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Facebook tax court trial begins over Ireland offshore deal
41–50 of 333 posts
Re: Facebook tax court trial begins over Ireland offshore deal
#42I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…
How would you avoid companies-as-expense accounts? If I form "Coral-Snake & Co.", wouldn't I be able to pay 0% taxes by just directing all income/expenses into that shell? (Granted, I don't understand basically anything about tax law, so maybe this is already a well-defined problem with a well-defined solution.)
You can already show a $0 profit today and pay no income tax, but a business that generates income will always pay sales, payroll and other taxes anyway.
Re: Facebook tax court trial begins over Ireland offshore deal
#43Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.
Well, I guess it depends on the interpretation of the rules. The point of contention seems to be the valuing of assets, which of course FB has incentive to not value highly: > The IRS argues that Facebook understated the value of the intellectual property it sold to an Irish subsidiary in 2010 while building out global operations, a move common among U.S. multinationals. Ireland has lower corporate tax rates than the…
Part of the problem is, it’s not a legit, best price, arm’s-length, market price. Facebook:Ireland is just a sock puppet for Facebook:USA, and the latter has no intention of selling it to a true outsider.
OTOH, if FB:USA sold the rights to FB:I for $1, knowing it would pay billions to license those rights the next year, I don’t get how that can be a proper valuation, even without a clear price discovery mechanism.
Re: Facebook tax court trial begins over Ireland offshore deal
#44Earlier quoted context omitted.
I think that if there’s no legitimate business purpose to a particular business activity other than avoiding taxes, it qualifies as tax evasion. If that’s not illegal in your particular jurisdiction, that just means you have legalized tax evasion.
I understand what you’re trying to say here. And there’s an argument to be made in the other direction too: everyone should be doing everything they legally can, and where it makes financial sense to exert the effort, to avoid paying any more tax than they have to... because giving money and power to politicians is like giving whisky and car keys to teenage boys.
> And there’s an argument to be made in the other direction too: everyone should be doing everything they legally can, and where it makes financial sense to exert the effort, to avoid paying any more tax than they have to...
I hear this a lot and I kind of disagree with the sentiment. I think it's rooted in petty selfishness.
If you have enough money, as these companies surely do, good for you, ok. The attitude that sees any additional proceeds as wasted if they "needlessly" go to governments where it gasp might give other people useful public services ... Seems to have priorities in the wrong place. One must have proper perspective when you see financial success. Petty greed over small percentages of huge incomes is not the way to go. There is value in seeing how lucky you are and being happy with what you have, then subsequently seeing your role in our social system as paying some of that back.
Re: Facebook tax court trial begins over Ireland offshore deal
#45I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…
I think most people advocating for 0 income tax (corporate or personal) advocate replacing that tax with an increased sales tax instead.
That way you don't have to mess with income reporting, deductions, loopholes, etc. Just pay a % of each transaction directly to the government. Credit card companies and banks could even automate this so it's completely transparent.
Re: Facebook tax court trial begins over Ireland offshore deal
#46I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…
There should also be no speed limits, since some people drive too fast anyway. And murder should also be legal, since some people murder anyway. Let’s just remove all laws, since they’ve all been broken at some time.
The key difference is there is no large industry of lobbyists working for reckless driving and murder. If there was, I daresay some rethinking would be in order, even in these cases.
Re: Facebook tax court trial begins over Ireland offshore deal
#47I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…
As a business owner, I fully support this. There are plenty of other taxable outflows like payroll and sales. Having 0% corp income tax would also encourage spending and growth without trying to write down everything as COGS.
Also LLCs operate this way already with pass-through taxes which is why they're used so often in real-estate. It allows for limiting liability and splitting ownership and management without adding a whole new tax basis.
Re: Facebook tax court trial begins over Ireland offshore deal
#48Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.
> Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.
IMO illegality has a human and personal component too. I understand your question is about whether what they did was legal or illegal.
But let me give you an example of something that is "clearly wrong" but sometimes legal. Let us assume that you buy something (or are paid cash) and the amount is $100. If you pay $20 tax, then we say you are taxed at 20% and the amount becomes $80. So far so good. Now let's suppose that you claim back that $20 and you put it in your pocket. You still have the $80 (or the item you bought). So you net is at $100 whether in cash fully or $20 cash and something worth $80.
Now, let us suppose that in this scenario the cash was paid to you (I am specialising away from the case where you are buying something). You thus have $100, and effectively there was no tax. Now assume you go back to the tax office and you tell them that you are reclaiming another 20% on top of the 20% you paid and then reclaimed. Now, suddenly you have $120. You got $40 in tax reclaims but only ever paid $20. This is essentially the cum-ex scandal. [1] Once with and once without. The with part is the tax you reclaimed; the without is the tax you reclaimed with no base for it at all. Note that these are not tax credits, it's hard cash!
The cum-ex tactic is not always illegal, and this is why I say that legality is sometimes dubious (but not always). The reason why they could steal 50 BILLION EUROS from the German tax office is exactly because 1) the banks were and are in on it and 2) they lobbied for and blurred the lines of legality.
Apparently the German tax office still thinks, even today, that claiming $40 after only ever paying $20 somehow makes sense.
Re: Facebook tax court trial begins over Ireland offshore deal
#49Earlier quoted context omitted.
You might want to try leaving better comments? The one at the top doesn't really make any sense. If you left one that did convince people, it would probably get upvoted.
Given all the other comments it sounds like many people agree with me. What part didn’t you understand?
"Many of my comments do poorly on HN" -- silbelj
Re: Facebook tax court trial begins over Ireland offshore deal
#50F*ck Zuck.