How Apple Sidesteps Billions in Taxes • Hacker News Board

Re: How Apple Sidesteps Billions in Taxes

#81

Post by AlisdairO » Sat, Apr 28, 2012, 9:53 PM UTC

philwelch wrote: post #62

hej wrote: post #38

Earlier quoted context omitted.

> Playing within the rules created by society is not morally wrong. There are people who honestly believe that? It’s not that simple, it really isn’t. I, for example, think there are many immoral but legal things and I want it to stay that way. The law is not supposed to perfectly mirror our morality, that would be a clusterfuck, tyranny, and otherwise a really bad idea. (For example: I think not tipping in the resta…

Taxes are purely a construct of law though. The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just. But we're not talking about people breaking the law, we're talking about people obeying the law. Think of it this way: if you can get an effective tax rate of x% by doing this and y% by doing that, and x other laws that allow you to effectively lower your eff…

> The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just

Surely it's also immoral because it's moral to contribute to the society you benefit from, particularly when the laws are constructed to attempt to make you do so, even when there are loopholes?

Re: How Apple Sidesteps Billions in Taxes

#82

Post by robomartin » Sat, Apr 28, 2012, 9:54 PM UTC

grellas wrote: post #66

The implied but never fully-articulated point of this article is that high-tax domiciles resent it when rational actors having a choice in the matter will routinely structure their business affairs to incur tax to the maximum extent possible in low-tax as opposed to high-tax domiciles. The issue becomes almost formulaic. Given (1) rational actors, (2) freedom to choose and to structure business affairs using a multip…

There's also the very real and reasonable question of where capital might be used more efficiently. Having seen first-hand how government agencies make spending decisions it is my opinion that a huge percentage of tax dollars is wasted. Private industry is almost always far more efficient in allocating resources out of necessity. I have seen cases where government agencies pay double --or more-- what a private entity would pay for exactly the same product or service.

Re: How Apple Sidesteps Billions in Taxes

#83

Post by timr » Sat, Apr 28, 2012, 9:56 PM UTC

grellas wrote: post #66

The implied but never fully-articulated point of this article is that high-tax domiciles resent it when rational actors having a choice in the matter will routinely structure their business affairs to incur tax to the maximum extent possible in low-tax as opposed to high-tax domiciles. The issue becomes almost formulaic. Given (1) rational actors, (2) freedom to choose and to structure business affairs using a multip…

"The implied but never fully-articulated point of this article is that high-tax domiciles resent it when rational actors having a choice in the matter will routinely structure their business affairs to incur tax to the maximum extent possible in low-tax as opposed to high-tax domiciles."

No, that's the conclusion you might draw if you choose to read the article through an extremely narrow filter where you start from the premise that the laws, as they stand, are sufficient and reasonable.

If, instead, you look at the situation and wonder at the utter inefficiency of a tax system that allows some (but not all) corporations to move profits around on paper to avoid taxation -- but only if they spend money on creating fake offices and legal castles in the sky that don't contribute to productivity -- then you start to wonder if perhaps the situation can be changed. And that's an interesting discussion.

Re: How Apple Sidesteps Billions in Taxes

#84

Post by Zak » Sat, Apr 28, 2012, 9:57 PM UTC

jacquesm wrote: post #30

acslater00 wrote: post #19

There is a really important lesson from all of this, and it is not that Apple is wrong for rationally exploiting global tax laws to avoid paying US taxes. The fact that California has no tax jurisdiction in Nevada, and that the US has no tax jurisdiction in Ireland, is an unassailable fact of life. Tax laws are subject to regulatory competition like many other things, and ignoring that -- insisting that this is an is…

Of course it is an issue of morality. I could choose to avoid paying taxes in the society that I'm a part of. It would be in my economic interest to do so. But it is morally wrong because it is that same society that enables me to make my money in the first place. Simple, right?

I'm not sure it's that simple. I live in the US. The vast majority of the US Federal budget goes to the military, income redistribution (welfare) and insurance programs (social security, medicare). I do not believe most of those expenditures enable me to make money, and I think a significant segment is actively harmful. I also feel that I don't have a meaningful say in how that money is used because the political system is broken.

Given those conditions, I don't feel there's anything immoral about doing everything legal to pay less in taxes. I suspect things are different where you live.

Re: How Apple Sidesteps Billions in Taxes

#85

Post by foxit » Sat, Apr 28, 2012, 9:57 PM UTC

jacquesm wrote: post #30

acslater00 wrote: post #19

There is a really important lesson from all of this, and it is not that Apple is wrong for rationally exploiting global tax laws to avoid paying US taxes. The fact that California has no tax jurisdiction in Nevada, and that the US has no tax jurisdiction in Ireland, is an unassailable fact of life. Tax laws are subject to regulatory competition like many other things, and ignoring that -- insisting that this is an is…

Of course it is an issue of morality. I could choose to avoid paying taxes in the society that I'm a part of. It would be in my economic interest to do so. But it is morally wrong because it is that same society that enables me to make my money in the first place. Simple, right?

It's simple, but there are a lot of people who do not understand this. They don't realize the taxes from the system that funded childhood educations and college tuitions to result in an employable, knowledgeable, creative mass of first-world dwellers should be paid back into through taxes on the profits of the companies in their sphere.

There is a singular lack of realization about the societies in which we live, possibly because it does feel like every man for himself most days. The societal web that makes us interdependent and upon which we rely without knowing it isn't as apparent.

Addendum: there's a lot of confusion about the differences between something being legal and something being moral/ethical in the responses to this post. Legal too often simply means exploiting loopholes.

Re: How Apple Sidesteps Billions in Taxes

#86

Post by starwed » Sat, Apr 28, 2012, 9:57 PM UTC

philwelch wrote: post #62

hej wrote: post #38

Earlier quoted context omitted.

> Playing within the rules created by society is not morally wrong. There are people who honestly believe that? It’s not that simple, it really isn’t. I, for example, think there are many immoral but legal things and I want it to stay that way. The law is not supposed to perfectly mirror our morality, that would be a clusterfuck, tyranny, and otherwise a really bad idea. (For example: I think not tipping in the resta…

Taxes are purely a construct of law though. The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just. But we're not talking about people breaking the law, we're talking about people obeying the law. Think of it this way: if you can get an effective tax rate of x% by doing this and y% by doing that, and x other laws that allow you to effectively lower your eff…

The reason it is immoral to pay taxes is that you are still benefiting from the existence of the government but putting the burden of supporting it on others.

You personally may agree or disagree with this, but that's what someone probably means when they say it is immoral to avoid paying taxes, even if it is perfectly legal. Taxes are part of the general social contract of our society, and aggressively finding ways to avoid paying them tends to a tragedy of the commons type situation.

Re: How Apple Sidesteps Billions in Taxes

#87

Post by yequalsx » Sat, Apr 28, 2012, 9:57 PM UTC

grellas wrote: post #66

The implied but never fully-articulated point of this article is that high-tax domiciles resent it when rational actors having a choice in the matter will routinely structure their business affairs to incur tax to the maximum extent possible in low-tax as opposed to high-tax domiciles. The issue becomes almost formulaic. Given (1) rational actors, (2) freedom to choose and to structure business affairs using a multip…

Your first sentence of your last paragraph shows one of the problems with globalization. We have seen in the U.S. municipalities competing with each other to see who can give the most subsidies to large corporations. The effects have not been so desirable. Now we are seeing this played out on a grand, global scale. It's potentially a race to the bottom.

I think globalization without a proper international regulating agency is a bad thing. It's great for the people who have the ability to move from one country to the next. Who can find the optimal place for them to live in. Most people don't have this luxury.

Re: How Apple Sidesteps Billions in Taxes

#88

Post by eps » Sat, Apr 28, 2012, 9:59 PM UTC

Similarly IKEA pays zero tax by channeling all it's profits through a very complicated setup to an Irish non-profit. GE not only pays zero tax, but also manages to extract tax refunds from the US government.

The big question if an evasive tax setup makes sense at lower profit levels, or if the costs of setting up and maintaining it are prohibitive. Does anyone know?

Re: How Apple Sidesteps Billions in Taxes

#89

Post by chadmalik » Sat, Apr 28, 2012, 10:00 PM UTC

yequalsx wrote: post #87

grellas wrote: post #66

The implied but never fully-articulated point of this article is that high-tax domiciles resent it when rational actors having a choice in the matter will routinely structure their business affairs to incur tax to the maximum extent possible in low-tax as opposed to high-tax domiciles. The issue becomes almost formulaic. Given (1) rational actors, (2) freedom to choose and to structure business affairs using a multip…

Your first sentence of your last paragraph shows one of the problems with globalization. We have seen in the U.S. municipalities competing with each other to see who can give the most subsidies to large corporations. The effects have not been so desirable. Now we are seeing this played out on a grand, global scale. It's potentially a race to the bottom. I think globalization without a proper international regulating…

There isn't a need for a single international treaty to deal with this. Simply levy import tariffs on products by companies who refuse to pay their fair share of taxes, or use slave labor, shoddy environmental practices, etc. The means is there and can be implemented tomorrow. What is lacking is the political push to make it happen.

Re: How Apple Sidesteps Billions in Taxes

#90

Post by philwelch » Sat, Apr 28, 2012, 10:04 PM UTC

AlisdairO wrote: post #81

philwelch wrote: post #62

Earlier quoted context omitted.

Taxes are purely a construct of law though. The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just. But we're not talking about people breaking the law, we're talking about people obeying the law. Think of it this way: if you can get an effective tax rate of x% by doing this and y% by doing that, and x other laws that allow you to effectively lower your eff…

> The only reason it's immoral not to pay taxes is because it's immoral to break the law, at least if the law is just Surely it's also immoral because it's moral to contribute to the society you benefit from, particularly when the laws are constructed to attempt to make you do so, even when there are loopholes?

If it had to do with contributing to the society around you, surely it would be the same obligation regardless of the tax laws, wouldn't it? Yet no one voluntarily pays more than the tax rate, and nearly everyone takes all the deductions and tax credits they can.