not s…

Look at the innovation pace of products delivered by free market vs those by government. If government made computers, they would still be big as room and only the rich could afford them. Meanwhile free market delivered computers into your pocket with power and capabilities that just 10 years ago no one would believe. Our education system preparing our kids for future is still basically the same as our grand-grand-pa…

If not "crippled by government", schools and hospitals would be Darwinian shitshows that absolutely guaranteed rising health and income inequality.

I agree that things like fast computers are nice side effects of allowing capitalism to go to work in some arenas, but, in others, you definitely need government to reduce the pernicious effect of unadulterated profit motive.

It's appealing to think to yourself "hey, I make pretty good money, why shouldn't I be able to use that to buy a higher-than average education for my kid?" This is fine--hire a tutor. But taking your tax dollars to a for-profit selective academy that most don't have the option of using contributes to the degradation of public schools that you helplessly claim to be an unavoidable consequence of their being government-run.

Institutions meant to serve all only work when everyone contributes to them. Private, unregulated healthcare and education, by design, only serves those with money. Since health and education are, in the long run, how we generate personal wealth, this scheme is sure to accelerate the widening of inequality.

Re: Paradise Papers: Dear Tim Cook

#447

Post by toyg » Wed, Nov 08, 2017, 2:51 PM UTC

Cakez0r wrote: post #282

jitbit wrote: post #66

While I do agree with the point that "govs should fix taxes, not corporations"... Still. It's a fact that (at least in the EU where I live) the majority of tax burden ends up on small companies - mom & pop shops, little bakeries etc. Who simply can't afford these global tax avoidance tricks (or can't use them because they're "local") Not that this is wrong or right, just a fact you can't argue with. I run a small sof…

I'd like to see some specific examples of tax avoidance tricks that Apple are using. There are a few mentions of how the "techniques aren't affordable for small business", but what are the techniques?

Basically they suck profits into Ireland, by stating in other EU countries that they will pay corporate taxes there; then in Ireland through "IP licensing fees" they paid all the money into a company that was declared not resident on the island for tax purposes, and was basically stateless - so not taxed. That company would then send this money to the various Caribbean shells they use as safes, when necessary, or just hang on it.

When the EU told Ireland to stop this behaviour, Apple was pushed to declare a location for that stateless company; they picked one of the UK Channel Islands, a crown dependency with no taxes, and started funneling money through that. In the process, they got another special deal from the Irish government to keep a chunk of "IP ownership capital" on the island, which resulted in a much lower rate of tax on that money than they would have otherwise had to pay (but ever-so-slightly higher than if they had just put everything in Guernsey, so they could save a bit of face).

Re: Paradise Papers: Dear Tim Cook

#448

Post by improbable22 » Wed, Nov 08, 2017, 2:53 PM UTC

johannes1234321 wrote: post #404

improbable22 wrote: post #347

Earlier quoted context omitted.

Maybe the problem is in trying at all to tax something you can't pin down, like this IP transfer between (say) Apple Germany and Apple US. I mean what should its value be? Clearly Apple Germany is nothing at all like an independent company importing phones from China to sell. Much of what they sell is the software, the image, the brand... these things don't have open-market prices. So who gets to decide what their pr…

This would mean that immaterial things won't have a worth in the book keeping way and can't be billed. In simple terms what happens is that Apple Europe, Inc. has to pay a lot for the license to use the Apple logo and trademark to Apple Paradise, Inc. Thus Apple Europe, Inc. doesn't have profits, while Apple Paradise, Inc. has all the profits. Now the value of the logo and trademark are artificial ... What's needed a…

But this is exactly what happens now. And this is what the letter is upset about. He thinks Apple Europe Gmbh. made profit, and Apple's accountants say Apple Paradise Inc. made the profit, and we all think Apple Cupertino made the profit. And I don't see a good way to settle the argument, thus I suggest not having it.

"tax has to be paid where they are created or used"

Yes exactly. When they sell a cool computer for E2000, they have used their brand to sell it, and there tax is collected. The sale took place in an apple store in Berlin. Angela can adjust the tax rate to anything she pleases.

And to create that brand, they had to pay some guy $200K to write jingles, and this transaction is also taxed. This guy works in a spaceship which has landed in San Francisco. Donald can adjust this rate to anything he pleases.

Neither of these ends can easily move to a tax haven. Everything in between happens in the financial equivalent of the cloud. It seems to me a fool's errand to argue about which bits of that cloud were in whose territory.

Anyway I will shut up now!

Re: Paradise Papers: Dear Tim Cook

#449

Post by valuearb » Wed, Nov 08, 2017, 2:53 PM UTC

germanier wrote: post #387

valuearb wrote: post #368

Earlier quoted context omitted.

What taxes does Apple, an American company, owe Germany? Are you paying taxes half way across the world from your place of business?

I don't pay taxes half way across the world because I don't do business there. Apple does. They have employees in Germany and sell their products (including in their own stores). Of course the vast majority of value is not created there but in the US. However, it's not like they pay their full share of taxes there because on paper the value is largely created in a place that conveniently doesn't tax that.

They pay huge amounts of taxes to Germany in VAT and employment taxes. Their income taxes should be paid where they are based, Germany is trying to double dip here. Apples accounting for where profits are located has to be approved by tax authorities.

Re: Paradise Papers: Dear Tim Cook

#450

Post by fastball » Wed, Nov 08, 2017, 2:53 PM UTC

tankenmate wrote: post #294

fastball wrote: post #218

Earlier quoted context omitted.

I don't think laws are moral. I think that, in a functioning democracy, laws are dictated by whatever views are currently held to be moral by the largest portion of participants in the democracy . Laws are what the largest proportion of people in a pure democracy have agreed is moral. If you think laws are consistently being put into place that don't reflect the morality of the populace, then you have an issue with y…

To not believe in objective morality, I'm assuming because you are not religious or maybe because it is too difficult to "pin down", to me seems to lack intellectual rigour and displays a lack of social empathy. Morality, even aside from the religious back and forth, is a difficult and nuanced subject but that is not to say that it lacks a strong core that most reasonable people believe in (even apart from religious…

Without a higher power you're left with diads that are impossible to resolve logically.

For example, "the ends justify the means" vs "the ends do not justify the means".

Two people can believe in some ultimate social good (your version of "objective morality"). That doesn't mean they'll get there in the same way (my version of "objective morality").