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Paradise Papers: Dear Tim Cook

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Re: Paradise Papers: Dear Tim Cook

#131

Post by Swinx43 »

patrickaljord wrote: post #96
styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

Apple do pay their taxes just like you for everything they sell in the US. It's what they sell outside of the US that they don't pay, but they do pay in those other countries. The biggest unfair advantage they have against you is if you sell to overseas markets (you're paying US tax, not them) but if your market is US only then Apple isn't paying less than you are.

While I appreciate the sentiment it is time to start taking a more global look at these antics of companies.

I run my own company in the UK and I know for a fact that apple makes a massive amount of money selling in this country.

Now as a small business owner I am taxed at 20% on corporate profit. (19% going forward now due to a tax cut in corporate rates introduced during the last financial year). You then also get taxed on any dividends you pay out to yourself as the owner of that company according to normal income tax rates, (Sure you get a £5000 dividend tax free allowance but after that you are on normal income tax bracket rates).

There is simply NO way for me to change this. I pay my taxes each year diligently, otherwise I end up in jail.

However massive companies that make billion in revenue from countries get to play the tax game and effective pay percentage wise a LOT less than small businesses in the UK while benefiting from the infrastructure provided and paid for by public funds that they contribute very little to. That infrastructure includes the Healthcare and Education system. Both which are under constant stress due to under funding.

I am not for high taxation but I surely am for everyone paying their fare share. The employees working for these companies pay many times more tax on their salaries compared to what the corporation pays on its profits. At some point this vampire squid behaviour of extracting out of a country without helping fund the infrastructure that helped make it be a successful market cannot continue. This behaviour also gives me VERY little hope that AI and Automation will ever lead to the benefit of but a select few. /

Re: Paradise Papers: Dear Tim Cook

#132

Post by alkonaut »

wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

> Paying taxes is an obligation with which we comply, both to the letter and in spirit.

That is the problem though isn't it? Following the tax code to the letter and not the spirit. E.g. paying internal royalties to companies via Ireland and Cayman is not following the tax laws other than to the letter.

If laws can't be changed to actually extract taxes by the spirit of the law "Sorry facebook we don't like how you transferred royalties to the cayman islands via that double Irish setup, so that'll be $5B for your business in our country please", then we completely failed to make laws.

Re: Paradise Papers: Dear Tim Cook

#133

Post by fastball »

nickpp wrote: post #85

On thing I wonder about all these proponents for Apple to voluntarily pay more taxes: do they themselves pay more taxes than strictly required of them? I mean do they not take advantage of that child exemption? Do they not deduce that mortgage? Those medical costs? That college tuition? Those business expenses? Do they decide to voluntarily add at least 1% to their income tax bracket? Do they practice what they preac…

Honestly this point is so obvious but I hadn't thought of it myself.

Re: Paradise Papers: Dear Tim Cook

#134

Post by nickpp »

speedplane wrote: post #12
jarym wrote: post #5

"Such “tax optimization” – albeit legal – is only possible because specialized law firms such as Appleby devise complex company structures inaccessible to most other firms" Maybe governments should simplify their own tax rules. Then you wouldn't need specialised law firms and simpler tax systems are harder to bypass. To add, there is nothing 'moral' about tax - you have no choice but to pay what you're legally obliga…

In these situations they always say, "everything we did was legal". But the problem is that powerful individuals and companies get to make the rules. They have lobbying power and a legal budget that allows them to influence the rules themselves. They get to decide what is legal, and use the legality as a shield.

The government makes the rules. The problem is that the government is made of politicians and they are by definition open to corruption (lobbying, contributions, etc). Those campaigns cost and administration salaries are not that big.

The solution? Reduce the government's power and you take away the incentive of the whole sick system.

Re: Paradise Papers: Dear Tim Cook

#135

Post by onan_barbarian »

earthtolazlo wrote: post #111
erickj wrote: post #95

Earlier quoted context omitted.

Moving abroad, I now fully understand the feeling behind "Taxation without representation is tyranny".

You are welcome to give up your American citizenship if that income tax becomes too burdensome for you.

Amazing levels of ignorance here. Even this has become difficult and awkward thanks to an effort to close the door after Eduardo Saverin et al bolted. Hacker News seems to be a reliable place for people to holding forth on situations that they don't understand; it's no wonder that the brains trust here gets regularly crucified on n-gate.

Re: Paradise Papers: Dear Tim Cook

#136

Post by andrepd »

wjnc wrote: post #8

Dear Herr Krach, thank you for your letter. I think you misunderstand how business works. Apple is a profit seeking corporation. Profits we make, we hope to distribute to our shareholders. Paying taxes is an obligation with which we comply, both to the letter and in spirit. We meet such obligations, but not nilly-willy. Our shareholders would not look kindly upon executives who pay more taxes than necessary. Avoidanc…

You can find a loophole that lets you get away with murder, but that doesn't make it any less imoral, or you any less of a murderer.

Re: Paradise Papers: Dear Tim Cook

#137

Post by styx31 »

akanet wrote: post #122
styx31 wrote: post #80

What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate. But there are these big companies which can afford to create offshore companies/holding just to evade some tax system, and lower their tax rate. So, what? The tax rate of a country is now "artificial", because it will never be applied to all revenues from all companies, because th…

Well, it's more about familiarity with the system than work required to game them. I've met one-man operations paying effectively the same rate as Apple, they just know the legalese well enough to do it on their own.

All companies are supposed to be equals regarding taxes. If a part of them can trick this rule, then it is not fair and must be fixed.

I agree that there is a part of entrepreneurship which include being able to understand the rules and laws and use them efficiently, but all these familiarities used to game the system are only valid if only a minority of the people use them. One people finding this trick is ok, but big companies being able to buy these tricks is another scale.

Re: Paradise Papers: Dear Tim Cook

#138

Post by _acme »

earthtolazlo wrote: post #111
erickj wrote: post #95

Earlier quoted context omitted.

Moving abroad, I now fully understand the feeling behind "Taxation without representation is tyranny".

You are welcome to give up your American citizenship if that income tax becomes too burdensome for you.

Only if you have another citizenship to turn to. Being stateless isn't an option.

Re: Paradise Papers: Dear Tim Cook

#139

Post by lordfoom »

fastball wrote: post #127
mindw0rk wrote: post #4

The point about Apple hiring best graduates who got their education mostly free of charge cause of all the tax payers really shift my mind about the whole tax-avoidance thing.

Yes but the moral burden is not on Apple, it's on those graduates. If you got your education for free and now you make a fat salary from Apple, it's your job to give back. Not Apple's.

Bullshit.

Re: Paradise Papers: Dear Tim Cook

#140

Post by CamTin »

earthtolazlo wrote: post #111
erickj wrote: post #95

Earlier quoted context omitted.

Moving abroad, I now fully understand the feeling behind "Taxation without representation is tyranny".

You are welcome to give up your American citizenship if that income tax becomes too burdensome for you.

There are actually things like the expatriation tax and "name and shame" provisions which discourage people from renouncing for tax purposes.

Also (note that I am not an accountant or lawyer and this is not advice), most ordinary people won't see any problem with taxation while abroad beyond the actual inconvenience of filing a 1040 because the foreign earned income exclusion (https://www.irs.gov/individuals/international-taxpayers/fore...) allows you to exclude foreign earned income up to $100,000 from US taxation. Since ordinary people pretty much all earn less than this, they only have to pay taxes to whatever country they are actually in. Only people who are rich enough to hire accountants have to worry about double taxation, and they can probably avoid it by other means that are well-studied among rich peoples' accountants.

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