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Paradise Papers: Dear Tim Cook

projekte.sueddeutsche.de

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Re: Paradise Papers: Dear Tim Cook

#541

Post by rootw0rm »

valuearb wrote: post #375
m12k wrote: post #269

Earlier quoted context omitted.

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.

Eliminating corporate income taxes would be the best way to start, given it would benefit society immensely.

Agreed.

Re: Paradise Papers: Dear Tim Cook

#542

Post by taway_1212 »

nickpp wrote: post #277
zajd wrote: post #251

Earlier quoted context omitted.

You really think the PC is a good example of something "created by a free market" not the result of the govt pouring millions into R&D in the decades previous?

Nobody's denying the contribution of the govt $$$ to the creation of the PC. But I've seen computers build by governments. They were slow, huge, power hungry, expensive behemoths. They sucked. We're a long way from there. And free market brought us all the way here.

Are you aware of the fact that Sillicon Valley was created by the US Government?

Re: Paradise Papers: Dear Tim Cook

#543

Post by nickpp »

zajd wrote: post #488
nickpp wrote: post #477

Earlier quoted context omitted.

Same thing with the internet. Government spending got us super expensive connections between a handful of universities. Free markets took that and brought it as what we know as the fast, cheap internet to our doors. Although regulations in the telecom/cable/ISP markets are working hard to impede that. Yes, govt made the highways. Did not really repair them afterwards (at least around here) but it was definitely a goo…

What kind of role do you think the government should play? Should we continue to privatize things like prisons? Seems it would be difficult to incentive rehabilitation when prisons are paid per bed filled. On the other side, should we privatize the military? the fire department? the courts? the police? why not?

A role as small as possible, but not smaller. Specifics depends of the domain, and there you need a domain expert, which I am not.

I just believe that as a general strategy, we should be continuously attempting to reduce govt power and involvement while allowing the free markets to work.

I am worried that we are doing the opposite, where our current response to pretty much any issue is more govt regulation/intervention instead. A middle way would be great.

Re: Paradise Papers: Dear Tim Cook

#544

Post by tskaiser »

pavlov wrote: post #465
tskaiser wrote: post #455

Earlier quoted context omitted.

IANAL but it is my understanding that if those tax reduction schemes are legal many companies are legally bound by their stock holders to exploit them, or else be found negligent in their duties.

>... if those tax reduction schemes are legal many companies are legally bound by their stock holders to exploit them, or else be found negligent in their duties. That's not the case. There is no way a company's management could be sued for "gross negligence in tax planning". If shareholders are unhappy about this issue, their recourse is the same one that's always available to them: elect a new Board of Directors an…

I admit to be completely out of my depth, but my understanding is that it is a fiduciary duty of the directors to act in the best interest of the shareholders. Tax planning is a huge part of profit and thus shareholder value, so wouldn't such "gross negligence" represent a breach of fiduciary duty?

Re: Paradise Papers: Dear Tim Cook

#545

Post by eggpy »

qznc wrote: post #526
simonh wrote: post #519

Earlier quoted context omitted.

>The fix can certainly involve appealing to morals and human responsibility... Are you really suggesting the management and board of every major company in the world should meet to decide how much tax they should choose to pay each year? Even if they did, where should they choose to pay it? Should Apple Pay more tax in China where the phones are assembled? In America where they are designed? In the countries where th…

My (ultra-simplistic) idea would to only tax land and VAT. Abolish all other taxes. Unfortunately, governments like fine-grained taxes because it gives them the illusion of control.

That's not true. Here's just one example: fine-grained taxes are used to help influence behavior, improving public health. Mexico increased taxes on sugar [0], with the result being a fall in consumption. Raising this tax has caused a verifiable reduction in consumption, which has a direct impact on public health[1]. That's just one example, many more exist for all sorts of reasons. It's why cigarettes and alcohol are taxed differently than broccoli. Obviously not all taxes are in the public interest, but neither are they just to give some government official a feeling of empowerment.

[0] https://www.theguardian.com/society/2017/feb/22/mexico-sugar...

[1] http://journals.plos.org/plosone/article?id=10.1371/journal....

Re: Paradise Papers: Dear Tim Cook

#546

Post by JabavuAdams »

eggpy wrote: post #539
Clanan wrote: post #281

Earlier quoted context omitted.

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…

A company is not just a group of people. At least, any publicly-traded company has a legal obligation to it's shareholders. The job of the Board of Directors is to ensure that the company is performing as optimally as possible to earn as much as possible for the shareholders. Morals aren't a part of the equation, it's all exploiting the confines of the law.

This is oft-stated, but not really true in a practical sense. If in 2018 parking lots are more profitable than manufacturing, will you see Apple go into the parking lot business?

There's a huge amount of wiggle room and discretion possible even within the obligations to share-holders.

Re: Paradise Papers: Dear Tim Cook

#547

Post by ChuckMcM »

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…

Sounds like we need an 'uber for tax avoidance' where the start up creates a holding company in a low tax environment and then you sign up and for a 3% going down to say 1% of your "normal" tax obligation they will slosh all your revenue through the tax haven.

This is not a joke, it is a serious suggestion. The issue here is governments and regulatory capture where the wealthy have insured these tax avoidance schemes can work and the governments allow it because they can still get enough taxes from people who aren't wealthy enough to play the game. If we can create a startup that lets everyone avoid taxes the system will be threatened and it will force the governments of the world to fix this or to run out of money.

Re: Paradise Papers: Dear Tim Cook

#548

Post by eggpy »

JabavuAdams wrote: post #546
eggpy wrote: post #539

Earlier quoted context omitted.

A company is not just a group of people. At least, any publicly-traded company has a legal obligation to it's shareholders. The job of the Board of Directors is to ensure that the company is performing as optimally as possible to earn as much as possible for the shareholders. Morals aren't a part of the equation, it's all exploiting the confines of the law.

This is oft-stated, but not really true in a practical sense. If in 2018 parking lots are more profitable than manufacturing, will you see Apple go into the parking lot business? There's a huge amount of wiggle room and discretion possible even within the obligations to share-holders.

While I understand your point, that is a massive overstatement. Apple doesn't go into the parking lot business because it isn't in their corporate charter[0], which outlines the companies' objectives, structure, and operations. If Apple decided they could benefit by building parking lots then they very well might as long as they could justify the expense.

[0] https://www.investopedia.com/terms/c/corporatecharter.asp

Re: Paradise Papers: Dear Tim Cook

#549

Post by awj »

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?

> The fix for this can't be trying to appeal to their morals.

A public corporation doesn't have morals. It isn't a thing that thinks and feels, it's a social construct designed single-mindedly around the creation and accumulation of wealth.

You cannot shame one of these companies. You can enforce the law against them, or you can expose them to such bad PR that they change their ways.

The only "morals" internal to a corporation are their fiduciary duty to shareholders. We either need to fundamentally change the nature of corporations, or accept this and adjust our laws to compensate for immoral agents.

Re: Paradise Papers: Dear Tim Cook

#550

Post by bayonetz »

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…

While they don't violate the letter of the law, they certainly violate the spirit of it. Minimally, I'd like to see them recognize their unfairly gotten gains and use some order-of-magnitude more of it for philanthropic ends or tax reform lobbying. That would be the classy move. It really bothers me how high regular business and personal effective tax rates are compared to these jokers'.
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