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Apple has €13bn Irish tax bill overturned

bbc.com

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Re: Apple has €13bn Irish tax bill overturned

#231

Post by MR4D »

axlee wrote: post #123
logicchains wrote: post #58

Earlier quoted context omitted.

>What are the benefits of a fortune 500? Who are the beneficiaries? The main ones would be investors and management, including a subset of employees. Workers are also a pretty big beneficiary: look how well workers at recent Fortune 500 entries like FAANG are paid. Even after accounting for subsidised health and education benefits the average European developer is still lucky to earn even half of what the average US…

> Workers are also a pretty big beneficiary FANNGS, by definition, are 1% of the Fortune 500. In term of headcount, it's even lower. They should not even be part of this argument. You can't base taxation policies around the personal experience of hyper-specialized, in-demand trained professionals. Fortune 500 no1: Walmart. no2? Amazon. Are you arguing that those kinds of companies have a upward pressure on salaries?…

If I use the S&P 500 instead (easier calculation given available data for me), the the FANG is a huge portion. (Yes, 5 companies out of 500 are by definition 1/100.) No argument about headcount, though.

Take a look at the second chart (bottom of "Page 1", the third actual page considering the title page and contents page). [0]

Revenue may be small, but profits are huge, and market capitalization (aka "wealth") is absolutely massive. And that market cap is what feeds retirement plans & pensions. So while Europe is taxing people, the US is growing profits and wealth.

The World Economic Forum had this to say about Europe's tech giants in 2017: "In total more than a third of European tech founders are based in the UK." [1] That doesn't bode well for the future, when your economy is stuck in old industries, and the leader is leaving the party.

BTW, hats off to the Finns - not sure what they are doing with gaming, but they punch well above their weight.

When it comes to creating wealth, taxation doesn't do anything but redistribute it. In order to actually generate wealth, you need capital, and people who use that capital more efficiently & effectively will become richer. It is a virtuous spiral. And what's important is that every one of those high paying tech jobs is one less low-paying job. Most of the low paying jobs have existed for decades in various industries (esp retail), but most of those tech jobs didn't exist 20 years ago. I can only imagine how many high paying tech jobs there will be in the US in 20 more years, even though I expect low-paying jobs to still outnumber them.

[0] - https://www.yardeni.com/pub/yardenifangoverview.pdf

[1] - https://www.weforum.org/agenda/2017/10/meet-europe-top-tech-...

Re: Apple has €13bn Irish tax bill overturned

#232

Post by justicezyx »

fluffy87 wrote: post #222
logicchains wrote: post #38

Earlier quoted context omitted.

>Transfer pricing and tax havens are draining money out of the economies of most European countries, breaking the virtuous cycle where consumer spending also leads to salaries, taxes and more investment in the community, to keep the economy going - instead we have a shrinking middle class, as the fuel is drained from the engine. An alternative interpretation is that the high degree of taxes and regulations in Europe…

The main reason behind the lack of EU successful startups is that they can’t attract talent because they can’t pay employees in stock options which means that when one happens to succeed only few people get rich, instead of what happens in the US were most employees get rich and some of them go on to create beer startups. There is no such cycle in Europe, and it’s all because the lack of stock options. Without them,…

> in the US were most employees get rich

Really? I thought most startup get a successful exit, result into their employees being modestly compensated, probably on par with the counterparts in mega corps.

Re: Apple has €13bn Irish tax bill overturned

#234

Post by alpha_squared »

fluffy87 wrote: post #222
logicchains wrote: post #38

Earlier quoted context omitted.

>Transfer pricing and tax havens are draining money out of the economies of most European countries, breaking the virtuous cycle where consumer spending also leads to salaries, taxes and more investment in the community, to keep the economy going - instead we have a shrinking middle class, as the fuel is drained from the engine. An alternative interpretation is that the high degree of taxes and regulations in Europe…

The main reason behind the lack of EU successful startups is that they can’t attract talent because they can’t pay employees in stock options which means that when one happens to succeed only few people get rich, instead of what happens in the US were most employees get rich and some of them go on to create beer startups. There is no such cycle in Europe, and it’s all because the lack of stock options. Without them,…

> ...instead of what happens in the US were most employees get rich and some of them go on to create beer startups.

Do most startup successes (which themselves are quite rare) result in most employees becoming rich? I've had my share of successful startup experience as an employee, and there was a nice payoff, but I'd hardly call it "rich" in any accepted definition of the word. At best, it's made up for the time I spent being underpaid compared to market rates.

Re: Apple has €13bn Irish tax bill overturned

#235

Post by messe »

rfrey wrote: post #227
IgorPartola wrote: post #224

Earlier quoted context omitted.

Why can’t they offer actual stock instead at that point?

Then employees would need to immediately pay tax on the stock based on the last valuation.

I'm not sure about stock options, but RSUs are reasonably common in Ireland. Tax isn't paid on them until the vest date.

Re: Apple has €13bn Irish tax bill overturned

#236

Post by thephyber »

fluffy87 wrote: post #222
logicchains wrote: post #38

Earlier quoted context omitted.

>Transfer pricing and tax havens are draining money out of the economies of most European countries, breaking the virtuous cycle where consumer spending also leads to salaries, taxes and more investment in the community, to keep the economy going - instead we have a shrinking middle class, as the fuel is drained from the engine. An alternative interpretation is that the high degree of taxes and regulations in Europe…

The main reason behind the lack of EU successful startups is that they can’t attract talent because they can’t pay employees in stock options which means that when one happens to succeed only few people get rich, instead of what happens in the US were most employees get rich and some of them go on to create beer startups. There is no such cycle in Europe, and it’s all because the lack of stock options. Without them,…

> when one happens to succeed only few people get rich, instead of what happens in the US were most employees get rich

I don’t think this is accurate. Even in successful startups, most employees don’t get rich. Yes, some manage to navigate the complicated financials and can afford to execute their options, but typically only valuable roles are offered stock options and not all employees can afford to execute them.

Even if the company is “successful” and goes IPO, employees that execute their options can lose money while trying to execute their options (many Uber employees right now and plenty of 1999-2000 IPO employees).

In short, stock option incentives are gambling. I’m not sure they are a net positive even for the USA. Yes, we get harder workers for cheaper, but this depends on VC and Fed Reserve money being plentiful, which comes with other costs.

Re: Apple has €13bn Irish tax bill overturned

#237

Post by fennecfoxen »

axlee wrote: post #123
logicchains wrote: post #58

Earlier quoted context omitted.

>What are the benefits of a fortune 500? Who are the beneficiaries? The main ones would be investors and management, including a subset of employees. Workers are also a pretty big beneficiary: look how well workers at recent Fortune 500 entries like FAANG are paid. Even after accounting for subsidised health and education benefits the average European developer is still lucky to earn even half of what the average US…

> Workers are also a pretty big beneficiary FANNGS, by definition, are 1% of the Fortune 500. In term of headcount, it's even lower. They should not even be part of this argument. You can't base taxation policies around the personal experience of hyper-specialized, in-demand trained professionals. Fortune 500 no1: Walmart. no2? Amazon. Are you arguing that those kinds of companies have a upward pressure on salaries?…

Agree. The most pro-Wal-Mart economists will tell you that Wal-Mart as a firm has boosted the US economy by at least 1% of GDP, by being more efficient, and forcing its competitors to be more efficient as well. Suppose for a moment that we accept that claim uncritically -- it is still very clear to see that these gains do not accrue through the vehicle of employment. Indeed, the non-logistics savings from Wal-Mart comes in no small part from reducing the number of workers involved in retail. As with many economic situations, the losses are simply concentrated and obvious, while the gains are diffuse and spread across many transactions from many shoppers. In this case, the gains accrue as part of every grocery-store transaction in the country (and particularly to the poorest in the country, who are most price-sensitive).

One can hold many opinions about the matter, and one can dispute that there is a net benefit at all, but it is clear that referring to this as "good for workers" is not particularly enlightening.

Re: Apple has €13bn Irish tax bill overturned

#238

Post by holoduke »

rfrey wrote: post #227
IgorPartola wrote: post #224

Earlier quoted context omitted.

Why can’t they offer actual stock instead at that point?

Then employees would need to immediately pay tax on the stock based on the last valuation.

most European countries use Sars (stock appriciation right) tax is collected at the very end. against a 50% tax cut though (in most EU countries)

Re: Apple has €13bn Irish tax bill overturned

#239

Post by AngryData »

x87678r wrote: post #39
stepstop wrote: post #2

> “This case was not about how much tax we pay, but where we are required to pay it," Apple said in a statement. "We're proud to be the largest taxpayer in the world as we know the important role tax payments play in society." That’s a really beautiful example of spinning the story of what’s going on.

Well looks like last year they paid $10.5B in taxes (on 65.7B profits) so which part is wrong? https://finance.yahoo.com/quote/AAPL/financials?p=AAPL

That is a far lower tax rate than I pay.

Re: Apple has €13bn Irish tax bill overturned

#240

Post by SahAssar »

alphadevx wrote: post #162
SahAssar wrote: post #137

Earlier quoted context omitted.

Are the facts in dispute or just the legality of them?

The legality I believe. I don't think the Irish Government or Apple tried to hide anything, so the facts are out there in the public domain (Apple is a public company). More about the EC implying it was illegal, but that has now been overturned so all parties legally (if not morally, depending on your point of view...) vindicated.

If so the only part of the comment you were replying to above that was "overturned" was the word "illegal". Just wanted to make that clear, since I'm one of the people who think that it's still immoral and should be illegal.
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