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It's time to give up on shaming big tech companies for their low tax rates

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Re: It's time to give up on shaming big tech companies for their low tax rates

#31

Post by rprasad »

jemka wrote: post #19
archgoon wrote: post #9

Earlier quoted context omitted.

What do you feel should be cut in government? Where do you feel that money is being misappropriated?

>What do you feel should be cut in government? Where do you feel that money is being misappropriated? I'm not for big government. So, I wouldn't go department by department and audit to find fraud, waste, and abuse. I used to get paid to do that for the defense department. It's a complete waste of time and ultimately a paper drill. But what I want is moot. What I don't understand is why many others sit idly by and ar…

By design, the U.S. government cannot be run like a business. The Founding Fathers consciously and deliberately chose to make the federal government as structurally inefficient as possible so that the actual exercise of federal powers (which are effectively unlimited under the Constitution except as provided for in the Bill of Rights) would be constrained.

Businesses don't have to deal with the Bill of Rights; the government does. Every exercise of government power must conform to the Bill of Rights and Constitutional prescriptions and proscriptions.

The current government could be run more like a business than it currently is, but there is no way under the Constitution that it could be run like a business.

Re: It's time to give up on shaming big tech companies for their low tax rates

#32

Post by [deleted] »

jemka wrote: post #19
archgoon wrote: post #9

Earlier quoted context omitted.

What do you feel should be cut in government? Where do you feel that money is being misappropriated?

>What do you feel should be cut in government? Where do you feel that money is being misappropriated? I'm not for big government. So, I wouldn't go department by department and audit to find fraud, waste, and abuse. I used to get paid to do that for the defense department. It's a complete waste of time and ultimately a paper drill. But what I want is moot. What I don't understand is why many others sit idly by and ar…

[deleted]

Re: It's time to give up on shaming big tech companies for their low tax rates

#33

Post by beagle3 »

Symmetry wrote: post #11
ebbv wrote: post #2

It's not shaming them for their tax rates -- we should shame Congress for not raising taxes, if we all agree taxes should be higher on large corporations. It's shaming them for legal, but unethical behavior. There's a lot of behavior that falls into the area of "legal, but shitty." Large corporations gaming the system to avoid paying taxes falls into that. Don't kid yourself that we can ever totally eliminate this ki…

I'm not sure you're right to single out corporations here. It seems like all the Real People I know who are aware of simple things they could do to pay less in taxes end up doing them as well.

and, in addition to what jbooth wrote above - these corporations lobby for the laws to be changed in their favor. How many Real People do you know who have done that?

And is setting up 4 related corporations in 3 different international jurisdiction a "simple" thing?

Re: It's time to give up on shaming big tech companies for their low tax rates

#34

Post by clarky07 »

mattmanser wrote: post #17
swombat wrote: post #8

Earlier quoted context omitted.

Is exploiting tax loopholes really unethical? Some would argue that the government is the biggest waste of money there is. I'm not saying that's my belief, but let's entertain that thought for a minute. If you believe that the government wastes most, say 95%, of its money on stupid things that should never receive a dollar from anyone (like the war in Iraq, to pick a random one), and you believe that you personally c…

Unfortunately you've missed the point of why it is unethical, everyone else has to pay more to support your avoidance instead. If they paid their way then the overall tax rate would be lower for everyone, instead of just for the rich. The irony being they're the ones who need it the least. So effectively Bill Gates made the decision to make everyone else pay more tax so that he could go and cure Malaria in Africa. Ca…

The rich not only pay far more in taxes by virtue of making more, they also pay more in relation to how much they make. The top 1% earns 17% of the income, and pays 37% of the taxes.[1] It's complete BS to say that Bill Gates following the tax code is unethical.

[1]http://www.heritage.org/federalbudget/top10-percent-income-e...

Re: It's time to give up on shaming big tech companies for their low tax rates

#35

Post by gte910h »

ebbv wrote: post #2

It's not shaming them for their tax rates -- we should shame Congress for not raising taxes, if we all agree taxes should be higher on large corporations. It's shaming them for legal, but unethical behavior. There's a lot of behavior that falls into the area of "legal, but shitty." Large corporations gaming the system to avoid paying taxes falls into that. Don't kid yourself that we can ever totally eliminate this ki…

That's full of crap. What they'll respond to is changing the law!

They're just following the law. Beg off the companies, and change it.

Re: It's time to give up on shaming big tech companies for their low tax rates

#36

Post by beagle3 »

mikeryan wrote: post #6

Honestly I'd love to hate Big Corp for doing this. But this really is one of those "Don't Hate The Player - Hate the Game" kind of scenarios. I may run a tiny LLC but I damn well try to get my tax burden down as low as possible too. I can't really fault the Apple's and Chevron's of the World for doing the same. If we want substantive change in the tax system we should be shaming those in our Government who bend backw…

> But this really is one of those "Don't Hate The Player - Hate the Game" kind of scenarios.

You've got it wrong. There is no "game", there are only players. For YOU there are game rules. However, when you are as big as Microsoft or Google or Apple or Boeing, you spend millions (or tens of millions) to change the game rules in your favor.

If you're Chris Dodd, a former senator who was chairing the financial oversight committee at the time everything crashed and burned (how's that for track record?), you later head the MPAA and you can threaten - on live TV - to stop bribing politicians. Where's the referee who is supposed to enforce the game rules? Ergo, there are only players.

Not that hating them is going to help. But the blame rests squarely with the players, who get to redefine the game as they go.

Re: It's time to give up on shaming big tech companies for their low tax rates

#37

Post by jemka »

rprasad wrote: post #31
jemka wrote: post #19

Earlier quoted context omitted.

>What do you feel should be cut in government? Where do you feel that money is being misappropriated? I'm not for big government. So, I wouldn't go department by department and audit to find fraud, waste, and abuse. I used to get paid to do that for the defense department. It's a complete waste of time and ultimately a paper drill. But what I want is moot. What I don't understand is why many others sit idly by and ar…

By design, the U.S. government cannot be run like a business. The Founding Fathers consciously and deliberately chose to make the federal government as structurally inefficient as possible so that the actual exercise of federal powers (which are effectively unlimited under the Constitution except as provided for in the Bill of Rights) would be constrained. Businesses don't have to deal with the Bill of Rights; the go…

Thanks. I edited my post after re-reading it assuming someone would make the argument you just have. :)

Re: It's time to give up on shaming big tech companies for their low tax rates

#38

Post by JumpCrisscross »

rprasad wrote: post #20
toddasmith wrote: post #7

How is it unethical for companies to legally pay low taxes? First, realize that a company's tax isn't money growing on trees. Companies pay these taxes by decreasing profits for shareholders, decreasing wages for employees, or increasing the prices of goods and services to consumers (and usually all three). Someone is hurt by collecting these taxes. The idea that government can then go on to spend this money in a way…

Money does not grow on trees; it does however grow in cotton plantations. Corporate taxes decrease profits for shareholders, but do not decreas wages for employees. By definition, corporate taxes are taxes on profits , so employee wages have already been deducted from corporate revenues by the time the tax liability is determined. Nobody is "hurt" collecting taxes. Taxes are simply a nonspecific bill from the governm…

>Corporate taxes...do not decreas [sic] wages for employees

Given two companies, one that pays no taxes and another that pays 10% of profits in taxes, the former will have something between (a) cheaper access to capital (assuming equal expenditures), or, (b) more cash for R&D, employees, etc. (assuming equal returns). Saying that corporate tax rates have no effect on how much money a company has available to spend is absurd.

>Under the time-value of money theory, if a tax can be deferred for 7-8 years, it is as if the tax was never owed

Assuming AAPL is a AA credit (pessimistic) it would pay an 80 basis point spread for a 10-year borrowing [1]; with the 10-year Treasury at 190 [2] Apple's discount rate by these assumptions for 10 years is 2.7%. The present value of a $6B tax liability 10 years from now would thus be $4.6B, not zero.

[1] http://www.bondsonline.com/Todays_Market/Corporate_Bond_Spre...

[2] http://www.bondsonline.com/Todays_Market/Composite_Bond_Yiel...

Re: It's time to give up on shaming big tech companies for their low tax rates

#39

Post by rprasad »

cletus wrote: post #30

I disagree with the premise that legally avoiding tax is somehow unethical or wrong (or otherwise something to be shameful for). There's a strong counterargument that not voluntarily handing over money you don't need to is resisting the tyranny of government. The real problem here is twofold: 1. The tax system is too complicated and continues to get more complicated with special interest riders and so forth; and 2. L…

(1) The tax system is very simple if you're not trying to game the system to (EDIT: changed from "or") minimize your tax burden. Almost all of the complexity arises from the allowance for deductions and the related regulations necessary to prevent abuse of those deductions.

(2). Worldwide, that is the standard tax practice. It is called "territorial taxation." Source-based taxation is the U.S. practice regarding foreign persons who are citizens of nations with which we have income tax treaties (for purposes of determining which country gets to tax them). The U.S. is an outlier in taxing worldwide income regardless of source. However, getting rid of the Irish structure would require (a) a change in other countries' tax policies or (b) a tax code even more complicated than the one we have right now.

Note that I mean "game the system" in the sense of gamifying the outcome. I do not mean game in the sense of "cheating."

Re: It's time to give up on shaming big tech companies for their low tax rates

#40

Post by jbooth »

clarky07 wrote: post #23
jbooth wrote: post #14

Earlier quoted context omitted.

It's unethical because we're all on the hook for the money the government spends. That's the social contract. If you think the war in Iraq was a big waste of money (as I do), then great, lobby against that. But once the decision's made, we're all on the hook for the money and wiggling out is akin to welching on a bet or defaulting on a loan when you have the money to pay. Funnily enough, most of the people who compla…

There is nothing unethical about following laws as they are written. The thing to lobby against is the absurd tax code we have in the US. If the tax code wasn't 16k pages we wouldn't have this "problem." You could put all the information needed on 1 page, and we wouldn't have to read these stories in the news anymore.

Nothing unethical about following laws as they are written? That's a silly absolute. What about the nuremberg trials?

There's all sorts of unethical things you can do legally, and if you have a bunch of lobbyists working to change the law in your favor, there's even more.

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