How Apple Sidesteps Billions in Taxes • Hacker News Board

Re: How Apple Sidesteps Billions in Taxes

#161

Post by zobzu » Sun, Apr 29, 2012, 3:41 AM UTC

paulhauggis wrote: post #154

zobzu wrote: post #53

So when the state takes 50% of the salary, it's bad but it's life. It's what the state needs to survive and enhance. When companies pay 0% tax rate, quick, defend them. If they did pay the tax, the CA state certainly wouldn't have any money problem. But no, that's not important, right? Shares etc are! I'm surprised everyone finds it ok. I'd almost dare to say it's an issue that is especially present in the US (that p…

or how about the fact that many people think that monopolies are bad, yet are fine with the government completely taking over things like health care, which would create a monopoly. The same rules will also apply (IE: no competition=no innovation).

I actually think that some government monopolies are not bad. The problem is that they can't be implemented properly if there's corruption (and there is, always).

For example in France the state owned the electrical company and the telecom company for a long while.

Result?

- Single electrical network

- Single, full fiber, telecom network.

- Health care, even if not perfect, is way better than in the US.

Those work very well and are among the best in the world.

When mobile phones came to the game, they did not interfere in any way. Result?

- Each operator has a set of frequencies, successful operators have no bandwidth left (I'm sure you know of that issue in NYC, SF, and all big US cities if you're on AT&T. Same issue.)

- Deployment and coverage takes forever (again in the US it's the same, so many areas don't even have 3G or any cellular network at all) since not all zones are as profitable

- Same issue every time a new tech comes up (good luck til all the country is covered by LTE)

This concludes into: the state has to organize and regulate things for the good of the people (which actually also leads to faster innovation, see the fiber example again. France's full fiber network is in place since many decades!)

The problem is that no country really does even a little bit of that anymore. Every party is backed by corporations and sustain only their interests. The scheme is well oiled with several steps, and we aren't very different from the people in Europe from the 1700's (regardless of the country)

Re: How Apple Sidesteps Billions in Taxes

#162

Post by meric » Sun, Apr 29, 2012, 4:08 AM UTC

BCM43 wrote: post #32

yummyfajitas wrote: post #29

Earlier quoted context omitted.

Ireland can't lower it's taxes to the point of unprofitability, so it will lower it's taxes until revenues raised == cost of services + small margin. That's a good thing. Don't complain that others provide the same service at lower cost, try to innovate and outcompete them.

But that won't work if some very small country lowers it's tax to 1%. The US can't compete with that.

You can charge sales taxes. A company can't avoid those if they want to sell things to the country.

Re: How Apple Sidesteps Billions in Taxes

#163

Post by whatusername » Sun, Apr 29, 2012, 4:13 AM UTC

The Kerry packer (Australian media baron) quote is always appropriate:

During the inquiry he repeatedly berated the politicians conducting it, and the government. When asked about his company's tax minimisation schemes, he replied: "Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!"

Re: How Apple Sidesteps Billions in Taxes

#164

Post by joesb » Sun, Apr 29, 2012, 4:15 AM UTC

notJim wrote: post #141

byrneseyeview wrote: post #130

This indirectly brings up the point that it's hard to make the case for directly taxing corporations at all, aside from the fact that it's convenient. Ultimately, all corporations are owned by tax-paying people (or nonprofits). So why not tax their distributions as income? If I forgo working, and instead develop some skill that I could use to raise my income, nobody taxes me on the increase in notional wealth I have…

Another person suggested this idea and the thread, and this was the problem I had with it: > Ultimately, all corporations are owned by tax-paying people (or nonprofits). So why not tax their distributions as income? Many companies don't pay dividends and sit on their profits for a long period of time, so in practice, that money might never be taxed.

Owner of the share/company is going to want to use that profits before they die, so the transfer of money from company to individual will happen one day.

Re: How Apple Sidesteps Billions in Taxes

#165

Post by joesb » Sun, Apr 29, 2012, 4:22 AM UTC

zobzu wrote: post #53

So when the state takes 50% of the salary, it's bad but it's life. It's what the state needs to survive and enhance. When companies pay 0% tax rate, quick, defend them. If they did pay the tax, the CA state certainly wouldn't have any money problem. But no, that's not important, right? Shares etc are! I'm surprised everyone finds it ok. I'd almost dare to say it's an issue that is especially present in the US (that p…

If a person's legal action means he has to pay 50% of his income, it's life. If a company's legal action means it has to pay 0% of its income, it's life.

Re: How Apple Sidesteps Billions in Taxes

#166

Post by epoxyhockey » Sun, Apr 29, 2012, 4:37 AM UTC

driverdan wrote: post #74

epoxyhockey wrote: post #61

Every time I read about these tax schemes, I think, "I want to do that, too." Is there any company out there that will help the little guys making all of their money online complete a double Irish Dutch sandwich?

Define little. It's only worthwhile when you reach a certain level of profit. There are quite a few lawyers and accountants that specialize in offshoring.

Little, as in, a few hundred thousand per year. I was thinking that if the money of several small companies were pooled together, something beneficial could be done.

Re: How Apple Sidesteps Billions in Taxes

#167

Post by notJim » Sun, Apr 29, 2012, 4:46 AM UTC

chernevik wrote: post #149

notJim wrote: post #139

Earlier quoted context omitted.

I'm not really convinced that private industry is any better at avoiding waste than government. I must admit I haven't worked in government, but when I worked at large companies, I was shocked and appalled by how incredibly inefficient and wasteful their internal affairs were. Furthermore, many of us [of course, you may disagree] would like for the government to provide more services, and that money has to come from…

The sheer size and complexity of government in the US has reached the point of effective opacity. It's no longer possible to really assess what the government is doing, or what the costs of those activities are. The political class has every incentive to enhance this opacity. Their poor understanding of economics and management -- they are neither selected for nor disciplined on these skills -- only add to the confus…

> At this point all we really _know_ about the government's activities is that they are overpriced, under-effective, and understated in their size.

If the government is as opaque as you describe, than we know nothing at all. You're falling back to a popular assumption for lack of information.

>There is no rational discussion of government's role until these conditions are resolved.

Are you going to lead the revolution [edit from here on] or just throw up your hands?

Re: How Apple Sidesteps Billions in Taxes

#168

Post by notJim » Sun, Apr 29, 2012, 4:57 AM UTC

temphn wrote: post #144

notJim wrote: post #139

Earlier quoted context omitted.

I'm not really convinced that private industry is any better at avoiding waste than government. I must admit I haven't worked in government, but when I worked at large companies, I was shocked and appalled by how incredibly inefficient and wasteful their internal affairs were. Furthermore, many of us [of course, you may disagree] would like for the government to provide more services, and that money has to come from…

There is something called "career status" in the federal government that is worth taking into account: http://www.aphis.usda.gov/mrpbs/hr/job_opportunities/fed_emp... Permanent – Career status as a federal employee is achieved by fulfilling 3 years of substantially continuous service as a career-conditional employee in the competitive service. http://ohmygov.com/blogs/general_news/archive/2010/08/18/dea... The servic…

> Perhaps the most important is that a poorly managed company will eventually go bankrupt, while the federal government can defer that for decades via quantitative easing.

This would be true in an idealized capitalist society, but many companies are one or more of the following:

   - propped up by the government (automotive companies, financial institutions)
   - in industries with incredibly high startup costs and difficult to obtain special knowledge (defense companies like boeing and lockheed)
   - have effective monopolies or oligopolies (utilities in some places, telcos)

Of course these are all far from immune to disruption, but they operate at such a scale that even when disrupted, the competition is often available only for small projects/few customers. The result is while yes they will eventually fail if they are poorly managed, it is unlikely that will be in our lifetime. Personally, I'd rather not wait that long.

Additionally, as I mentioned before, there are some services that I would like to have made available that can't be operated for a profit without government intervention. I am willing to tolerate inefficiency to achieve those goals. (Just as we as a society are apparently willing to tolerate governments other inefficiencies.)

Regarding your point about career tenure, I've often thought that one of the most effective reforms government jobs could get would be making it easier to fire ineffective employees just like a well-run company would.

Re: How Apple Sidesteps Billions in Taxes

#169

Post by notJim » Sun, Apr 29, 2012, 5:02 AM UTC

joesb wrote: post #164

notJim wrote: post #141

Earlier quoted context omitted.

Another person suggested this idea and the thread, and this was the problem I had with it: > Ultimately, all corporations are owned by tax-paying people (or nonprofits). So why not tax their distributions as income? Many companies don't pay dividends and sit on their profits for a long period of time, so in practice, that money might never be taxed.

Owner of the share/company is going to want to use that profits before they die, so the transfer of money from company to individual will happen one day.

But certainly not all of it. As another commenter upthread put it, I might have a company that makes $5 billion/year and a $100 million/year lifestyle. I will never spend all of that money.

Re: How Apple Sidesteps Billions in Taxes

#170

Post by yzhengyu » Sun, Apr 29, 2012, 5:03 AM UTC

RawData wrote: post #135

yequalsx wrote: post #87

Earlier quoted context omitted.

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…

> Most people don't have this luxury. Why not? Seriously. What's stopping anyone from doing this exact thing? Inertia...that's really all - when you get right down to it..

Well, you may call it inertia. But really, once you add up all these challenges, it tends to be quite substantial.

For example, say, you are a skilled plumber who owns a similar business repairing/installing plumbing in Shanghai, China. Theoretically, all these skills would actually make him/her eminently employable or set up a similar business, say in Sweden.

Unfortunately, that is really not the case.

Be as much as most of us would wish, capital has really achieved utter victory over labour. Till we have some major innovation which will neutralize the advantages of having mass amounts of capital, we are transitioning towards a new feudalism.

As I was mentioning to a colleague, the only reasons why we have a job is that software development/programming/computer systems is still sufficiently complex enough for up to 80% of the world population.

Or else we would actually be quite screwed as well. ;)